The One Retailer Trick for Winning the 2021 Holidays (and Beyond)

After a tough COVID-affected 2020 holiday shopping season, 2021 is shaping up to be a happier holiday for retailers and shoppers alike. People are cautiously going back to parties, family events and brick and mortar stores.

Retailers, however, have been facing some new challenges for the 2021 holidays—shipping delays, out of stocks and the fast-changing buying habits of their customers. Fortunately, we know a trick for overcoming all of those challenges—offer gift cards and eGifts.

To learn more about gift cards, shopper attitudes and shopper behaviors (and share that knowledge with you), PaymentsJournal sat down for a podcast with Theresa McEndree, Global Head of Marketing and Corporate Brand at Blackhawk Network, and Don Apgar, Director of Merchant Services Advisory Service at Mercator Advisory Group.

Here’s your executive summary.

A Deep Dive into Shoppers

The holidays are always important to retailers. To help their partners make the most of any holiday season, Blackhawk Network conducts an annual study looking at consumer trends around holiday buying, spending, giving and getting. “We are keenly interested, especially in the last 20 months, in how consumers are going to behave,” said McEndree. “Consumer behavior has taken an unprecedented hit in how they buy, what they buy, and what is driving their brand affinity, so we wanted to dig in and understand how that applied to the holiday 2021.”

The supply chain issues add another layer to the study. “With the supply chain shortages,” noted Apga, “it’d be interesting to see if everybody gets what they want this Christmas.”

Shoppers who don’t want to deal with empty shelves or shipping delays have turned—in droves—to gift cards and eGifts. “It’s really the ability to give somebody something tangible at the holidays when you don’t know if something is going to be back in stock or when that toy is going to be available,” McEndree said.

This Year, Gifts Have More Meaning

The Blackhawk Network study uncovered a surprise trend: the increasing importance consumers are placing on meaningful gifts that align with their values. More people—especially Millennials and Gen Z people—would prefer to spend their money at retailers and charities that align with values like diversity, inclusion and environmental justice. Here are some numbers from the Blackhawk Network study:

  • 61% of overall consumers surveyed expressed wanting to find a way to give back with their gifting.
  • 79% of Millennials and 78% of Gen Z consumers intend to purchase gift cards that give back.

“When you look at where they spend their dollars and their time, charitable giving brands are aligned with things that are important to them, whether it’s community or the environment,” explained McEndree. “Things like that have become increasingly important and you’ve seen a lot of the leading brands either strengthen their position or grow their position when it comes to these types of initiatives.”

A study conducted by Accenture comes to similar conclusions. Accenture defined half of today’s consumers as “reimagined.” This means that 50% of consumers they surveyed said the pandemic caused them to rethink their personal purpose and reevaluate what is important to them.

“There’s a drive, almost to the point where consumers won’t do business with a brand unless they can validate that it aligns with their views on the world and social issues,” said Apgar. “The whole give-back concept is very important, especially in the gift card space.”

How Gift Cards are a Win-Win

Last holiday, shoppers needed a contactless, convenient way to buy and send gifts, and gift cards had a banner year. After all, everyone loves gift cards. You could pick the brand or service, personalize the gift card in different ways and send it off physically or virtually—even from your phone. Gift cards are fun to give, and fun to get. This is Win #1.

2021 consumers—while dealing with out of-stocks and shipping delays caused by supply chain shortages—are wanting to give more thoughtfully and meaningfully. Plus, they’re leaning more and more on digital connections. With more eGifts and virtual options, gift cards are the answer here, too. This is Win #2.

Together, they’re the reasons 2021 will be another record-setting year for holiday gift card sales. The study results are clear:

  • Consumers surveyed anticipated spending 41% of their holiday budget on gift cards, a 27% year-over-year increase from 2020.
  • 83% of consumers reporting wanting to give a gift card instead of a physical gift this year.
  • Younger adults are significantly more likely to want digital gift cards for all spend categories.

Give Your Shoppers What They Want

With the unique challenges and fast-changing customer expectations, today's retailers need to be ready for anything. Whether shoppers are in-store or online, retailers need to connect with them and give them what they want. And according to the Blackhawk Network study, what they want is gift cards.

Offering gift cards, both physical and virtual, is the trick retailers need to have a successful holiday, and beyond. “There are strong trends overall from an economic perspective, strong trends from an overall gifting perspective, and an increasing strength when you look at gifting,” said McEndree. “It’s good news for gift cards and the industry as a whole.”

Want more? To hear the entire podcast, Click here. Or, to read the entire research report, Click here.

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