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Holiday Trends | 2
Introduction
During the 2013 holiday season, gift cards remained a popular gift among consumers.
According to the National Retail Federation (NRF), in 2013 gift cards were at the
top of consumer wish lists for the seventh year in a row. As consumer interest in gift
cards remains strong, retailers look to maximize gift card sales in stores and through
eCommerce sites. While there is an immense amount of data around the traditional
purchase and use of physical gift cards, there is limited data around both digital gift cards
and the purchase of cards from online websites and mobile devices.
In November 2013, InComm Digital Solutions commissioned a survey to understand
consumer habits, preferences, and intentions around purchasing physical and digital
gift cards from online websites and mobile websites/apps. The survey results indicate
interest in digital gift cards is rising, instant delivery is a driving factor for consumers when
choosing digital delivery, and, above all, consumers want to be able to choose between
digital and physical delivery.
DIGITAL ON THE RISE
Consumers are familiar with digital gift cards: 78% of consumers surveyed have received
a digital gift card. Additionally, interest in digital is growing, with nearly 70% agreeing they
are more interested in purchasing digital gift cards now than two to three years ago and
74% agreeing they are likely to purchase a digital gift card in 2014.
INSTANT DELIVERY DRIVES DIGITAL SALES
The survey confirmed that plastic gift cards remain popular among consumers and should
not be ignored as an important component of eCommerce gift card sales. But a key
differentiator between physical gift cards and digital gift cards is instant delivery. When
consumers were asked why they have purchased digital gift cards rather than physical, the
most common response was instant delivery, cited by 62% as a driving factor.
CONSUMERS WANT BOTH
The survey ultimately revealed that when it comes to eCommerce gift card sales, it
shouldn’t be an “either/or” choice between physical and digital: consumers want both. An
overwhelming 87% of consumers want the option of both digital and physical gift cards
when purchasing from online websites or mobile websites/apps.
Consumer preferences captured in this survey make it clear that both physical and digital
gift cards are important to eCommerce sales. But is this preference proved out in real
sales? To understand how consumers are actually behaving, we turned to sales data from
our own platform. What we found for the third year in a row is, indeed, both digital and
physical gift cards are important to eCommerce sales. What was also apparent for the
third year in a row is that digital gift cards can create additional sales opportunities when
consumers are making last-minute purchases on an eCommerce site and don’t have time
to wait for a card to be shipped.
87% want
the option of
both digital
and physical
gift cards.
Interest in digital
gift cards is rising,
instant delivery is
a driving factor
for consumers
when choosing
digital delivery,
and consumers
want to be able to
choose between
digital and
physical delivery.
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Holiday Trends | 3
The following data from the InComm Digital Solutions platform illustrates the
incremental sales that can be captured by offering digital gift cards through eCommerce
sites, showing that augmenting in-store gift card sales by offering both digital and physical
gift cards through eCommerce and mCommerce shopping carts is the most effective way
for retailers to maximize gift card sales.
Digital provides incremental sales
eCOMMERCE DECEMBER HOLIDAY SALES
InComm Digital Solutions has observed a consistent trend in eCommerce December gift
card sales: plastic gift card sales on eCommerce sites taper off as Christmas approaches
because shipping lead times mean gifts may not arrive for Christmas, and digital gift
card sales rise because instant delivery becomes the only option to receive a gift card
purchased online in time for Christmas. Note that this trend does not apply to in-store
gift card sales.
The chart below is aggregated data on December sales of digital and physical gift
cards fulfilled through the InComm Digital Solutions platform when our clients offer
both delivery options through their eCommerce sites. These retailers range in size and
represent multiple verticals.
In December 2013, eCommerce sales of physical cards peaked on December 17th,
with sales decreasing every day after that. Sales of digital cards began an upward trend
beginning on December 17th, with sales increasing after that and significantly peaking
on December 23rd and 24th. The decline in physical sales does not reflect a decreased
interest in physical gift cards, but rather indicates that consumers are aware of the time
it takes to ship items and want to ensure gifts arrive in time for Christmas. As the holiday
approaches, shipping lead times mean cards won’t arrive in time for Christmas resulting in
Plastic gift
card sales on
eCommerce
sites taper off
as Christmas
approaches
while digital gift
card sales rise
because instant
delivery means
gifts arrive in time
for Christmas.
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Holiday Trends | 4
the rise of digital gift card sales. In the six days leading up to Christmas, an overwhelming
80% of consumers purchased digital gift cards on eCommerce sites. Clearly, digital
gift card sales open additional revenue opportunities on eCommerce sites by enabling
last-minute purchases. Note that gift card sales for both delivery methods spiked on
December 2, 2013 due to Cyber Monday.
These eCommerce trends remain consistent with our data from the 2012 and 2011
holiday seasons. As illustrated in the above data from December 2012, digital and
physical gift card sales remain fairly even until the holiday approaches, when physical gift
card sales taper off and digital gift card sales remain strong through the holiday. In both
2012 and 2013, eCommerce sales for physical gift cards peaked on December 17, with
sales decreasing every day after that, and digital sales continued to rise as Christmas
approached, peaking on December 24th. InComm Digital Solutions’ eCommerce data
from December 2011 illustrates a very similar trend.
Interestingly, the data from 2013 has a high concentration of digital gift card sales on
December 23 and 24, while data from 2012 and 2011 reveals a more steady increase of
sales leading up to Christmas. We suspect that a contributing factor to the heavy spike
on December 23–24 in 2013 was the shortened holiday shopping season. The average
Christmas shopping season, which includes the day after Thanksgiving through Christmas
Eve, is typically 26-32 days. In 2013, Black Friday fell late in November (11/29), making
the 2013 holiday shopping season only 26 days. With a shortened shopping season,
Christmas snuck up on consumers, driving last-minute sales on the two days directly
preceding the holiday. Another factor could be that consumers are becoming used to
purchasing digital gift cards and receiving them immediately; consumers know they can
receive a gift card within minutes, so they don’t feel the need to plan ahead.
2013 DIGITAL GIFT CARD SPIKES
While the above examples document trends around Christmas gift card sales from
eCommerce sites, the same concept applies to any gifting holiday. The charts that follow
In 2012 and 2013,
eCommerce sales
for physical gift
cards peaked on
December 17, with
sales decreasing
every day after
that, and digital
sales continued to
rise as Christmas
approached,
peaking on
December 24th.
Digital gift card
sales open
additional revenue
opportunities
by enabling last
minute purchases.
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Holiday Trends | 5
illustrate physical and digital eCommerce gift card sales for the months of February
(Valentine’s Day), May (Mother’s Day), and June (Father’s Day) to show that these gifting
holidays repeat the same trend. In every case, sales of plastic gift cards on eCommerce
sites spike one to two weeks before a gifting holiday when consumers can be sure they
will receive shipped gift cards in time for the holiday. As the holiday draws closer, physical
gift card sales taper off while digital gift card sales rise. Digital delivery ensures that
consumers receive gift cards in time to give them.
In February 2013, physical gift cards spiked on February 2 and February 5 as consumers
purchased physical gift cards in anticipation of Valentine’s Day, allowing time for cards
to ship before the holiday. Digital gift card sales spiked on the day before and the day of
Valentine’s Day as consumers purchased last-minute gifts.
In May 2013, physical gift card sales started to taper off on May 8 and digital gift card
sales rise through Mother’s Day on May 12. Again, as a gifting holiday approaches and
the time needed to ship physical cards means they won’t be received before a holiday,
physical sales decline and digital gift card sales rise.
The same concept
applies to any
gifting holiday:
digital delivery
ensures that
consumers receive
gift cards in time
to give them.
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Holiday Trends | 6
While it is difficult to gather data for consumer behavior leading up to events like
birthdays or anniversaries because they happen throughout the year, the same trend is
likely to occur. A conservative estimate is that providing digital gift cards on eCommerce
sites can create additional sales on 18–25 days per year through last-minute sales.
Conclusion
When consumers are purchasing gift cards from an eCommerce site, they want to be able
to choose between physical and digital gift cards. Offering both is the most effective way
to maximize sales. While physical gift cards are highly popular and should not be ignored
as an important component of online gift card sales, providing digital gift cards can give
consumers more options and enables incremental sales around holidays when consumers
value instant delivery.
In June of 2013, physical gift card sales spike on June 3 and June 6 as consumers plan
ahead for Father’s Day on June 16. As the holiday approaches, digital gift card sales rise
on June 12 through June 16 presumably as consumers purchase last-minute gifts for
Father’s Day.
Offering both
digital and physical
gift cards is the
most effective way
to maximize sales.
Providing digital
gift cards on
eCommerce
sites can create
additional sales
on 18–25 days per
year through last
minute sales.
