The Evolution of $160B Gift Card Industry in Harmony with Contemporary Retail Trends

In the rapidly evolving world of retail, one aspect that has remained relatively stagnant is the gift card experience. Despite shopping habits undergoing a dramatic transformation over the past two decades, gift cards have failed to keep pace, according to industry experts.

The issue lies in the lack of personalization and the "wow" factor that customers crave in a modern retail experience. Many digital gift cards, for instance, are perceived as less personal than their physical counterparts due to their ease of purchase. This lack of personal connection can hinder the development of brand loyalty.

However, there's a growing recognition among retailers that gift cards can be a powerful tool for fostering customer engagement and loyalty. They can be used in various business case scenarios, such as showing appreciation to employees or vendors, driving loyalty, and demonstrating customer care.

One strategy to enhance the gift card experience involves personalizing retailer vouchers. This can be achieved through targeted product or category restrictions, automated birthday vouchers via plugins, and customer segmentation. While a specific individual or organization leading this charge was not explicitly named in the search results, strategies for improving vouchers have been discussed within popular e-commerce platforms like Shopware 5 and WooCommerce. These tools help retailers personalize coupons and increase customer loyalty.

The importance of this shift is underscored by some startling statistics. Approximately 25% to 35% of a merchant's gift card value is driven by B2B sales of gift cards. Meanwhile, some $1 billion in gift cards go unredeemed every year, representing a significant missed opportunity for retailers.

Holiday returns alone total some $90 billion in value, and the popularity of gift cards is a major boon to retailers because recipients who choose the products they want are less likely to return items. Last year, the global gift card market in the United States was estimated to be worth $160 billion.

The convenience of digitally delivered gift cards also offers advantages for retailers. They can be sent immediately, freeing retailers from the high costs of expedited shipping and gift wrapping. In 2018, around 71% of gift cards were purchased as physical cards in-store.

By boosting sales and deepening their relationship with customers through personalized gift cards, retailers can elevate the overall brand experience and increase customer satisfaction, ultimately generating loyalty. It's time for the gift card experience to catch up with the convenience and personalization that customers expect from a modern retail experience.