What are the different types of gift card customers?

by | 24 Nov, 2020 | INSIGHTS

Gift cards are very appreciated by consumers. Now, they feel free to directly ask brands whether they sell gift cards or not. Christmas, Mother’s Day, Father’s Day, … every special occasion is an opportunity for gift making, and gift cards are a particularly popular choice, but they have not seduced everyone yet.

There are different types of consumers, more or less interested by such a service, and they do not all have the same expectations. For an efficient gift card program, it is important to be aware of the multiple consumer segments.

Consumer typology

Gift card fans

Gift card “fans” are those who have widely adopted them. They like the very principle of the card. No one is surprised to see it at the top of their birthday or Christmas wishlist. And not only do they ask for gift cards, they gladly buy them for their loved ones. This type of consumer buys an average of 6 gift cards each year.

What do they love about gift cards?

They like being able to indulge by choosing their own gift, and want the same for their loved-ones. They enjoy the fact that it is fast and convenient. So, it is in the brand’s interest to develop a journey that is as simple as can be in all its steps: choice, payment and possible delivery.

They also like the card’s level of customization. The more freedom they have: design options, adding a picture, video and message, choosing the amount, … the more they will use the gift card service. In fact, between 30 and 40 percent of consumers declared they would be encouraged to spend for personalization options (State of Consumer Gift Card Preferences in 2018).

Innovations are also important. E-gift cards, the digital version of plastic gift cards, are an innovation that consumers have not failed to noticed. They have more personalization options and are more practical, in short, they have it all. As a result, more than half of gift card “fans” plan to buy one next time.

And to complete their purchases, most of these consumers like to visit third party websites like shopping portals. 74% of them have already purchased through a distributor. Therefore, brands must develop a distribution network to be able to reach these consumers through all channels.

Consumers that are “neutral” towards gift cards

There are other consumers who have no opinion whatsoever on gift cards. They are neither for nor against them. However, they buy an average of 5 gift cards each year. How come? Well, they are fine with receiving them, but mostly, they don’t mind buying them if it is their loved-one’s wish, especially their children’s. Although they remain traditional in the way they purchase gift cards (visiting stores), they are flexible if their relatives ask them to be. For example, their own children are often Millennials, and 72% of them reported using e-gift cards.

How can you reach them? They are drawn by simple and fast customer journeys, with little drawbacks. They are more likely to go for services with small and practical options, such as deferred shipping.

For brands, it is very interesting to directly reach the relatives of these “neutral” consumers, more particularly Millennials.

“Pragmatic” consumers

There are also consumers who punctually buy gift cards, but for more specific events: moves, weddings, graduations, … Which amounts to about 4 gift card purchases each year.

These consumers are busy and do not have much time to spend looking for a gift. They want something that can quickly be bought, and that will still please the recipient. Gift cards are a very convenient solution for them.

Digital gift cards have caught their attention since it is an innovation that makes the purchasing and sending process faster, and even immediate. For that reason, more than one “pragmatic” consumer out of four are willing to buy it next time, and more than half would be happy to receive one. They enjoy its practicality: being able to save the card on their smartphone, having it within easy reach at all times…

How can you attract these consumers? Brands will have to play the convenience card, with a single-page solution and a path to purchase that lasts just a few clicks. It is also a good idea to offer gift cards as an alternative when out of stock. That is to say, offer a gift card with an amount that matches the price of the product, so the recipient can buy it as soon as it is back in stock.

Reluctant consumers

Unlike gift card fans, there are people who have not embraced this service yet. These consumers find gift cards to be a very impersonal gift that do not put the buyer’s intentions in a good light. They do not want to buy or receive them, and don’t see them as an opportunity to choose their own gift.

However, they still buy one or two gift cards each year. Why is that? Simply because they see gift cards as a “last resort” solution, when they have no other alternative. They will buy gift cards only for specific occasions (graduations, …) or for acquaintances (colleagues, friends of friends, …).

Is it worth it to spend time and energy trying to reach these consumers? We would advise not to focus on them, but to still keep in touch. Showcase the different benefits of gift cards, the personalization options that enable them to create a unique gift. Who knows, their perception might change over time.

Business customers

In addition to individual customers, there are business customers that should not be forgotten. In fact, they make up 25 to 50% of a gift card program revenue depending on the brand. Who are they? Why do they buy gift cards? Well, companies, and more precisely works councils and Human Resources team, have incentive programs and special events (Christmas, …) to reward their employees. To do so, they look for practical incentives that will please the majority, all the while being customizable. That is why gift cards are very interesting digital rewards for businesses.

What are they looking for? Well, to successfully sell gift cards to professionals, you need to have a specific customer journey addressing their needs. They expect an optimal experience, but still want the reassuring required steps (purchase order, …). They also enjoy having a privileged relationship, to be assisted by the brand and communicate directly with them.

Download the gift card market report

Gift card consumer behavior

Among the different types of consumers, we can see two distinct consumer behavior emerge. But these behaviors might change at specific moments, especially around Christmas.

Early buyers

Some consumers like to plan everything ahead of time, gifts included. They like giving presents, already have a list of ideas, and snoop around in stores and online to find the best deals. They pay attention to promotions and take the time to review the different options.

To get them to consider gift cards, you can develop a promotional campaign or carry out a special operation. For example, anyone purchasing a gift card receives an additional gift card with a predefined amount. That means these early buyers have the opportunity to leave with a gift for themselves as well, which they will be able to spend however they please.

Late buyers or last-minute shoppers

Last-minute shoppers keep on increasing each year. They think they have time and are always pushing back the deadline. They get moving only a few days, or even hours, before D-day. Therefore, their options are limited, and gift cards seem like a great solution.

They can be ordered and received immediately, and sent to the recipient at the day and time of the buyer’s choosing. It is a last-minute gift, that does not look like a last-minute gift thanks to its personalization features. To draw in late buyers, you can carry out “last-minute” communication campaigns.

A few exceptions

There are consumers who like to buy gift cards for themselves in order to better manage their budget and spending. They are big gift card buyers and purchase an average of 7 gift cards each year. They enjoy the practicality when purchasing and the fact that they can reload the card rather than buy new ones.

French consumers have not yet taken up this habit, but American and German consumers regularly do it. In the United-States, 69% of consumers have already bought a gift card for themselves (Giftcards Statistics). In Germany, parents give gift cards to children as a cash alternative (FirstData study, Consumer attitudes to prepaid in Europe).

Every sub-group of consumer has different expectations and a specific perception of plastic and digital gift card programs. The brand’s challenge is to be able to find a compromise satisfying them all, and find ways to adapt its communication accordingly.

Suggestions for further reading

Top 10 reasons why a brand should offer digital gift cards

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