2020 has been a strange year. The 2020 holiday season is no different.
Here’s what we know: The shopping season is longer, consumers are shifting to digital and people are buying different kinds of gifts.
At Blackhawk Network, we're always looking to stay on top of shopper trends for our partners—this holiday season more than ever. So this year, we created a survey of 1,500 consumers asking about their plans for shopping and gifting. Then we combined that data with our in-depth analysis of 50,000 US merchant locations and created the Blackhawk Network BrandedPay™ Holiday 2020 Report.
Blackhawk Network Head of Global Marketing Theresa McEndree and Ted Iacobuzio, VP and Managing Director of Research at Mercator Advisory Group, recorded a podcast to discuss highlights of the report. You can listen to the complete podcast here, download the complete report here, or read a quick summary of the podcast starting right now:
Thanks to COVID-19, Everything’s Different
The pandemic affected consumer buying habits long before the holiday shopping season began. It started with a decline in credit card use, something that will likely continue into the holiday buying season (and beyond). “There are a number of reasons for that,” explained Iacobuzio. “People remember 2008 and know that it’s easy to get in over their head with debt.” Meanwhile, debit and prepaid card payments are on the rise. That trend, too, is expected to continue.
Holiday Shopping Started Early
Blackhawk Network’s BrandedPay survey results revealed that holiday shoppers started much earlier this year, and the overall shopping period will be longer. Instead of pushing single-day or weekend-long Black Friday sales, merchants started talking about Black Friday early and are keeping bargains around longer. Same with Cyber Monday and other promotions. In McEndree’s words, “the goal for these merchants is to drive not mountains, but peaks.”
Consumers have already embraced this longer shopping season. 20% of our respondents said they’re thinking about the holidays earlier this year. The top three reasons listed:
- Concerns that the pandemic will impact their ability to shop
- Wanting to avoid crowds and long lines
- Trying to budget holiday spending
Gift Cards are Growing
Shoppers are turning to gift cards more than ever before. Over half (52%) of those surveyed said that they’re likely to buy more gift cards this holiday season compared to previous years. Even bigger, they expect to spend an average of $313 on gift cards this year, a 19% increase over last year’s average.
“When it comes to gift cards, you’re going to see them come into their own this holiday selling season,” noted Iacobuzio. “Consumers may turn toward closed loop gift cards if they know a recipient is a fan of a certain retailer or class of goods, or open loop gift cards if they perhaps don’t have a gift in mind, but still want to express goodwill.”
“The holiday will be really great for gift cards overall because they’re filling a lot of different consumer needs—in the product selection, accessibility from a purchase standpoint and the mediums in which they’re delivered and redeemed,” added McEndree.
Why are shoppers turning to gift cards more this year? Again, the pandemic has had a huge effect.
Families are traveling less and avoiding in-person gatherings. Gift cards are a convenient way to buy and send gifts from a distance.
Tough economic conditions are causing more economic stress. People are more likely to choose practical gifts or gifts that let the recipient treat themselves. Gift cards offer people the ultimate personal choice; they can go as fun or practical as they like.
Then there’s the workplace. Gift cards are already an employee favorite. With more people working from home, the ease and versatility of giving physical or digital gift cards is a natural holiday choice for employee appreciation.
Digital is in Demand
As with almost everything during the pandemic, digital is growing. So it’s no surprise that the demand for digital gifting is reaching an all-time high. In fact, Blackhawk Network sales data indicates that sales of eGifts sold on merchant websites are already up 74% from 2019.
“What this means for gift cards is we’ve seen a large migration to ecommerce, but also to digital gift cards,” said McEndree. “And that’s really important this holiday season because consumers are focused on connection and creating shared experiences, and gift cards are a great way to do that.”
Iacobuzio adds, “Gift cards are becoming an especially important channel for merchants to increase revenue this time of year.”
According to the National Retail Federation, gift cards have been the most requested holiday gift for 14 years in a row. This year, they’ll take on even a greater role. They offer unbeatable personalization, choice and versatility. And digital gifting is far too easy, fast and convenient to ignore—pandemic or not.
This year’s holiday season will be a make-or-break shopping season for many retailers. For those retailers—for all retailers—it’s important to have an optimized ecommerce gift card program in place. “We’re excited to share the research, and we’re excited to see what the holiday has in store for us all,” concluded McEndree.
This podcast was produced and is hosted by PaymentsJournal at:
If you’d like to read the full report, BrandedPay™ Holiday 2020 Report: Forecasting a Big Year for Gift Cards, request your copy here.