Why Millennial Expectations Will Drive Q4 Gift Card Sales—and How to Meet Them
December 4, 2018
The National Retail Federation (NRF) predicts holiday retail sales should total between $717.45 billion to $720.89 billion this year, an increase of more than 4% over 2017 sales. Last year, the NRF reported that gift cards again claimed the title for the most popular item on wish lists—a title owned for the past 11 years. If it’s any indication of what to expect this year, potential gift card sales look strong.
CashStar recently released its own report based on findings from the 2018 Blackhawk Network Consumer Research survey. The report highlighted the power of gift cards for merchants, particularly in the areas of customer acquisition, incremental visits, up spend, engagement and loyalty, and future spending. It highlighted the preferences and expectations of various generations when purchasing, receiving, and using gift cards. Millennials, in particular, stood out in terms of preferences and shopping sophistication. Another remarkable data point of the millennial group is their spending power; the segment has $200 billion to spend in 2017 and are expected to usurp the spending power of every other generation by year’s end.
These are useful data points for merchants looking to adapt gift card programs to meet millennial expectations and boost Q4 gift card sales. This key target demographic is the belle of the retailer ball. We’ve put together some guidance to ensure merchants stay on millennials’ “nice list” during the Q4 holiday shopping season.
Millennials Enjoy Purchasing Gift Cards…With Options
Personalization matters, especially to a millennial audience. Eighty-nine percent of millennials have purchased a gift card, yet this generation is more likely than other age groups to lose or forget about a gift card. For this reason, it’s imperative that merchants find a way to capture and hold their interest throughout the purchasing (and receiving) process.
Personalization is one way to do this, as it impacts initial purchase decision and load amount. Experience matters to millennials, who look to gift card purchases to be a feel-good opportunity. The CashStar report shows that personalization—through appropriately occasioned card design, personal messaging options or other choices—can positively impact millennial purchase decisions.
According to the CashStar report, of the 50% of overall respondents who agreed that holiday-specific gift cards and personalized messaging (either on the card or in an accompanying greeting card) would get them to purchase more gift cards, millennials accounted for 60% of those who would like a personalization option on the card itself. This group made up 59% of respondents who prefer personalization options within the accompanying greeting card. Of the 51% who reported wanting specific holiday personalization options, millennials made up more than half (59%) of that group.
Action Item: Offer multiple personalization options, including:
- Option to personalize the card itself (with messaging, video, photo, etc.)
- Option to personalize the greeting card accompanying the gift card
- Option to personalize either the gift card or the accompanying greeting card with holiday-specific themes
Millennial Gift Card Recipients Spend More If…
The CashStar report also highlighted the spending habits of millennial gift card recipients under different scenarios. In short, millennials report spending more than the amount on gift cards they received that included personalization—and they reported this more often than any other age group. The following options especially entice millennial recipients:
- Gift cards personalized with the giver’s own message: Millennials made up half of the 35% of respondents who reported this option would encourage them to spend more than the value of the gift card.
- Gift cards personalized for a specific holiday: Millennials accounted for 48% of the 35% of respondents who reported this option would encourage them to spend more than the value of the gift card.
- Personal message in a greeting card: Millennials represented 47% of the 35% of respondents who reported this option would encourage them to spend more than the value of the gift card, millennials accounted for 47%.
Another important highlight is this group’s interest in receiving personalized egift products. Sixty-four percent of millennials (the most of any age group) showed interest in receiving a personalized egift product.
- Combine the best of all personalization options via eGifting to enable a heartfelt gift-giving and receiving experience.
- Merge the perception of value with the ability to tailor the gift to one’s own personal preferences as the recipient is able to select specific attributes (size, style, color, etc.) to meet their preferences.
Millennials Get Digital
Millennials enjoy receiving and giving digital gift cards and their purchase decisions can be strongly influenced through digital gift cards. What’s more, they are very open to receiving gift cards through a variety of digital channels, including email, texting and social media. When it comes to mobile payment options, millennials are very comfortable adding digital gift cards to mobile apps or mobile wallets. For merchants, this signals a need to offer omni-channel, omni-platform gifting options to cater to millennials’ desire for convenience.
In the CashStar report, millennials accounted for 69% of respondents that showed interest in either receiving or giving digital gift cards. More specifically, they show a strong preference for receiving digital gift cards via email and made up the majority (80%) of respondents who said they were interested or very interested in receiving a digital gift card via email. Texting is another popular way millennials enjoy receiving gift cards, as the group made up 68% of those who said they were interested or very interested in receiving a digital gift card via text message. Social media gift card options also intrigue millennials, with 60% reporting they have interest in a gift card sent through a social media platform.
Millennials also display a high comfort level with digital gift cards that can be added to mobile apps or mobile wallets. In fact, millennial are more interested than any other age group in loading a digital gift card onto an app, with almost three out of every four millennials responding favorably to this option. Sixty-seven percent had interest in loading a digital gift card into a mobile wallet.
Action Item: Offer several digital gift card options that span online channels. Consider including:
- Digital gift cards sent through email
- Digital gift cards sent through text message
- Digital gift cards that can be added to mobile apps or mobile wallets
- Gift cards that can be sent through social media platforms
Meeting millennial demands the Q4 peak season could mean the difference between a merry holiday and a “meh” holiday. Offering personalization options, personalized egift products, and convenient digital gifting options is the key to millennial hearts—and (mobile) wallets.