Gift Card Market by Card Type (Open Loop and Closed Loop), and by End-User (Retail Establishments and Corporate Institutions)– Global Opportunity Analysis and Industry Forecast, 2022–2030
Industry: Retail and Consumer | Publish Date: 04-Jan-2023 | No of Pages: 118 | No. of Tables: 96 | No. of Figures: 64 | Format: PDF | Report Code : N/A
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Market Definition:
The Gift Card Market size was valued at USD 884.76 million in 2021 and is predicted to reach USD 2097.13 million by 2030, with a CAGR of 8.3% from 2022 to 2030.
A gift card is a prepaid card that can be used to make purchases and execute other types of financial transactions. It functions as a mode of payment that can be applied to purchases made at shops, gas stations, dining establishments, and other places. These gift cards are available for purchase or as rewards for doing business with a specific retailer. They can also be given as gifts to friends and family.
Some gift cards come with a maximum amount limit but are reloadable, while some others serve no further purpose once the balance is spent. Gift cards are generally of two types, such as gift cards and digital gift cards. While digital gift cards are added to mobile wallets to facilitate purchases and increase security, physical gift cards can be used in shops or online.
High adoption rate of smartphones accelerates gift cards demand
As more people have smartphones, the market for gift cards is likely to grow as customers have more flexible and convenient payment options. For instance, according to the GSMA Intelligence, in 2022, the number of smartphone users in the world today is 6.648 billion, which translates to 83.37% of the world’s population owning a smartphone.
Gift card enthusiasts and smartphone users now have a variety of ways to combine everything into one practical package thanks to the growing use of modern technology and marketing techniques. For instance, Gyft is a digital gift card platform present on iPhone and Android smartphones that enables consumers to buy, send and manage gift cards from hundreds of top retailers such as Amazon, iTunes and Target among others. Additionally, there are more mobile phone apps available that offer digital gift card options from online retailers like Flipkart, Amazon, and eBay.
Rapid expansion in e-commerce and advancement in technology
The rapid increase in the e-commerce sector has robustly driven gift card sales. E-commerce digital gift cards are popular as they offer the convenience to purchase items through websites while saving a trip to the store. Due to the growing internet and smartphone penetration rates worldwide over the past few years, a sizable number of shoppers have shifted significantly to online shopping.For instance, in 2022, there are five billion internet users worldwide, which accounts for 63 per cent of the global population.
The younger generation of consumers around the world, who prefer a mobile-first approach while shopping for exploring more products with simple purchases, dominates the online retail market. For instance, in December 2020, Qwikcilver partnered with Google Pay and listed its consumer brand Woohoo on Google Pay's Spot Platform which gives the option to choose digital gift cards from over 150 brands. It offers various brand cards including the Amazon Pay Gift Card, Flipkart Gift Card, Uber E-Gift, and Google Play Gift Code, among others.
Lack of awareness and security issues for gift cards impedes the market growth
A number of obstacles stand in the way of the gift card industry's growth, including the potential for hacking by thieves and hackers and a general lack of understanding of the advantages of gift cards.For example, Distil Networks, a cybersecurity firm specializing in bot attack detection, monitoring, and mitigation, discovered the botnet, also known as GiftGhostBot. The advanced persistent bot automatically checks millions of gift card numbers to determine which have balances.
In addition, in the rush to make smartphone gift card implementation as simple and inexpensive as possible, merchants such as Starbucks and Target have overlooked security vulnerabilities that allow any customer to use money placed on another shopper's gift card. Also, some gift cards can be challenging to use for people who are unaware of their uses and the terms and conditions that apply to them, which is another factor that is expected to restrain the growth of the gift card market.
Moreover, the outstanding amount on these gift cards that remains unearned goes to revenue liability on the balance sheet of the company until customers redeem the cards. The gift cards that are not redeemed go to unclaimed property under the country’s respective state government laws. This factor is expected to restrict the market growth of gift cards.
Technological advancements and innovations in gift cards create market opportunities
Growing technological developments in gift cards, such as adaptable sending options and marketing initiatives, help businesses boost sales by making their product offers more distinctive and alluring. For instance, Amazon has adopted new innovations in its gift card line, by introducing Amazon Surprise, which allows attaching a gift card for quick gift-giving. It also features a number of different formats that are perfect for Christmas, Hanukkah and birthdays while allowing to attach video clips or personalized voice memos for an extra special touch.
Advancements in technology create significant advantages for businesses that can use big data to form digital gift card systems. Creative use of big data can lead to substantial benefits, including better customer acquisition and retention, improved campaign focus, and targeting, as well as a better understanding of potential risks along the way. For instance, QR code gift cards are technologically savvy and origami certificates are artistic because they can be customized to be as distinctive and memorable as possible while still retaining the element of surprise.
Also, gift cards involve trading them in for something else, which may make it more likely that the recipient will use the gift card. Additionally, gift card innovation now includes a tracking website, such as Gyft to monitor sales and guarantee that cards don't disappear, which is anticipated to generate a lot of growth opportunities for the gift card market in the near future.
Europe holds the predominant share of the global gift cards market
The European region holds the lion’s share of the gift cards market currently and is expected to continue to dominate the market during the forecast period. This is attributed to the rising increasing adoption of gift cards among consumers due to the increase in application areas such as hospitality, banking, and retail stores.
In addition, the growing strategic partnerships among various merchants and payment providers to develop innovative digital gift card solutions in France are penetrating the gift card market. For instance, in April 2021, Gifted announced a strategic partnership with Nets, a leading European payment services provider to offer merchants an innovative digital solution across the Nordics and wider Europe, including France.
Moreover, an increase in technological innovations in gift cards enables high sales in companies and helps them in revenue generation. by making them unique and attractive. For instance, track gift cards allow its users to buy and give gift cards online and also offers them capabilities to see when those gift cards can be redeemed.
Furthermore, the growing influence of social media platforms along with various marketing strategies adopted by gift card providers are supporting the growth of the market in this region. For instance, in April 2020, Instagram launched a new gift card, food orders, and fundraiser tools for stories and profiles. This would help the consumers to support small businesses by discovering their gift cards, food ordering options and fundraisers in Italy on Instagram.
North American region witnesses substantial growth in the global gift cards market
North America is expected to show a steady rise in the gift cards market due to the rising innovative programs by the regional government for the launch of gift cards for supporting local businesses and vaccination drives. For instance, in November 2021, Onondaga County rolled introduced new restaurant gift cards in the United States that were aimed to support the struggling dining industry due to the Covid-19 pandemic.
Additionally, rising corporate incentives and loyalty programmes that reward employees with gift cards and increase retail spending in this area all contribute to the market's expansion.For instance, in March 2020, the Province of Prince Edward Island partnered with Sobeys to offer gift cards to Islanders who have been laid off due to the Covid-19 pandemic. The Employee Gift Card Program offered approximately USD 78.11 Sobeys gift cards to individuals and small businesses that were undergoing economic hardships in the province.
In addition, growing retailers and online streaming services such as Netflix, Prime Video and others offer gift cards to attract new customers in this region. For instance, Netflix offers physical as well as virtual gift cards that would allow consumers to pay for Netflix without a credit card.
Competitive Landscape
Various market players operating in the gift cards industry include Amazon.com, Inc, Apple Inc, American Express Company, Blackhawk Network Holdings, Inc, Best Buy Co., Inc., Walmart Inc., Starbucks Corporation, InComm Payments, Chipotle Mexican Grill Inc, and QwikCilver Solutions Private Limited. These manufacturers are actively indulging in industrial collaborations and acquisitions to enhance their product offerings and increase their growth as well as geographical reach.
For instance, in January 2022, Blackhawk Network announced a strategic partnership with Tender Retail to expand the delivery of gift cards payment, integrate with enterprise merchants along with enhancing payment options and meet the diverse demands of consumers.
Also, in November 2021, Apple announced the launch of the Holiday Gift Guide and personalized holiday cards at Apple. This guide features preferable recommendations for customized creatives and photographers for those passionate about health, fitness, and entertainment.
KEY MARKET SEGMENTS
By Card Type
-
Open Loop Gift Card
-
Closed Loop Gift Cards
By End-User
-
Retail Establishments
-
Corporate Institutions
By Geography
-
North America
-
U.S
-
Canada
-
Mexico
-
-
Europe
-
UK
-
Germany
-
France
-
Rest of Europe
-
-
Asia-Pacific
-
China
-
India
-
Japan
-
Rest of Asia-Pacific
-
-
RoW
-
Latin America
-
Middle East
-
Africa
-
REPORT SCOPE AND SEGMENTATION:
|
Parameters |
Details |
|
Analysis Period |
2021–2030 |
|
Base Year Considered |
2021 |
|
Forecast Period |
2022–2030 |
|
Market Size Estimation |
Million (USD) |
|
Market Segmentation |
By Card Type (Open Loop Gift Card, Closed Loop Gift Card) By End user (Retail Establishments, Corporate Institutions) |
|
Geographical Segmentation |
North America (U.S., Canada, Mexico) Europe (Germany, UK, France, Rest of Europe), Asia-Pacific (China, India, Japan, Rest of APAC) Rest of World (Latin America, Middle East, Africa) |
|
Companies Profiled |
Amazon.com, Inc, Apple Inc, American Express Company, Blackhawk Network Holdings Inc, Best Buy Co., Inc., Walmart Inc., Starbucks Corporation, InComm Payments, Chipotle Mexican Grill Inc., QwikCilver Solutions Private Limited |
KEY PLAYERS:
-
Amazon.com, Inc
-
Apple Inc
-
American Express Company
-
Blackhawk Network Holdings Inc
-
Best Buy Co., Inc.
-
Walmart Inc.
-
Starbucks Corporation
-
InComm Payments
-
Chipotle Mexican Grill Inc.
-
QwikCilver Solutions Private Limited
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