Home Hot Topics The year that was: gift card trends in 2015

The year that was: gift card trends in 2015

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The Gift Card Network listens closely to its membership and watches the industry closely.  Here are some of the Key Trends we’ve noticed in 2015.

Digital, Digital, Digital

Most brands now have a digital gift card product and are outsourcing the delivery of their digital cards to a third party.  Why are they outsourcing their digital cards?  Primarily due to limited IT and Fraud protection capabilities.  Many brands prefer to use a third party that is established in the space and there are more and more providers offering this service.  The strategic acquisition of these digital service providers, by the Processor Community is lending credibility to digital cards and their long term profitability.

Consolidation and Acquisitions

We are seeing this happening everywhere.  Card Manufacturers are buying Card Manufacturers.  Processors are acquiring Digital Card Platforms and Apps.  Packaging and Fulfillment companies consolidating. What this means for gift card program managers is more One Stop Shops for all their card program needs, but potentially less transparency and negotiating power on pricing and ultimately less options when sourcing vendors.

Distributor Explosion! The Rise of the Aggregator!

Gift Cards is a mature market.  Consumers no longer need to be convinced of their value,  they want and use Gift Cards all the time.  And because of their popularity,  there are many new distributors entering the space, with differing sales philosophies, who are introducing new avenues for Gift Card distribution so Brands can reach more consumers.  And, because of the consolidations and acquisitions that many companies are making, integration with Brands and their multiple distribution channels is much easier for these new distribution partners than ever before.  Aggregators are also getting more aggressive with contracts and terms as competition in the space grows. Watch for more and more distribution opportunities and concepts being introduced in 2016.

Online Gift Cards – Now More Important than Ever!

The Online Channel as a sales vehicle for gift cards used to be an afterthought for many Brands.  Cards were placed on Merchant’s websites with little thought to the Consumer Experience and/or Promotions.  With the rise of Online and Mobile Sales (which is only growing each year), Merchants must rethink their web experience.  Brands that do not place a concentrated effort on featuring their Cards online will ultimately lose out on sales to other Brands that do.

Sustainable Gift Cards

Just look around.  More and more Brands are choosing a more sustainable option (than PVC) for their Gift Cards, such as Paper or Wood.  The pioneers in the space have reported no in-field, customer service issues with their cards and,  as sustainable substrate costs have come more in line with PVC, and most card manufactures are offering this option, cost and accessibility are no longer barriers for entry.  Check out the GCN’s Forest Materials report on Debunking the Myths of Using Paper or Wood in your Gift Card Program.  

Short Run, Print on Demand, Special Event Cards

Most card manufactures now offer short run or print on demand options for Brands who wish to produce small volumes of gift cards within a short window of time.  Many Brands are seeing the value of producing small batches of cards for Special Events, Time Sensitive – B2B Opportunities and even Regional Card Images to promote certain themes, events or sentiments.  And, as more and more Manufactures offer this option, pricing has become increasingly competitive.

Gift Cards ARE a Marketing Tool

You knew that, right?  Well it’s true and many Brands are starting to recognize that Gift Cards are not only a payment vehicle but also a Marketing tool and are integrating gift cards into all sorts of Marketing efforts such as new product launches, limited offerings, time sensitive sales events, and even returns.  If you haven’t already, get your Marketing Team on the Gift Card Bandwagon!

Enhanced Packaging

Many surveys have been conducted on how consumers prefer to present Gift Cards and the vast majority of gift cards are presented in a greeting card or some sort of packaging that a consumer purchases or receives from the Brand when they purchase the Gift Card.  Many Brands understand that if they don’t offer this type of packaging to their customers, the customer may go somewhere else to buy it.  Whether the Brand offers packaging for a fee or for free is a choice each company must make, but consumers have indicated that they are willing to spend between $1-5 on packaging to make their Gift Card a true Gift.  During the 2014 Holiday season, the Gift Card Network saw a rise in packaging options available to consumers.

Reduced Inventory – In some cases – Less Images is Better

Another trend the Gift Card Network witnessed, during holiday of 2014, is that the vast majority of brands had between 2-5 gift card images available for purchase in store.  Of course there were some Brands with 25-50 images, but those were far and few between.  One theory is that Merchants have learned over the years that a single, well designed, Brand specific card, with the right packaging options, is all that is needed to appeal to most consumers….plus it costs a lot less to produce and rarely is obsolete inventory now an issue.

Martha will be chairing the Gift Card Expo at the All Payments Expo taking place in New Orleans 21 – 23 March 2016.

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