Plastic gift cards still lead over digital in B2B rewards market

Plastic gift cards still lead over digital in B2B rewards market

 National Gift Card Corp. (NGC), one of North Americas largest, independently-owned gift card companies serving the B2B loyalty, rewards and inc

 National Gift Card Corp. (NGC), one of North Americas largest, independently-owned gift card companies serving the B2B loyalty, rewards and incentive marketplace with over 500 physical and digital brands across the U.S., Canada, UK and Europe, released its annual gift card report detailing redemption statistics for B2B programs in 2017. Key findings include the following:

The big box category tops the list for the third consecutive year with 27 percent of the total volume in gift card programs tied to Amazon, the leader in the eight-company category. Category rankings for gift card sales are:

  1. Big Box Retailers – 26.8%
  2. Open Loop – 21.8%
  3. Entertainment – 17.4%
  4. Department Stores – 6.8%
  5. Quick Service – 5.1%
  6. Gas/Automotive – 5%
  7. Casual Dining – 4.4%
  8. Home Improvement – 3.8%
  9. Specialty – 3.5%
  10. Apparel – 2.2%
  11. Canadian Program Cards – 1.9%
  12. Grocery/Pharmacy – 1.3%
  13. Sports & Wellness – 1.2%
  14. Travel – 0.7%

Consumers Prefer Physical Gift Cards: Although decreasing by 3 percent over the past year, 75 percent of the volume in gift card program redemptions is still in physical cards versus 25 percent for digital gift cards (eGift cards).

Top 10 physical gift or reward cards (by load volume):

  1. Visa
  2. Amazon
  3. Walmart
  4. iTunes
  5. American Express
  6. Target
  7. Starbucks
  8. TJ Maxx
  9. Macy’s
  10. The Home Depot

Biggest Category Increases:  The Entertainment and Travel categories grew the most with B2B card sales growing by 139 percent and 97 percent, respectively, between 2015 and 2017. While still representing the smallest increase of overall gift card reward value (less than 1 percent of reward load issued to the B2B marketplace), the travel gift card category saw sales of brand-savvy cards such as Hotels.com picking up popularity as a reward redemption option in B2B incentive and loyalty programs.

Top 10 physical gift or reward cards (by quantity) are:

  1. Amazon
  2. iTunes
  3. Walmart
  4. Starbucks
  5. Target
  6. Visa
  7. American Express
  8. Subway
  9. The Home Depot
  10. Panera

Reflecting on the results, NGC President Eric Thiegs observes, “The agencies and corporations looking for a best in class gift card provider stress four similar requirements that affect their ability to run successful programs.”

Thiegs outlined the requirements:

  1. Brand Choice – The most successful loyalty programs have a targeted gift card catalogue that provides options across multiple merchant categories to match reward redemption options with stage of life and age demographic relevancy.
  2. Delivery Method – Whether it’s physical gift cards mailed to home or business, or digital gift cards sent in real-time via a gift card API, programs that offer the option of either physical or digital gift card delivery have a better chance of engaging participants as lifestyle, urgency, re-gifting and other considerations drive how users want to receive their gift card rewards.
  3. Quality and Security – Companies now rate potential gift card suppliers to ensure the cards and codes they supply are not only secure, but delivered with the highest level of quality oversight and capacity. Nobody wants to receive a gift card reward that a) doesn’t work, b) doesn’t arrive on time, and c) arrives poorly packaged or delivered.
  4. Speed – No one will wait 2-3 weeks for a gift card to arrive – it needs to be there ASAP.

“Managing the sourcing and fulfillment of gift cards for the B2B industry is not an easy task,” continues Thiegs. “In an age when automation, security, and program choice/flexibility are requirements, you’ve got to stay ahead of the trends to ensure you’re prepared to meet today’s consumer expectations.”

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