Spending on Gift Cards is Surging Ahead of an Unprecedented Holiday Season
InMarket, the leader in 360-degree consumer intelligence and real-time activation, released new research on gift card purchasing ahead of the holiday season. The report, COVID-19: Gift Cards During the Holidays 2020, indicates that shoppers are spending more on gift cards, more frequently, based on a combination of pandemic-related pressures and shifting consumer preference.
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Findings from the report are based on first- and third-party transactional data sources, including a proprietary panel of 6,300 opted-in, anonymized U.S. credit card/debit card consumers, and item-level sales data comprising more than 220,000 consumers in the U.S., in September and October 2020. Key insights include:
- More individuals are buying gift cards compared to last year. Unique purchases of gift cards were 363% higher in September and October of 2020 compared to the same period in 2019. This is a leading indicator not only of gift card popularity, but also that holiday shopping has begun earlier this year in part due to uncertainty around the pandemic.
- Average spending is up YOY. The average shopper is spending 17.58% more on gift cards in 2020, compared to 2019.
- Frequency of purchases has increased YOY. The average number of gift card transactions per shopper has increased by 12.33% compared to 2019.
“Americans and retailers have constantly adapted to a changing 2020, and flexibility has been paramount. We’re seeing this in spending patterns as shoppers migrated toward the convenience and flexibility of gift cards during the pandemic,” said Todd Dipaola, CEO, and Founder of InMarket. “Gift cards are no longer a last-minute gift– they add optionality in uncertain times showing the power of choice. The data is clear: gift cards are booming for the holidays, and the net effect could be a boost for Q1 as they’re used in the new year.”
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InMarket’s COVID-19: Gift Cards During the Holidays 2020 report also assesses the share of total gift card purchases and average spending per shopper on gift cards across various retail categories. Key findings include:
QSR + Casual Dining
- Starbucks owns the highest share of gift card purchases for any company in the assessment: The coffee chain was responsible for an incredible 16.06% of all gift cards sold in September and October of 2020. All of its QSR competitors sit below 2% share.
- While McDonalds trails Starbucks by a wide margin in terms of share of purchases at just 1.95%, its customers are spending more on gift cards than other QSR chains at an average of $30.81 per shopper.
- Among casual dining chains, Olive Garden owns the highest share of total gift card purchases at 1.35%, while Bonefish Grill ranks first for spending per shopper at $66.67.
- Among general commerce gift cards that work for many types of products and services, Visa holds the highest share of purchases at 10.08%, with shoppers spending an average of $100.54.
- Second place belongs to Amazon, which accounts for 6.74% of total gift card purchases and $53.09 spent per person.
- MasterCard owns a 2.41% share of gift card purchases, with shoppers spending an average of $39.57.
- Apple holds the highest share of total gift card purchases at 6.93%, with Google trailing at 2.95% share.
- Best Buy shoppers are spending the most on gift cards for this category at an average of $182.01 per customer.
- Lowe’s is leading the category with 3.3% of all gift card purchases and an average of $92.49 spent per shopper.
- Home Depot comprises 1.61% of all gift card purchases and an average of $50.06 spent per shopper.
According to Paytronix, approximately 70% of gift cards sold in stores will be redeemed within six months– which could create a natural influx in foot traffic after the holidays and into Q1 2021. Additionally, despite the growing interest and popularity of gift cards expected this year, an estimated $3 billion of gift card dollars could go unredeemed, according to Mercator Advisory Group.