2014 prepaid consumer insights study

1
2 Gift cards are an effective way to drive foot traffic and increase overall spending. Driving Sales & Foot Traffic Respondents who receive either a plastic or a virtual gift card said that they spent an average of $23.41 beyond the original value of the gift card. This is an increase from $20.79 in 2012. Additionally, 51% of respondents said that receiving a gift card prompted them to visit a store more often than they would have otherwise. 1,224 respondents in 2014 749 respondents in 2014 of 2014 respondents said they were more likely Overspend 2014: $23.41 51% $20.79 Overspend 2012: 986 respondents in 2012 In the past 12 months, has receiving a gift card prompted you to visit a store more often than you would have otherwise? On average, about how much more did you spend beyond the original value of the single merchant gift card(s) you received in the last 12 months? New Trends. New Opportunities. THE 2014 PREPAID CONSUMER INSIGHTS STUDY For the thirteenth year in a row, First Data has commissioned a comprehensive study of U.S. consumers regarding gift cards. For the first time, this study not only sought to measure sales of plastic gift cards, but also virtual e-gift cards as well as consumer attitudes and behavior. This valuable research also reveals changes in usage and consumer perceptions by providing comparisons with similar research done in 2013. Time to think beyond the mobile tipping point Over the past year, the widespread adoption of mobile technology has triggered a fundamental shift in how people interact with gift cards. With apps that help people connect with friends, listen to music and find their way home, consumers are relying on their mobile devices in virtually every aspect of their personal and professional lives. And, as this year’s Consumer Insights Study reveals, the same holds true when it comes to purchasing, receiving and managing their gift cards. Data from both surveys was weighted to correspond to census distributions Surveys were conducted in September 2014 2,371 respondents were screened to have purchased or received closed-loop plastic or virtual cards in the past 12 months Online surveys were nationally distributed to 3,724 U.S. consumers over the age of eighteen USAGE SEPTEMBER RESPONDENTS RESPONDENTS DATA 2014 2,371 3,724 3 The Era of Online Compared to 2013, respondents are increasingly choosing to go online to purchase gift cards. Online purchases of gift cards increased substantially from 26% in 2013 to 34% in 2014, while on-premise purchases in store, at restaurant or entertainment locations decreased dramatically from 51% in 2013 to just 44% in 2014. Purchases of gift cards using a social networking site such as Facebook increased from 8% in 2013 to 13% in 2014. The percentage of respondents using an app, a new category, was 13%. Digital strategies are becoming key to a successful program. In person, at a store that sells gift cards for many different retail stores, restaurants, or entertainment locations (gift card mall) In person, at the specific store, restaurant or entertainment location By internet, using the specific store’s website By internet, using a website—other than a social networking site—that sells gift cards for many different stores, restaurants or entertainment locations By internet, using social networking site such as Facebook Using an app on your mobile device (New for 2014) By ordering via mail or phone from the store’s catalog Other 49% 45% 2014 2013 44% 51% 2014 2013 34% 26% 2014 2013 25% 21% 2014 2013 13% 8% 2014 2013 13% 2014 9% 8% 2014 2013 8% 2014 4% 2013 Reinforce brand messaging Drive more foot traffic back in store Offer targeted rewards Drive more sales through incentives, loyalty and rewards programs Today, retailers have so many new and exciting ways to reach out to consumers so they can: Why are gift cards more popular than ever? The following six consumer trends tell the story. 1 Virtual & Plastic Growth 81% of respondents said they intend to purchase the same, or more, plastic gift cards in 2014, with 20% saying they intend to increase the number of cards. 84% of respondents said they plan to purchase the same or more e-gift cards than last year, with 33% saying they plan to increase the number of purchases. MORE THAN LAST YEAR ABOUT THE SAME AS LAST YEAR FEWER THAN LAST YEAR 20% 61% 19% Compared to 2013, how much would you say you are purchasing? Respondents who purchased physical gift cards 1,089 respondents in 2014 Physical Cards 33% 51% 15% MORE THAN LAST YEAR ABOUT THE SAME AS LAST YEAR FEWER THAN LAST YEAR Compared to 2013, how much would you say you are purchasing? Respondents who purchased e-gift gift cards 511 respondents in 2014 Virtual/e-gift Cards Retailers need to utilize all form factors to optimize revenue. 6 Gift Card Apps Come of Age As mobile technology continues to blur the lines between our business and social lives, consumers are becoming increasingly more reliant on their mobile devices. In fact, 55% of consumers said they are interested in using an app to store their gift card information on their mobile phones, which is up from 51% in 2013. 58% of respondents said they would prefer to use one app to store multiple merchant cards rather than using separate apps for each merchant. Mobile apps are mandatory to a successful gift card strategy. 2,414 respondents in 2014 Said they want to use one app to store gift cards from multiple merchants No preference Said they want to use separate apps from each merchant 58% 18% 24% How would you prefer to store gift cards on your mobile device? 1,322 respondents in 2014 Are you interested in using a mobile app to store your gift card information? 55% Said Yes Given the proven effectiveness of gift card programs and their proven ability to attract new customers, build brand awareness and drive incremental revenue driving incremental revenue, it’s no surprise that most merchants have robust prepaid programs in place. In order to maximize the success of these programs, merchants must continue to innovate and evolve their efficacy to keep pace with consumer trends and new technologies. The Time to Evolve Your Gift Card Strategy is Now Take your gift card program to the next level. Contact an Advanced Marketing Solution representative or visit firstdata.com. Call Us Give us a call anytime-we’d love to hear from you. 866-965-8330 © 2014 First Data Corporation.All rights reserved. Follow First Data: Email Email us and we’ll get right back to you: [email protected] 5 To receive a discount 28% To make additional purchases 54% Loyalty/Rewards 35% Budgeting/ Money Management 24% Don’t carry cash 26% Education is the key to increasing reload amount and frequency. 68% of respondents have never reloaded a gift card. Respondents reasons for reloading vary. Over 50% who reload make additional purchases using their gift card. Additional reasons include earning loyalty or rewards and to receiving a discount. Budgeting and money management continue to be strong reasons to reload as well as the convenience of not having to carry cash. 1,190 respondents in 2014 Why do you reload? Reloading is a BIG Opportunity Incentives and Rewards Drive Sales Incentives, loyalty and rewards drive sales and 32% of respondents noted that even though they were not planning on making a purchase at a particular store, they did so because of an incentive being offered. 40% of respondents said they ended up spending more than originally planned because of an incentive being offered. Respondents also noted that on average they had purchased 2 cards in the past twelve months because of loyalty/rewards points being offered. Which best describes the influence that incentives or rebates had on your decision to make a purchase, if any at all? 1,217 respondents in 2014 Over the Past 12 Months 1,190 respondents in 2014 Because loyalty/reward points were offered 25 loyalty points On average, respondents 2.2 purchased GIFT CARDS 32% Made a purchase because of an incentive Spent more than planned when an incentive was offered 40% 4 Incentive, loyalty and rewards increase sales and drive purchasing.

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Page 1: 2014 Prepaid Consumer Insights Study

2

Gift cards are an effective way to drive foot traffic and increase overall spending.

Driving Sales & Foot TrafficRespondents who receive either a plastic or a virtual gift card said that they spent an average of $23.41 beyond the original value of the gift card. This is an increase from $20.79 in 2012. Additionally, 51% of respondents said

that receiving a gift card prompted them to visit a store more often than they would have otherwise.

1,224 respondents in 2014

749 respondents in 2014

of 2014 respondents said they were more likelyOverspend

2014: $23.41 51%

$20.79Overspend2012:

986 respondents in 2012

In the past 12 months, has receiving a gift card prompted you to visit a store more often than

you would have otherwise?

On average, about how much more did you spend beyond the original value of the single merchant gift card(s) you received in the last 12 months?

New Trends.New Opportunities.

THE 2014 PREPAID CONSUMER INSIGHTS STUDY

For the thirteenth year in a row, First Data has commissioned a comprehensive study of U.S.

consumers regarding gift cards. For the first time, this study not only sought to measure sales

of plastic gift cards, but also virtual e-gift cards as well as consumer attitudes and behavior.

This valuable research also reveals changes in usage and consumer perceptions by providing

comparisons with similar research done in 2013.

Time to think beyond the mobile tipping point

Over the past year, the widespread adoption of mobile

technology has triggered a fundamental shift in how people

interact with gift cards. With apps that help people connect with

friends, listen to music and find their way home, consumers are

relying on their mobile devices in virtually every aspect of their

personal and professional lives. And, as this year’s Consumer

Insights Study reveals, the same holds true when it comes to

purchasing, receiving and managing their gift cards.

Data from both surveys was weighted to

correspond to census distributions

Surveys were conducted in September 2014

2,371 respondents were screened to have

purchased or received closed-loop plastic or

virtual cards in the past 12 months

Online surveys were nationally distributed to

3,724 U.S. consumers over the age of eighteen

USAGESEPTEMBERRESPONDENTSRESPONDENTS

DATA20142,3713,724

3 The Era of OnlineCompared to 2013, respondents are increasingly choosing to go online to purchase gift cards. Online purchases of gift

cards increased substantially from 26% in 2013 to 34% in 2014, while on-premise purchases in store, at restaurant or entertainment locations decreased dramatically from 51% in 2013 to just 44% in 2014. Purchases of gift cards using a

social networking site such as Facebook increased from 8% in 2013 to 13% in 2014. The percentage of respondents using an app, a new category, was 13%.

Digital strategies are becoming key to a successful program.

In person, at a store that sells gift cards for many different retail stores, restaurants, or entertainment locations (gift card mall)

In person, at the specific store, restaurant or entertainment location

By internet, using the specific store’s website

By internet, using a website—other than a social networking site—that sells gift cards for many different stores, restaurants or entertainment locations

By internet, using social networking site such as Facebook

Using an app on your mobile device (New for 2014)

By ordering via mail or phone from the store’s catalog

Other

49%45%

20142013

44%51%

20142013

34%26%

20142013

25%21%

20142013

13%8%

20142013

13%2014

9%8%

20142013

8%20144%2013

Reinforce brand messaging

Drive more foot traffic back in store

Offer targeted rewards Drive more sales

through incentives, loyalty and rewards

programs

Today, retailers have so many new and exciting ways to reach out to

consumers so they can:

Why are gift cards more popular than ever? The following six

consumer trends tell the story.

1 Virtual & Plastic Growth�81% of respondents said they intend to purchase the same, or more, plastic gift cards in 2014, with 20% saying they intend to increase the number of cards. 84% of respondents said they plan to purchase the same or more

e-gift cards than last year, with 33% saying they plan to increase the number of purchases.

MORE THAN LAST YEAR

ABOUT THE SAMEAS LAST YEAR

FEWER THAN LASTYEAR

20% 61% 19%Compared to 2013, how much would you say you are purchasing?

Respondents who purchased physical gift cards

1,089 respondents in 2014

Physical Cards

33% 51% 15%

MORE THAN LAST YEAR

ABOUT THE SAMEAS LAST YEAR

FEWER THAN LASTYEAR

Compared to 2013, how much would you say you are purchasing?

Respondents who purchased e-gift gift cards

511 respondents in 2014

Virtual/e-gift Cards

Retailers need to utilize all form factors to optimize revenue.

6Gift Card Apps Come of AgeAs mobile technology continues to blur the lines between our business and social lives, consumers are

becoming increasingly more reliant on their mobile devices. In fact, 55% of consumers said they are interested in using an app to store their gift card information on their mobile phones, which is up from 51% in 2013. 58% of

respondents said they would prefer to use one app to store multiple merchant cards rather than using separate apps for each merchant.

Mobile apps are mandatory to a successful gift card strategy.

2,414 respondents in 2014

Said they want to use one app to store gift cards from

multiple merchants

No preference

Said they want to use separate apps

from each merchant

58% 18% 24%

How would you prefer to store gift cards on your mobile device?1,322 respondents in 2014

Are you interested in using a mobile app to store your gift card information?

55%Said Yes

Given the proven effectiveness of gift card programs and their proven ability to attract new customers, build brand awareness and drive incremental revenue driving incremental revenue, it’s no surprise that most merchants

have robust prepaid programs in place. In order to maximize the success of these programs, merchants must continue to innovate and evolve their efficacy to keep pace with consumer trends and new technologies.

The Time to Evolve Your Gift Card Strategy is Now

Take your gift card program to the next level.Contact an Advanced Marketing Solution

representative or visit firstdata.com.

Call Us

Give us a call anytime-we’d love to hear from you.

866-965-8330

© 2014 First Data Corporation.All rights reserved. Follow First Data:

Email

Email us and we’ll get right back to you:

[email protected]

5To receive a discount

28% To make additional purchases

54%Loyalty/Rewards

35%Budgeting/ Money Management

24%Don’t carry cash

26%

Education is the key to increasing reload amount and frequency.

68% of respondents have never reloaded a gift card. Respondents reasons for reloading vary. Over 50% who reload make additional purchases using their gift card. Additional reasons include earning loyalty or rewards and to receiving a discount. Budgeting and money management continue to be strong reasons to reload as well

as the convenience of not having to carry cash.

1,190 respondents in 2014

Why do you reload?

Reloading is a BIG Opportunity

Incentives and Rewards Drive SalesIncentives, loyalty and rewards drive sales and 32% of respondents noted that even though they were not planning on

making a purchase at a particular store, they did so because of an incentive being offered. 40% of respondents said they ended up spending more than originally planned because of an incentive being offered. Respondents also noted

that on average they had purchased 2 cards in the past twelve months because of loyalty/rewards points being offered.

Which best describes the influence that incentives or rebates had on your decision to make a purchase, if any at all?

1,217 respondents in 2014

Over the Past 12 Months 1,190 respondents in 2014

Because loyalty/rewardpoints were offered

25loyaltypoints

On average,

respondents 2.2purchasedGIFTCARDS

32%Made a purchase because of an incentive

Spent more than planned when anincentive was offered

40%

4

Incentive, loyalty and rewards increase sales and drive purchasing.