WASHINGTON -- As gift cards become increasingly convenient, more personalized and more sought after, retailers can expect to see an increase in gift card sales this holiday season. The fifth annual National Retail Federation (NRF) Gift Card Survey, conducted by BIGresearch, found that gift card sales will total $26.3 billion this holiday season, compared to $24.8 billion in 2006 . Additionally, the average consumer will spend more on gift cards than they did last year ($122.59 versus $116.51 in 2006).
"It is no secret why gift cards are the most popular [image-nocss] item on consumers' shopping lists," said NRF president and CEO Tracy Mullin. "Many consumers pulled back on spending for themselves this year and are hoping to receive a gift card so they can purchase something they may have had their eye on for months."
According to a recent NRF survey, gift cards will be the one of the most popular gifts this holiday season as 56.6% of consumers plan to buy one compared to other top selling gift items like clothing, toys and books. And with popularity rising among consumers of all ages, 87.7% of shoppers said they will purchase two or more gift cards this holiday season.
"As consumers become more strapped for time, they are constantly looking for ways to make holiday shopping easier and less stressful," said Phil Rist, vice president of strategy for BIGresearch. "Gift cards allow for a faster and more convenient way to buy gifts for family and friends."
Meanwhile, merchants looking to influence consumer buying behavior should consider gift card incentives, according to a study by electronic commerce and payment services provider First Data Corp., Denver. The use of gift cards as consumer incentives is a growing trend to which consumers are responding positively, it said.
Incentive gift cards have mainstream awareness, as indicated by an online research survey conducted with 526 survey respondents. Two-thirds (67%) of survey respondents state they were already extremely or very familiar with them. During past purchase decisions, more then half (57%) of those who have used an incentive gift card report the incentive not only influenced their purchase overall, but their choice of store (52%) and their choice of brand ( 41%).
Gift card incentives can take many forms. A merchant may choose to offer an incentive store gift card when a consumer makes a major purchase, when a certain brand is selected or when a spending level is reached in a single day. They can also be used to encourage a customer to try a new product or service.
Three out of four consumers (76%) are interested in purchasing or testing a product based on receiving an incentive gift card for doing so. In addition, nearly three-quarters (74%) of total respondents would be more likely to make a purchase at a store offering a gift card as an incentive promotion versus a store that did not. Nearly nine in 10 consumers (87%) who have used an incentive gift card are interested in continuing to receive gift cards as an incentive.
Consumers like gift cards because they are convenient to use and simple to redeem, said Mark Herrington, president of First Data Prepaid Services. Our research indicates that gift cards continue to be a powerful tool for merchants to attract consumers and incent them to buy. From large discount stores to fast casual restaurants, many verticals are now utilizing incentive gift cards to retain current customers as well as acquire new customers through partnerships with noncompeting brands.
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