Growing Incentive Gift Card Market Provides Opportunities
Results of a new research study show the majority of U.S. businesses are increasingly using gift cards as a reward tool for multiple groups (channel, sales, employee and customer), and that investment in gift card rewards is both significant and growing.
The study from the Incentive Gift Card Council (IGCC), a strategic industry group within the Incentive Marketing Association (IMA) and the Incentive Research Foundation (IRF) provides encouraging news for the gift card and payments industries.
"The increase in gift card spending across mid-sized and large businesses shows an exciting uptick and having the study results helps our IGCC members optimize opportunities in the B2B marketplace," said Ashley Harris, IGCC vice president of education and director of strategic partnerships, National Gift Card. "Gift cards are an important option in incentive programs and will continue to grab a significant market share," Harris added.
"Looking beyond the incentive space, the impact of gift cards on the payments industry is expanding significantly. Gift cards, particularly digital cards, are becoming a form of branded currency and an increasingly important player in the payments industry," Harris explained.
Key findings from the IGCC/IRF B2B Gift Card Buyer study show:
- The majority of U.S. business choose to use gift cards as a reward tool for not one, but a number of groups (channel, sales, employee and customer): 61 percent of large companies are purchasing gift cards for an average of 2.4 different reward and recognition audiences; 69 percent of mid-size companies are purchasing gift cards for an average of 2.8 different rewards and recognition audiences.
- U.S. business investment in these tools is both significant and growing. On average, mid-size firms with significant enough gift card purchases to qualify for the study are spending $450,000 per year on gift cards across all programs, the largest firms are spending more than $1 million. 71 percent of mid-size and 52 percent of large companies say their B2B gift card spend is increasing.
- As a developed market with a number of buying options available, U.S. businesses have firmly developed opinions on the types of partners from which they buy. Within the largest firms, gift card suppliers receive the highest ratings on choice, ease and service, followed closely by agencies. Brands are seen as easy to work with, but offer less choice and service than alternatives. Online general merchants and retailers are easy to work with and offer a variety of options, but lag agencies and gift card suppliers on service.
In conducting the study, responses were measured by whether the gift card rewards were for sales, channel, employees or customers. Sales and customer budgets are the highest for large firms, while channel budgets are the largest for mid-size firms.