New research has reinforced the relevance of gift cards in the modern retail environment as both a tool for gifting and financial planning, amidst the ongoing cost-of-living crisis.
The State of the Nation 2023 research, carried out by the Gift Card & Voucher Association (GCVA) and GlobalData, found that gift cards have remained resilient through ‘a year of two halves’ in 2022; the first half generally picking up as the UK continued to pull away from the effects of the pandemic, followed by a downturn as the cost-of-living crisis started to bite.
The research shows that retail gift cards proved a popular choice, with the average proportion of monthly gift card buyers increasing to 52.3 per cent in 2022 vs. 49.1 per cent in 2021. The rising penetration of retail gift cards reflects the increased appetite from shoppers to undertake the same types of social, in-store shopping trips as they did pre-pandemic. This was especially the case over the Christmas period, which saw 53 per cent of UK gift card buyers purchase physical gift cards in-store in December 2022, compared to 49 per cent in December 2021.
Data also highlighted the popularity of digital and multi-channel gift cards across generations, proving that cross-channel fluidity is no longer an expectation exclusive to younger generations. The monthly average of gift buyers who expect all gift cards to be cross-channel was fairly consistent across all age groups and increased to 52.9 per cent in 2022, up from 40.8 per cent in 2021.
Gift cards remain an effective tool for reaching new customers, with 50.4 per cent of Gen Z and 53.3 per cent of millennials saying that they were introduced to a brand through receiving a gift card. In addition, retailers continue to benefit from additional spend, with two-thirds of shoppers typically spending more than the value of the gift they received in 2022. This is particularly true for younger shoppers, some of which are willing to spend triple the amount of the gift card being redeemed.