Gift cards are key for driving extra UK spending - report
The UK Gift Card & Voucher Association (UKGCVA) has released new consumer research and it seems that gift cards are driving consumers to spend more when they redeem them – on average £18.55 more than the value of the card. It also said that young consumers are purchasing gift cards most frequently, many buying on average one every two months.
Consumer demand for gift cards remains high and a survey of 2,000 UK consumers shows that 84% have bought one at some point with 87% of those buying them at least once a year.
And they seem to be age-agnostic too with purchasing penetration high across all ages. Some 89% of Gen X (35-54) buy them and 86% of Gen Z/Millennials (16-34), as well as 78% of Baby Boomers (55+).
But it’s the youngest group of consumers who buy most often with 44% saying they’d bought a gift card at least once every two months, compared to 35% of Gen X and just 16% of Baby Boomers.
Consumers spend an average of £27.64 when buying gift cards but as many as 67% spend more than the card’s value when they get round to spending them.
The extra amount spent of just under £19 is a significant add-on compared to the average gift card value so the importance of gift cards for driving sales shouldn’t be underestimated by retailers.
Survey respondents also said that they’re slightly more likely to buy a gift card in a physical stores (50.1%) but that figure shows that online purchase is also rising. A growing proportion of shoppers cited online as their preferred purchasing channel, compared to when this research was last undertaken in 2017.
The rising influence of digital channels is also evidenced by the factors that influence the purchase of gift cards. Some 58.6% of respondents said that the ability to redeem online is an influential factor, with 12.5% saying the same for availability of the gift card on mobile.
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