According to a new survey from the National Research Network, the perception that gift cards are impersonal is the top inhibitor for consumers purchasing gift cards, with nearly half of respondents citing that as a factor.
Keith Maladra, vice president of consumer intelligence at the National Research Network, told Brandweek that providing greater personalization around gift cards would help, but it would require a better understanding of the target audience and what appeals to them.
"For instance, gift card providers could customize gift cards for children by placing an image of a 'cool kid' on the card," he said.
Walmart, Macy's, Toys"R"Us, Starbucks and Dunkin' Donuts are among those offering personalized gift cards. It's done primarily via the web, allowing consumers to apply photos or other images to the cards. For example, Target's website now has 35 customizable gift card options - including some with lights and sounds - and groups them by theme (birthday, wedding, baby, puppy) and recipient (bride and groom, expectant parents, him, her, kids of all ages.)
Brandweek noted that consumers spent nearly 18 percent of their 2006 total holiday merchandise gift expenditures on gift cards, up from 13 percent in 2005, per the International Council of Shopping Centers.
Among
other findings in the study:
- Discount stores such as Walmart and Target were the most popular gift card benefactors, with 42 percent of respondents reporting purchasing a discount store card in the past year. Restaurants came in second (26 percent), followed by clothing stores (21 percent);
- More females (60 percent) than males (44 percent) reported buying cards in the last year;
- The average number of gift cards consumers receive tends to correlate with household income. As household income increases, consumers tend to purchase more gift cards;
- Christmas and birthdays were cited as the top occasions for gift card giving;
- This holiday season, younger consumers are expected to buy gift cards, with 78 percent being between the ages of 18-24;
- Fifteen percent of gift card recipients spend less than the total gift card amount.
Discussion Questions: Do you think greater personalization will provide another boost to gift card sales? What other ways can retailers drive gift card sales for the upcoming holiday season?