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New Industry Report: Digital Gift Card Programs Offer Significant Untapped Revenue Streams for Retailers

Research identifies industry trends and best practices for U.S. gift card programs amidst ongoing in-store and online industry growth

For the seventh consecutive year, leading branded payments provider Blackhawk Network (BHN) has collaborated with NAPCO Research on its market-leading report on the gift card industry1. The 2024 assessment evaluated the digital gift card programs of 100 top U.S. merchants and found continued consumer interest in digital gift cards shows no signs of slowing, making investments in online gift card programs crucial for merchant success.

“The U.S. gift card market is forecasted to reach a total value of more than $247 billion by 2027 with digital gift cards and codes forecasted to account for nearly 55% of total gift card spending2. Consumers continue to seek out gift cards at a growing rate, but to fully maximize the ROI of a gift card program, merchants need to invest in both in-store and digital,” said Jay Jaffin, chief marketing officer, BHN. “An optimized gift card program meets the needs of today’s omnichannel shoppers while catering to the preferences of multiple types of gift card purchasers and recipients. Our latest report with NAPCO equips merchants with actionable insights and best practices that will allow them to enhance their customers’ experiences and unlock new revenue growth opportunities.”

In assessing the complete digital gift card experience, analysts evaluated the buyer and recipient experience, purchasing physical and/or digital gift cards from each retailer evaluated. For the 2024 evaluation, 100 merchants were selected across 15 verticals and evaluated based on 135 unique criteria. The resulting report offers a comprehensive view into the progress and areas for growth in consumer gift card purchase and recipient experiences.

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Key findings and takeaways from the 2024 evaluation include:

  • Gift card programs represent significant sources of untapped revenue. Over the last five years, long-term growth across all evaluated channels is meaningfully outpacing the average scores before the pandemic. Increasing program awareness and optimizing customer experience can help nurture revenue growth.
  • Some retail verticals are ahead of the pack in program execution. The health and beauty industry leads all verticals with the highest overall digital gift card program scores followed closely by general merchandise and sporting goods. Regardless of industry, personalization options represent smart ways to engage customers and run programs in a more strategic way.
  • Traditional online shopping channels remain relevant. Desktop continues to be the highest scoring channel across verticals. Keywords can improve site search results for consumers browsing online.
  • A mobile-first strategy can vastly improve gift card programs. Mobile apps are the lowest scoring digital channel evaluated and continue to represent a significant area for improvement, especially considering digital gift cards make excellent last-minute gifts and serve as powerful promotional tools. Leaning on mobile opportunities can be an innovative approach for selling and redeeming gift cards across all customer touchpoints.

New this year, the 2024 report evaluates the entertainment, fashion, gaming, online services and travel verticals. The report also includes a customer loyalty synopsis and introduced segmented scoring for the first time, which includes brand-only gift card programs as well as gift card mall programs (merchants that sell other brands’ gift cards in addition to their own).

The full U.S. Edition of the Benchmark Report: 2024 Digital Gift Card Leaders provides average scores for industry categories in addition to overall U.S. 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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