Gift cards revealed to be key to post-COVID retail reactivation

Business Insights
07/04/2021

  • 65% of shoppers become new customers of a brand after receiving a gift card
  • 8% of shoppers spend more than the original value of their gift card
  • Gift cards most likely to sway Millennials and Generation Z towards a new brand


As UK high streets prepare to reopen following a year of chaos, new research reveals that gift cards could be the key to reattracting anxious shoppers back to stores and boosting sales.

The State of the Nation 2021 research, which surveyed 2,000 UK shoppers to determine evolving buying habits and attitudes towards gift cards, found that almost two-thirds (65%) of shoppers have been introduced to a new brand or organisation after receiving a gift card for that business, up from 59% in 2019, indicating gift cards’ growing status as an integral customer engagement and loyalty tool.

The research, carried out by the Gift Card & Voucher Association (GCVA), found that 43% of shoppers have made a one-off purchase from a business after receiving a gift card, and a further 22% have become a regular customer. Furthermore, younger shoppers were the most likely to become a regular customer of a new brand after receiving a gift card for that business. One in three millennials (33.3%) and 27.0% of Generation Z reported this, signifying gift cards to be a particularly efficient method of new customer acquisition amongst younger shoppers.

Promisingly, the findings also indicate that gift cards drive increased in-store spend. More than two thirds (67.8%) of shoppers reported that they usually spend a higher amount than the straight value of their gift cards when redeeming them. Staggeringly, 96.2% of those respondents spend up to an extra £50 when spending their gift cards, presenting a major revenue opportunity for retailers to generate spend beyond the initial gift card sale.

Unsurprisingly, digital gifting solutions continue to rise in importance in the wake of enforced social distancing restrictions, with 31.4% of shoppers more frequently purchasing gift cards via online channels since the onset of the pandemic, and 29.5% reporting the same on mobile devices.

Echoing the ongoing shift in buying habits more widely, 38.4% of respondents say they have now converted to digital gift cards, while 47.1% of respondents now normally redeem their gift card (whether digital or physical) online - up from 43.9% in 2019.

Retailers should also be mindful of the rise of gift card self-use, with almost a third of gift card purchasers (31.8%) having purchased a gift card for their own use over the past three years due to, among other reasons, being a secure payment option for purchases such as gaming, which has soared in popularity throughout the pandemic. This rise is once again more prominent amongst younger shoppers, with 42% of millennial shoppers, and 34% of Generation Z, likely to purchase a gift card for themselves, due to reasons such as a desire to support beloved local businesses – specifically cited by 25.2% of millennial shoppers.

Gail Cohen, director general of the GCVA, commented:

“Gift cards have demonstrated that they have been, and continue to be, an invaluable customer loyalty and engagement tool that will be vital for high street businesses as they emerge from this challenging period.

“Between their convenience, ease of use and versatility, gift cards have gone from strength to strength over the past year. Shoppers love gift cards, whether buying or receiving them, and it is clear that retailers and other high street businesses cannot afford to ignore their importance and continuing relevance to consumers, which is only growing over time.

“Brands would do well to pay attention to shoppers’ evolving tastes when it comes to gift cards, such as the rise of digital solutions and self-use, and tailor their offering accordingly, such as by offering in-store promotions and incentives for gift card self-use. Those that stay mindful of these changing consumer trends and expectations will be able to take full advantage of the numerous benefits gift cards offer, placing themselves in excellent stead to thrive over the coming months.”


For more information, visit www.gcva.co.uk