Mobile gift card expected to post strong growth in 2017

Posted by paynxt360 on January 9th, 2017

Gift cards continue to post strong growth across developed and emerging markets. E-gifting contributed USD 66 billion of sales in 2016 and registered a growth of 24%. Global gift cards market size is estimated to reach USD 570 billion, recording a CAGR of 12.5% during 2017-2021. In developed markets around 82% consumers have intended to purchase gift cards through online or mobile platform during festival / holiday season, while in developing markets this number is around 64%.

Digital Global Open Loop Prepaid Cards are also preferred by people in age group of 18 to 35 years. Majority of consumers prefer storing gift cards on mobile apps for self-use. Mobile gift cards are steadily making progress in terms of adoption and usage worldwide. With new technologies and features, this segment is likely to contribute significantly towards entire gift card segment.

Retailers have witnessed better brand messaging, increased sales and footfalls in physical stores due to gift card sales. There are certain trends which are expected to propel this segment forward in coming years.

• Millennial generation within age group of 18 to 35 years is currently major customer segment for online and mobile based gift cards which is expected to flourish in coming years. The convenience of buying a gift card at a single screen touch and customization option is driving interest of this target audience towards digital gift card purchases.

• Consumers are mostly opting for purchasing gift cards online and prefer storing them on mobile apps for usage. Therefore, merchants are working towards providing digital and plastic gift cards that are compatible with frequently used gift card storage apps.

• One of the key drivers for consumers to purchase gift cards is for the loyalty program or reward points associated with it. Loyalty programs and incentives will continue to remain the driving force of online and mobile gift card sales.

• Digital gift cards are expected to open up new brand marketing opportunities for retailers. Customized gift card options available online or on mobile platforms along with social media presence is expected to draw in more consumers for mobile gift card sales.