At one time, the only gift card option was the traditional plastic version. Over the years, however, another variant has gained popularity: the egift card. Electronic gift cards are an ideal option for a number of reasons. For one, they provide a fast, easy and affordable solution for any incentives program. Plus, they are also customizable, and many consumers are turning to egift cards for their typical gift-giving holidays.
“Egift cards continue to gain popularity among consumers.”
The prominence of this type of card was highlighted in the recent Bankrate.com survey on gift card use. The annual report, released in late 2014, showed that a majority of gift cards are offered in a digital form.
Consumers embrace the idea of the egift card One of the biggest impediments toward egift card use was the consumer. Many people weren’t comfortable with the idea of a digital card, as some raised questions about security and the surrounding technology. However, “digital” is the hot trend, and many different consumer goods are being integrated into smartphones, tablets and computers. As a result, the safety and security of an egift card is no longer a question. This is reflected in the rising number of egift cards in the market. According to Bankrate.com, 59 percent of the 62 different gift cards have a digital variant. In 2013, that figure was only 54 percent. Overall, the prominence of egift cards has risen each year since 2011. Millennials are also a key reason for the growth of the digital gift card segment. Bankrate.com found that 14 percent of the millennials polled have either used or given a mobile gift card. For those between the ages of 30 and 49, that figure drops to 7 percent. It seems that younger audiences are familiar and comfortable with the idea of the egift card. Millennials are a key reason for the growth of the egift card.
Gift cards sales remain strong The rising consumer confidence in egift cards is also shown through a growth in overall gift card sales. Research done by advisory firm CEB found that total gift card sales were over $124 billion in 2014. That is up 5 percent compared to the previous year. For the egift card segment, sales were at $5 billion in 2013 and $6 billion in 2014. However, CEB predicts that this particular market will grow to roughly $17 billion in sales by 2017, as egifting becomes less of a niche market. Even so, CEB research showed that gift card sales were slowing down, even with innovative products like egift cards. “The gift card market has moved beyond novelty and is now firmly in the mainstream,” explained CEB TowerGroup senior research director Brian Riley. “With maturity comes slowing growth, but innovations in the e-gifting space will ultimately breathe new life into the industry. As the battle for consumers’ mobile wallets heats up, expect to see a new set of winners and losers emerge.” What does this mean for you? Expect an influx of egift cards in the near future. This type of digital reward and incentive is beneficial for a variety of reasons, including affordability, flexibility and security. It has made it easier than ever to share gift cards online.