New Report Shows Retailers are Innovating to Meet Rising Consumer Demand for Gift Cards

Research shows industry trends, best practices and provides a benchmark for US gift card programs

A new report commissioned by Blackhawk Network (BHN), a leader in global branded payments and conducted by leading research firm, NAPCO Research, found that retailers are evolving and innovating on ways to sell, use or deliver gift cards as both consumer demand and the number of gift card use cases continue to increase. Now in its sixth consecutive year, the assessment evaluates the gift card programs of more than 100 top US retailers—identifying emerging industry trends, areas of opportunity and actionable best practices for retailers looking to optimize their omnicommerce gift card and payment programs.

For the total scores, retailers have recorded growth in each leg of the assessment every year. The verticals with the most opportunities for improvement last year—health and beauty and casual restaurant dining—were among the industries that showed the most improvement in the 2023 assessment.

“Gift cards provide strong ROI for retailers both online and when it comes to sales-per-square-foot ratio in-store. But continuously embracing innovation is key in evolving and growing omnicommerce gift card programs to meet consumers’ increasingly high expectations,” said Jay Jaffin, chief marketing officer, BHN. “The improvements retailers have shown across the board in this year’s report demonstrate that brands and retailers have begun to effectively utilize and account for the multiple use cases for gift cards throughout the customer lifecycle. Two-thirds of evaluated retailers in this year’s assessment displayed innovative ways to sell, use or deliver gift cards, which is up from just 15% last year. Shifts like that are making it easier for consumers to buy and spend gift cards where and how they want to use them for everything from gifting and self-use to promotions, refund disbursements and credits.”

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“Convenience Store News Industry Report 2022: Back to the Future”

In assessing the complete gift card experience from discovery to fulfillment, retailers were evaluated for how they promote the omnichannel sale of gift cards to consumers and B2B buyers in-store, online and via mobile. The cross-channel assessment evaluated over 100 leading retailers across more than 175 unique criteria and offers a comprehensive view into the progress and areas for growth in consumer gift card purchase and recipient experiences.

Some of the key gift card program trends from the evaluation include:

  • For the second consecutive year, total omnicommerce scores across all industry verticals increased by 7 percentage points. The health/beauty industry saw the biggest gains with a 19 percentage point year-over-year increase overall.
  • Mobile is the area where retailers showed the biggest improvements, led by mobile experiences for in-store shoppers, which showed the largest jump across all retailers with a 24 percentage point increase year-over-year. Mobile devices are more than just a communication or marketing channel and retailers are adapting accordingly.
  • As more shoppers increasingly utilized mobile shopping and returned in-store over the last year, the growth rate for desktop e-commerce/digital plateaued slightly.
  • While the overall score for mobile apps increased 7 percentage points in 2023, the channel remains the lowest scoring of all channels evaluated and continues to represent a significant area of opportunity for improvement.

For the first time, the 2023 assessment also included convenience stores as an assessed vertical. Convenience sales grew by nearly 25% in 20212, and since the category is conducive for selling gift cards quickly and easily to consumers on the go, it is a vertical worth tracking. A separate, smaller assessment for 25 digital ascendant brands was also added. The digitally ascendant brands showed room for improvement, scoring significantly lower than the average e-commerce/digital scores for the 100 retailers scored in the full evaluation.

The full NAPCO report provides average scores for industry categories in addition to overall US data and insights to help retailers assess the strengths and opportunities for their own gift card programs and prioritize areas for investment.

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