Gift cards are shaping up to be a holiday hero this season, as consumers and retailers continue to grapple with supply and shipping issues. The latest data from the Adobe Digital Economy Index revealed that out-of-stock messages rose a whopping 325% in October 2021 compared to the same month in pre-pandemic times (way back in 2019), and in the last month alone consumers have been hit with more than 2 billion out-of-stock messages online.
Combine that with concerns about shipping delays for those products that are in stock and it should come as no big surprise that gift cards are looking pretty good to shoppers this year. In fact, Adobe reports that over this Thanksgiving weekend, Nov. 27-28, online spending on gifts cards was up 414% from the September 2021 average.
And that trend looks set to continue throughout the 2021 holiday season, with the latest monthly Gift Card Gauge from Fiserv finding that 29% of the respondents plan to buy more gift cards this holiday season than last, and nearly one-third (32%) of consumers saying they will purchase a gift card if they are unable to get a specific gift due to supply chain issues.
According to WalletHub, the top five most popular gift cards among American consumers (in descending order) are:
- Target; and
“We continue to see an evolution in how, where and when Americans are shopping during these unprecedented times,” said Todd Dipaola, CEO and Founder of InMarket in comments provided to Retail TouchPoints. “Supply chain logistics and the lack of workers have created unprecedented shipping delays. As a result, Americans are moving to a ‘buy now and shop later’ mindset and are turning to gift cards as they weather a season filled with delays and frustration. Retailers should prepare for an extended omnichannel holiday season and look to provide value and options to shoppers as they look for ways to solve this season’s challenges.”
In fact, Jay Foreman, CEO of toymaker Basic Fun, told the Los Angeles Times that he’s expecting a “huge” January as shoppers cash in gift cards for items they couldn’t find before Christmas.
And the trend doesn’t apply only to physical gift cards: e-gift Cards make up the fastest-growing segment of the $160 billion gift card market in the U.S. Research from Incisiv commissioned by GiftNow predicts that digital gift card adoption will grow 23% by 2025. That growth has already begun, with ecommerce gift cards accounting for 29.8% of gift cards purchased in September-October 2021, up from 19.6% during the same period in 2020, according to a new report from InMarket.
For these reasons, enhancing the digital delivery of gift cards with digital gift wrapping and personalized videos and messages will be key in helping retailers serve shoppers this year. In fact, 90% of retailers are planning to upgrade their e-gifting capabilities this Christmas season, and nearly two-thirds plan to include instant digital delivery and personalization to improve the user experience, according to a recent studioID pulse survey sponsored by GiftNow.