To help retailers get accurate insights into the performance of their gift card programs, NAPCO Research undertook a comprehensive review of the state of merchant gift card e-commerce offerings. This is NAPCO Research’s third annual Merchant Gift Card E-Commerce Evaluation. The cross-platform assessment evaluated 150 brands across 108 unique criteria.
As part of the evaluation, merchants' gift card programs were evaluated in three different channels: desktop, mobile website, mobile app. Continuing a trend we've seen in previous years, the average score earned for merchants’ desktop experience topped that of both mobile channels. Merchants earned, on average, 49 percent of the total points available for the gift card e-commerce evaluation of their desktop websites, compared to 42 percent for mobile web and 29 percent for mobile apps.
The primary online customer journey for purchasing gift cards has traditionally been desktop purchases of digital and physical gift cards, with digital cards then accessed by recipients via desktop or mobile. Therefore, it makes sense that merchants have performed best in this channel, as they’re trying to best serve the largest segment of their customer base.
However, with more shopping taking place on mobile devices, particularly as all generations began to exhibit this behavior while quarantined at home during the height of the COVID-19 pandemic, it's become critical that retailers optimize their mobile channels (website and app) for the sale of digital gift cards. Consider that 53 percent of traffic to online stores comes via mobile devices, according to Wolfgang Digital’s KPI Report 2019. And that number most certainly would be higher if the same poll were taken today, as consumers of all ages became more comfortable shopping via their phones during the pandemic. Therefore, brands must work to get the mobile gift card purchase experience at a level equal to, if not better, than what consumers are currently experiencing on desktop.
This is particularly true as merchants seek to acquire much-sought-after younger consumer demographics, who are more inclined to shop on their mobile devices. According to research from Blackhawk Network, Gen Z (42 percent) and millennial (46 percent) consumers are far more likely to make purchases on their mobile phones at least monthly compared to Gen X (29 percent) and baby boomers (13 percent).
In addition, Gen Z and millennial shoppers purchase digital gift cards more frequently than their older counterparts: 41 percent of Gen Z and 39 percent of millennial shoppers purchase a digital gift card at least every three months vs. 27 percent for the rest of the population. However, once again there's the caveat that this data was collected pre-COVID-19, and therefore likely minimizes the number of older consumers that are making purchases on their phones for the first time. Simply put: mobile is now a channel of priority for all consumers in a truly digital-first world.
An optimized e-commerce gift card purchase experience on mobile (website or app) can yield not only increased revenue, but also attract new customers. Furthermore, today's consumers have come to expect seamless omnichannel experiences from brands, whether it be a single sign-in process across all of a brand's digital properties, omnichannel fulfillment of orders (e.g., curbside pickup of online orders; buy online, pick up in-store), cross-channel marketing promotions, etc. That same level of expectation extends to the purchase of gift cards, no matter the channel the transaction occurs.
You can access the full report, 2019 Merchant Gift Card E-Commerce Evaluation, which includes the rankings of all 150 merchants (including ranked by product category) as well as more valuable insights gleaned from the data. In addition, you will find the study methodology, including all the details on when and how the data was captured, in the full report.
Related story: Retailers Turning to Gift Cards as Promotional Tools