Designed to keep our clients informed of the evolving B2B gift card landscape The fourth quarter of last year included an exciting and prosperous holiday season that exceeded many of our expectations. Also surpassing our expectations was the response from our very own, GiftCard Partners 2011 Gift Card Usage Survey, which includes real life cases from companies using gift cards as employee incentives and an outlook for 2012 B2B gift card sales.
The 2011 holiday season brought GiftCard Partners its usual rush of corporate holiday buyers, which closely mirrors consumer gift card statistics. For the past several years, gift card growth has exceeded the overall growth of retail spending, which speaks to the white-hot popularity of gift cards in general. GiftCard Partners is happy to announce that our client gift card portfolio sales grew an average of 55% in 2011 over 2010! As a reference, total retail sales grew 7.4% in 2011.i
According to FirstData's 2011, Prepaid Midyear Gift Card Performance Update, during the first half of 2011, spending on gift cards outpaced consumer spending by a full percent. Overall consumer credit, debit and EBT purchases grew almost 8% on a year-over-year basis, while gift card activation increased by almost 9%.
Specialty retailers, such as book stores, hobby shops, sporting goods stores, clothing stores, electronics and appliance shops are the main reason for the growth of gift card sales. During the first half of 2011, gift card purchases from specialty retail stores grew by
23.5%. Holiday gift card shopping was strong, with 18
% of holiday gift purchases being gift cards: this is 3.4% higher than 2010
ii
How did technology play out in the holiday shopping arena?
18.3% of all Christmas Day shopping came from mobile devices; this is 8.4% higher than 2010
iii
Following are a few highlights from our initial results (results set 1); Download GCP's Gift Card Usage Survey Results White Paper here. There are more reports to come, which will combine our results from set 1 and later results from set 2, which will dive deeper into how various industries are utilizing gift cards.
88% of total respondentsreplied that they wish to receive their gift cards in traditional plastic format. 10.3% wish to receive their gift cards by eCert or email, and only 2% wish to receive their gift cards as mCerts or mobile gift cards. Certainly good news for those who are only offering plastic gift cards in the B2B market.
Retailers are concerned about financial and logistical implications, considering there would likely be additional POS and middleware technology required to collect zip codes, and that isn’t yet taking into consideration online sales, gift cards sold through 3rd party online sites, 3rd party gift card malls in addition to in-store gift card sales. Retailers continue to look for solutions and leadership from 3rd party providers, while we await guidelines that are to be issued from the state of New Jersey sometime in February.
f you have any questions or would like guidance navigating any facet of the industry, we’re here to help, contact Ed Shulkin at:
Eshulkin@giftcardpartners.com.
i. The Los Angeles Times: Gift Cards will extend Retailers’ holiday cheer
ii. According to Cengage,
referencing an IBM Coremetrics Benchmark study
iii. Kiplinger January 12, 2012 Retail Report
iv. Retail Gift Card Association:
Gift Card Issuers: Are You Prepared to Register & Escheat Gift Cards to New Jersey?