Gift cards are purchased by consumers (B2C) and businesses (B2B), but globally there is a notable difference in the split between B2C and B2B in different territories. In the UK and Europe, B2B is now king with 75% of gift cards sold via this channel as reported by the Gift Card and Voucher Association (GCVA) in H1 2021*. Whereas, in the USA, it is believed amongst industry players that less than a quarter of the total gift card market sales come from B2B, so there is a lot of potential yet to realise. Consumers in the US love gift cards and sales are strong, so what is all the fuss about B2B anyway?
We are fortunate at Jigsaw, as international gift card program managers, to see trends and growth areas across markets and territories so we thought we would share some insights. At one time for businesses, gift cards were just a time saver for employee incentives and rewards, or an easy option for seasonal gifts and work anniversaries, but now we expect these and more. Savvy consumers use their employee reward platforms to buy gift cards at a discounted price to budget household spending, purchase a treat or purchase a gift at the best price. They seek the value and great service, so retailers and service providers need to work even harder to acquire and keep new customers. Businesses have many opportunities to interact with this engaged pool of potential customers as more shopping is done online and via mobile devices.
Gift cards have many uses beyond employee and customer savings. They offer a very practical and economical way for insurance companies to pay claims. Customers can exchange loyalty points or cash back for retail gift cards, which encourages brand loyalty and more consumer spending for retail businesses. Customers can choose to exchange old tech for gift cards with an uplifted value rather than the cash equivalent. Savvy investors can convert their cryptocurrency to gift cards.
Issuing cash payments can be cumbersome and costly but a digital gift card can be issued instantly at little to no cost. Since retailers are able to offer a discount, businesses can pass it on and give their customers added value. The B2B gift card market clearly benefits businesses, retailers and consumers, so why not make the most of it? At Jigsaw, it is our job to bring innovation, and explore new markets and use cases for gift cards. We are excited about the future of branded currency and the opportunity to help businesses and consumers around the world get the most bang for their buck.
*Data source: from the KPMG/GCVA members data report H1, 2021