With retailers, high street businesses and employers looking to battle back following two years of COVID-19 challenges, new research reveals that gift cards are invaluable for staff and customer retention.
The State of the Nation 2022 research, carried out by the Gift Card & Voucher Association (GCVA) and GlobalData, found gift cards to be a powerful and effective employee reward, with the volume of gift cards given as a staff ‘perk’ having almost doubled since 2019. Over a third of employees (39.5%) have received a gift card in the past three years through work rewards or incentive programmes, compared with just 21.1% in 2019,
This research, conducted across more than 2,000 UK consumers and gift card managers to track evolving attitudes towards gift cards, also revealed that gift cards are boosting the revival in fortunes for UK high streets and local businesses. The research found that 28.8% of monthly gift card purchasers now cite supporting local businesses as a motivation, (up from 24.5% in 2020).
This trend is set to continue, with over a quarter (26.4%) of respondents agreeing that they will continue to purchase gift cards to support companies they like, and 34% reporting that more of their local businesses have started to sell gift cards.
Physical gift cards have also bounced back since lockdown as stores re-opened, with a monthly average of 47.4% of gift card buyers purchasing physical gift cards in-store vs. 43.4% in 2020. However, the continued rise of digital gifting methods during the pandemic has led a significant number of shoppers to now expecting all gift cards to be available in both digital and physical formats, increasing from 26.2% in 2020 to 40.8% in 2022.
Looking to the future, gift cards continue to grow in importance for younger consumers. More than two-fifths (41.9%) of Generation Z shoppers have purchased gift cards within the last three years – a figure which rises to 45.8% of millennial shoppers. The strong popularity of gift cards among younger consumers reflects the increasing popularity for leisure, experience and gaming gift cards over the last decade.
Gift cards are also an important way for businesses to attract new customers, with more than half of users introduced to a new brand or organisation via a gift card. This rises to 67.3% of younger shoppers, with a third (34.9% of Gen Z overall) going on to become a regular customers of the brand.
Gail Cohen, director general of the GCVA, comments: “Between their convenience, ease of use and versatility, gift cards are tremendously popular with businesses and the public alike. This research proves what we in the industry have known for a long time – whether you’re an employer or customer-facing brand – if you are looking to retain your staff or your customers you simply cannot afford to ignore the importance and growing relevance of gift cards.
“Gift cards are a personalised gift that allows the recipient to choose a reward they will truly treasure, as opposed to cash which often vanishes into household expenses. Also, as we increasingly become a cashless society (a trend accelerated by COVID), it is clear that gift cards have often been the answer when challenges arise on how to transfer money securely and with flexibility.”