InComm identifies areas of growth for gift cards in 2020

According to the press release, this insight shows how retailers can engage consumers who may be hesitant to return to brick-and-mortar stores during the COVID-19 pandemic. The findings were published in the company's 2020 Consumer Pulse: Gift Cards report, which compiled survey responses from over 16,000 US-based gift card shoppers.

Therefore, the company monitored a steady growth in online gift card purchases over the last few year. The rapid increase of online purchases during the first half of 2020 has been remarkable, as consumers are increasingly purchasing gift cards for digital content such as gaming and streaming services. In addition to purchasing gift cards online, consumers have flocked to ecommerce to redeem their gift cards. Online shopping ranked as the most common spending category across both open loop and closed loop gift card users so far in 2020, while gift card spending also increased in the electronics and grocery categories. 

Moreover, growth in spending on electronics was fueled in part by those working from home and seeking to enhance their at-home entertainment options. Gift card spend on gaming increased in 2019 and again in 2020, with consumers who buy gaming gift cards purchasing 70% more gift cards per quarter than in 2019. Additionally, shoppers buying cards for digital streaming services purchased nearly twice as many cards per quarter than the average. 

Consequently, retailers have a opportunity to build long-term relationships with gamers and consumers of digital streaming content, as these are the shoppers that are making planned, regular purchases of gift cards to pay for services, InComm revealed. Besides, gift card shoppers have continued to express a willingness to explore new options, as nearly 79% of respondents said they would use a closed loop gift card for a brand they have never tried before, while nearly 88% of those respondents said they were likely to visit or use that brand again after trying it for the first time. 

Overall, along with an openness to trying new brands, the study revealed that consumers are embracing new ways of sending and receiving gift cards, as digital gift cards, which the study defines as cards sent and redeemed electronically via email or text message, saw an increase in purchases of 61% through the first half of 2020.