Gift cards are helping to champion local businesses, to include independents, according to the Gift Card & Voucher Association (GCVA) and GlobalData’s State of the Nation Report. Around 20% of shoppers purchasing gift cards for themselves cited the desire to support local enterprises as a key motivator, with the report confirming that gift cards are becoming an increasingly effective way for retailers to attract fresh audiences.
This growing preference for community-focused shopping presents an avenue for independents to foster stronger customer relationships and boost their local presence.
Brands participating in multistore gift card schemes or offering their own gift cards are said to be reaping the rewards, particularly from younger demographics such as Millennials, who are embracing gift cards for their convenience and flexibility.
“Gift cards have evolved into a powerful tool for driving growth across the retail landscape,” says Hannah Shimko, managing director at the GCVA. “From introducing new customers to encouraging additional spending, their potential is enormous. As the shift toward digital solutions continues, brands that embrace this trend will be well-positioned to capitalise on these opportunities while supporting local businesses and building customer loyalty.”
Adds Hannah: “The findings showcase the untapped potential of gift cards in enhancing customer experiences, driving incremental sales, and fostering community connections, proving that this versatile tool is an essential asset for retailers navigating today’s challenging market.”
According to the research, 63% of gift card recipients discovered a new brand through their gift card. Among Millennials, this figure jumps to 74.6%, underscoring the power of gift cards as a customer acquisition tool. By integrating gift card offerings, retailers can raise brand awareness and reach untapped markets.
Gift cards also encourage shoppers to spend more. The data showed that 61% of shoppers redeeming gift cards spend beyond the card’s value, with many exceeding their balance by an additional £10 to £20. Consumers also use a gift card to ‘upgrade’ their purchase, going for a higher value item than they might have done previously.
The shift toward digital gift cards further amplifies their impact, especially as a choice for Gen Z shoppers. A surge in digital adoption is creating new ways for brands to engage with their audience and influence spending habits, with gift cards building relevance with shoppers who prefer digital shopping or to use mobile phones as their preferred payment method.
Top: Gift cards are on the up, presenting an opportunity for independent retailers to get involved.
