Starting with unpopular physical gift cards that bring little revenue to stores, the gift card market has seen success in recent years. But what is driving the growth in gift card sales and, what are the top gift card trends in 2022?
Let’s find out in today’s blog post. What is a gift card? Gift cards are payment documents with the amount of prepaid money issued by a store, retailer, or bank. Shoppers, company employees, and others can use gift cards to spend their purchases. These are used by e-commerce companies as promotional tool to help recipients find the gift they need. Many Magento 2 development companies add gift cards to their client’s stores nowadays.
There are two main types of gift cards:
Closed-Loop Gift Cards
Are cards that can only be redeemed in one store or multiple stores of the same company. It’s the best option for those businesses that want to make sure shoppers return to their stores.
Open-Loop Gift Cards
Are processed on credit card systems such as Visa or MasterCard without any direct link to the company. These gift cards are flexible and can be redeemed almost anywhere the credit card is processed. If you want these gift cards in your store then ask your Magento 2 development company for them.
During the COVID-19 pandemic, open-loop gift card sales increased by nearly 32%. Let’s find out the reasons for the increase in gift card sales with more statistics from 2022.
The global gift card market is growing every year. With sales of $ 295.2 billion in 2020, it is expected to reach $ 584 billion by the end of 2025. The popularity of gift cards is due to the huge benefits a store gets by offering them.59% of customers spend more than the value of the gift card, 51% forget to redeem their gift card, and 78% then go back to the store for further purchases. Gift cards are most commonly used as gifts for family and friends, as a reward for employees, or as part of a promotional strategy to encourage shoppers to come back for purchases, so get these in your store through a Magento Development Company.
For example, according to research by the Nielsen Norman Group, 73% buy gift certificates for close relatives, 49% for friends, and 18% for colleagues. Only 17% of Americans want to receive holiday gift certificates. However, the growing popularity of gift culture means that 76% of adults buy gift cards during the holiday season for a variety of reasons. Reasons to buy gift cards are extremely popular with millennials because they are quick and easy to buy.
Why do most shoppers choose gift cards?
The gift can be made by the recipient and can spend according to his wishes and needs;
- The ability to stick to the budget for holiday gifts
- The flexibility of use
- No stress on the return
- Easy to pack
Gift Card Trends
COVID-19 has changed the gift card market and e-commerce in general. The pandemic and subsequent lockdown have shoppers turning to online stores as a safer way to shop. And gift cards have found their stable place in the new world. Thus, open-loop gift card sales increased by 31.5% in 2020 and maintain this position to this day. So, if you’re running an online store, keep the following gift card trends in mind:
1. Increase in Demand
The pandemic has prompted shoppers without a credit cards, or those unwilling to share their credit card information, to seek alternative payment methods. The security, flexibility, and convenience of gift cards have captured people’s hearts. You can hire Magento developers if you want to upgrade your store with the facility of these gift cards. The trend continues to this day and is expected to reach $1.922 billion by 2027. Prime examples include Amazon gift cards, with 269,000 people turning to Google each month in the US to search for gift cards from Amazon.
2. The Popularity of Home Entertainment
Covid-19 has also impacted streaming platforms and online games. Although some home entertainment services, like Netflix, are now seeing a drop in revenue, the gift card market for these services is still thriving.
3. Loyalty and Incentive Programs
Over the past two years, it has become particularly popular to engage customers in loyalty and incentive programs by offering gift cards to members. Even though the value of gift cards is low, they increase shoppers’ desire to spend more money on online purchases and retain brand loyalty.
Some B2B stores claim to have seen a 48% increase in sales by offering gift cards as part of their loyalty program. Magento 2 gift card If you decide to offer gift cards in your Magento 2 stores, you should ask Magento 2 developers to add the Ahead Works Gift Card extension which is much more powerful than native Magento functionality. The extension lets you create unique gift card designs, generate codes, and manage all gift cards effortlessly.
You can set gift card values or allow customers to set the amount within predefined limits. Admin management tools let you set expiration dates, track gift card balances, send email notifications, and more. The extension allows you to easily create, generate, send, personalize, and redeem gift cards.