The gift card market in the UK is valued at £8 billion and one of the few sectors that is currently in the black. The market saw a 5.8% increase in 2020 and for the first time, B2B overtook B2C. All this and more we discovered in our recent Instagram Live interview with Mr Gift Card himself, Brian Dunne.
Brian is joint owner of Lavish, the spa, beauty and wellness gift card and founder of Giftcard Consulting and has decades of experience working with top retailers. Here we share some of his intel.
Gift cards are a form of forced sampling with a 100% return. No other marketing activity has this kind of hit rate. What’s interesting, is the psychology of gift cards. Brian did a research project for Boots Advantage Card which revealed that people ‘go large’ and treat themselves when they have a gift card. In the case of Boots, people bought more perfumery and electrical rather than everyday items. So it seems people buy what they want not what they need with a gift card. In the case of spas, people see the voucher as free money towards their day or stay and will often spend double or sometimes triple the amount when they visit.
Gift cards also encourage people to return. When someone is given something at full face value, their propensity to return is much higher than if they had received something at a discount. Research shows that if someone is given 50% off something they are emotionally inclined only to return when they are given that discount again. They tend to feel slightly cheated if they have to pay full price.
So what are Brian’s top tips when considering gift cards in your business?