The use of digital gift cards grew over the holidays in 2014, making up 67 percent of the total gift cards sold over the season, up from 57 percent in 2013. Digital outpaced physical gift card sales, which accounted for the remaining 33 percent of sales, down from 43 percent in 2013.
The rise of digital gift card use is in keeping with a consumer attitudinal survey conducted by InComm, prior to the holiday season, which showed an increase in preference for digital gift cards. Of the consumers surveyed, 80 percent agreed that they're more interested in purchasing digital gift cards now than they were two to three years ago. More specifically, 89 percent of millennials are more likely to purchase a gift card today than a few years ago. The same survey revealed that 77 percent of respondents want the option to purchase a digital or physical gift card, and 34 percent say which one they prefer is depended upon the recipient.
As holiday shipping deadlines approached in 2014, the purchase of digital gift cards rose while the purchase of physical gift cards began to drop. In the six days leading up to Christmas, 88 percent of total sales were digital gift cards, up from 80 percent in 2013, and 12 percent of total sales were physical gift cards, compared to 20 percent in 2013. December 24 was the highest sales day for digital gift cards.
"Ultimately, data from the 2014 holiday season demonstrates significant overall digital growth across age demographics, especially in the final days leading up to major holidays," said Mike Fletcher, general manager, InComm Digital Solutions. "When it comes to digital gift cards, a winning strategy must incorporate choice: Consumers want to be able to choose between a digital and physical gift card and mobile or email delivery. Retailers need to deliver complementary offerings."
Coming off of the holiday season, many retailers are still embracing the lift in sales from gift cards—more than half of consumers received one as a gift last Christmas. And Sephora reported an 800 percent increase in the growth rate of its digital gifting revenue since partnering with CashStar commerce to create an in-app, instant and personalized gift card.
-See this InComm press release
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