There aren’t enough words to describe 2020, for starters, it was not what we had expected. But not everything was bad, over the last year here at Rise.ai, we followed gift card trends around the world. We were amazed to see the significant rise in gift card sales throughout the entire year and especially during Q4 and the holiday season.
181% Increase In Income From Gift Card Sales
As any retailer knows, eCommerce is a seasonal industry. For instance, Q4, the winter holiday season, is the peak shopping period and roughly accounts for 59% of yearly income. So there was no surprise when it was the most profitable quarter of the year, the big surprise came when we compared 2020 to 2019.
Online stores sold twice as many gift cards and increased their income from gift card sales by 181%.
December was the gift card month and accounted for 48.28% of gift cards sold across the entire year and 50.32% of income from gift card sales in 2020.
COVID-19 has accelerated the online trend that controls the retail market in the past couple of years. eCommerce bloomed in 2020, and gift card sales exploded. The last holiday season broke all records and was the most profitable season in eCommerce history.
Why Are Gift Cards So Trendy?
As previously mentioned, in our Q2 survey, there were three major trends in gift card sales over the last year:
- Buy Local.
- Corporate Gift Cards.
Although those trends were a major contribution to the increase in gift card sales, COVID-19 gave us one more reason to choose gift cards over other holiday gifts.
Due to disruptions in global supply chains caused by the pandemic, shipping cutoff dates were earlier compared to years before. Last-minute shoppers had more time, and social distancing forced families to spend the holiday season apart. Gift cards became the leading gift choice for millions of people worldwide.
We all can agree that there is no better last-minute gift for a faraway loved one than a gift card from their favorite brand or local store promised to arrive just at the right moment.
2020 Is Over, What We Can Expect From 2021
2020 shattered all of the experts’ predictions. No one was able to predict how 2020 would turn out. Our prediction for the months to come in 2021 depends on the outcome of how countries will come out of COVID-19 lockdowns.
Although a lot is left unknown, we believe that there are a few things that have changed for good, and some things that didn’t change at all.
Consumers learned how to shop online, and they are going to keep shopping from the comfort of their homes. Gift cards are the perfect fit for this trend.
It’s unclear if we will see last year’s increase again, however our analysis shows that gift cards will continue to dominate the market and will continue to be the best-selling product across industries.
We will continue to see the strengthening of online stores and eCommerce platforms in the next couple of years, and together with them, there will always be gift cards as the top digital product in any online store.
“Due to the COVID-19 pandemic, the e-commerce market and the digital gift cards sector, in particular, broke records already in the second quarter. This year the seasonality was more robust and made Q4/2020 the strongest quarter in the history of digital gift cards”, Nadav Berger, Rise.ai VP of Marketing explains, “we are expecting to see those trends in 2021 as well, gift cards are the most wanted product at any retail store, gift card sales will continue to dominate the market”.
Gift Cards: The Gift That Keeps Giving
Brands who want to take their online store to the next level must have gift cards as part of their collection. As 2020 had taught us, gift cards are resilient to changes and can help you cope with unexpected changes. Brands that took a step to integrate gift cards as part of their sales and marketing strategy were able to create revenue and engage with their customers all year long.