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Gift Card Buyers Seek a Personal Touch October 23, 2008

Posted by jyu in Uncategorized.
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Gift cards continue to gain favor as a practical gift-giving alternative. But to attract buyers, more retailers need to provide the option to personalize gift cards, according to a study to be released next week by the National Research Network.

The perception that gift cards are impersonal is the top inhibitor for consumers purchasing gift cards, the study found, with nearly half of respondents citing that as a factor. The August study polled 3,0007 consumers and was conducted online in conjunction with market research company Hartman Group.

“In order to increase sales while also helping gift cards stand out in the dense marketplace, marketers should focus on personalizing the gift cards,” said Keith Maladra, vp-consumer intelligence at the National Research Network, Chicago. 

Maladra said personalization would require a better understanding of the target markets and what appeals to them. He added, “For instance, gift card providers could customize gift cards for children by placing an image of a ‘cool kid’ on the card.”

Starbucks, Wal-Mart and Visa are among the larger companies that offer personalized gift cards. It’s done primarily via the Web, allowing consumers to put messages and pictures on the cards.

In 2006, consumers spent nearly 18% of their 2006 total holiday merchandise gift expenditures on gift cards, up from 13% in 2005, per the International Council of Shopping Centers.

The National Research Network study also found that half of gift card recipients typically spend more than the gift card amount when redeeming it. Additionally, 15% of gift card recipients spend less than the total gift card amount, giving the card issuer a benefit.

While an ailing economy may affect the monetary amount given in gift cards this holiday season, the study noted, over half of consumers said they plan to purchase at least one card. In the past year, respondents claimed to have spent $262 on gift cards, at an average of $52 per card.

“What we see now is that gift cards are still one of the perfect gift-giving solutions, but a third of respondents said they would not spend as much,” said Blaine Becker, director of marketing and communications at Hartman Group, Bellevue, Wash.

Becker said marketers could consider adding value to their cards this season, following in the footsteps of retailers that offered an additional 10% to 20% this summer when consumers were spending their tax stimulus checks.

Among other findings in the study:
– More females (60%) than males (44%) reported buying cards in the last year;
– The average number of gift cards consumers receive tends to correlate with household income. As household income increases, consumers tend to purchase more gift cards;
– Christmas and birthdays were cited as the top occasions for gift card giving;
– This holiday season, younger consumers are expected to buy gift cards, with 78% being between the ages of 18-24;
– Discount stores such as Wal-Mart and Target were the most popular gift card benefactors, with 42% of respondents reporting purchasing a discount store card in the past year. Restaurants came in second (26%), followed by clothing stores (21%).

“The gift card is a no brainer for almost any company,” said Jim Novo, a marketing consultant based in St. Petersburg, Fla. “They take very little space, so the revenue in terms of square footage is tremendous. And they are low maintenance. It’s a terrific way to extend the brand.”

Sept 4, 2008

-By Steve Miller

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Gift Card Buying Trends Increasing in Hispanic Market October 23, 2008

Posted by jyu in Uncategorized.
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Gift card buying trends continue to increase each year. The gift card industry has been taking off for several years and each year shows a steady increase in number of cards purchased and the average amount spent per gift card. Also, surveys show that more people are eager to receive a gift card, which was once seen as an impersonal gift, than ever before. Over 50% surveyed said they wanted gift cards this season according to the National Retail Federation.

The gift card buying trends are also increasing rapidly in the Hispanic market. According to Comdata Stored Value Solutions, Hispanics, on average, received gift cards with the highest average value, $71. Comparatively to African-Americans and Caucasians, this is considerably higher with African-Americans averaging $60 and Caucasians receiving an average of $41.

“Our survey shows us that Hispanics are enthusiastic consumers of gift cards,” said Bob Skiba executive vice president and general managers of CSVS. “Hispanics represent an exciting growth area for retailers.”

The study also shows that 40% of Hispanics report buying gift cards for personal use, compared to 30% of Caucasians and 24% of African Americans. Another interesting note is that 69% of Hispanics surveyed reported spending more than the amount on the gift card. Hispanics also give gift cards to children more than Caucasians and African Americans for the purposes of rewarding their children as well as teaching them the value of money. Instead of giving children their weekly allowance, parents can use gift cards to reward their kids on monthly basis and feel a sense of responsibility by have a prepaid credit card, which looks the exact same as mom and dads’ bank card.

The numbers are certainly showing a very excited market for gift cards and specifically a rapid increase in buying from the Hispanic market. With gift card purchasing still climbing, these numbers will certainly continue increase.