Overview

• The gift card industry includes "gift certificates, gift vouchers, gift tokens, and others, which are generally issued by a retailer or bank as a developmental strategy used for promoting businesses, attract new customers, increase brand awareness, reduce fraud and improve sales. "
• The global gift card industry was valued at $619.25 billion in 2019, and is expected to reach $1.92 trillion by 2027.
• Other estimates provide the market size to be $1 trillion in 2020, and is projected to reach $2.7 trillion by 2027, growing at a CAGR of 14.5% between 2020 and 2027.
• The U. S. accounts for over 26.9% of the global market at $278.8 billion.

Trends Shaping the Gift Card Industry

Rise in Digital Gift Cards/E-Gifting

• Progressively, consumers have been steadily shifting from "paper gift vouchers to digital ones."
• In 2017, about 65% of consumers bought digital gift cards without any advertising, compared to 33% of consumers in 2016..
• This year, in the U.K., "digital and eVoucher sales grew by 49.7% on a rolling year basis, while sales of physical gift cards continued to retreat. Indeed, the market share for digital products increased to 30.2% in the first half of 2020, up from 17.1% in the same period last year. "
• This trend was enhanced by the lock-down occasioned by the COVID-19 pandemic.
• The e-gifting segment currently accounts for 11% of the global gift card market and is expected to grow at a CAGR of 15.5% in the next 7 years.

Rise in Gifting Culture

• Gift cards are emerging as a popular gifting option for festive occasions and birthdays.
• Gift cards make for perfect gifts during occasions as "apart from buying personalized gifts, they can also be used in restaurants, grocery stores, supermarkets, department stores, specialty stores, and cafes."
• The rising number of family/work occasions, and the holiday seasons are becoming the biggest contributors to the sales of gift cards.
• For example in the U.S., "Thanksgiving, Christmas, and New Year holiday are the most popular festive seasons where gift cards are used for giving and receiving gifts."
• Globally, there are recorded sales surges for gift cards during festivals and other special days, such as Father’s Day and Mother’s Day.

Growth in the Open Loop Cards Segment

• The open loop gift cards are growing in popularity. For example, the Canadian open-loop prepaid market grew by 27% between 2015 and 2018.
• Globally, the open loop card segment is expected to exhibit the highest CAGR of 17.1% between 2020 and 2027.

Rise in Corporate Gifting

• Companies are increasingly using gift cards to recognize the contributions and achievements of employees, as they are considered convenient and safe, and novel.
• For example in the U.K., in the first half of 2020, "while business-to-consumer (B2C) sales fell significantly when compared to the same period in 2019 (-32.2%), business-to-business (B2B) sales – like those used by employers to reward staff – actually grew by 8.2%."

Increase in Product Categories for Gift Cards

• In order to stay ahead of the competition, companies are actively collaborating with technology solutions providers to launch gift cards.
• For example entertainment companies are launching e-gift cards for "content across major online and retail marketplaces;" and "electronic device manufactures are also launching gift card programs on their websites to increase the sales of products such as smartphones, smart devices, televisions, and accessories."

Proprietary Research Available

• Global Gift Card Market 2020-2024 (Technavio, $2,500)
• Research Topic: Market Segmentation by Type ($1,496.45)
• Research Topic: Drivers, Challenges and Trends ($2.012.50)

Summary of Findings

• During this preliminary hour of research, we were able to provide several trends that are shaping the gift card industry.
• We have assumed a global focus. If a more targeted approach is desired, for example, the U.S., this would have to be clearly communicated to us in any reply.