As industry changes continue to influence how we shop and spend, Fiserv’s Q2 2024 Gift Card Gauge examines the balance between technology and loyalty, and the role of gift card programs.
Each year, new technology evolves how we go about even the most basic tasks – such as ordering takeout or buying groceries. When it comes to shopping, loyalty programs have long been used to reward shoppers for repeat business with a particular brand. Recently, merchants have used the integration of technology and gift cards to enhance their loyalty programs, and consumers are taking advantage.
Consumers embrace merchant apps to maximize gift card loyalty incentives
Consumers are no strangers to gift card loyalty incentives, as 74% say they have taken advantage of them. Additionally, 71% have downloaded a merchant app to manage loyalty rewards, gift cards and more. Merchants who pay attention to what consumers like and dislike regarding the app user experience can stand out from their competitors. When it comes to what consumers like the most about merchant reward apps, 69% of consumers say they like increased savings, and 62% say they like increased opportunities for rewards. Merchants can keep satisfaction and usage rates high by making it easy for users to find deals and perks.
Loyalty incentives impact consumer decisions
Gift card loyalty incentives can majorly impact how some consumers spend money. Four out of five consumers say they have decided where to shop based on gift card loyalty incentives at least once, and 16% say these incentives “always” factor into where they choose to shop. Merchants can lure in shoppers by focusing on the gift card loyalty incentives that consumers consider most valuable. For example, over half of consumers say the conversion of loyalty points into gift cards and bonus loyalty points on gift card spend are their favorite incentives. Additionally, 46% say a gift card reload bonus within the app is most valuable. Loyalty incentives can also be key to entice shoppers to spend more per transaction. Four out of five consumers say they are likely to spend an extra $10 to qualify for a $20 bonus gift card reward.
Consumers are hungry for food-related gift card incentives
As soaring inflation and interest rates continue to weigh down consumers, many are placing an increased priority on necessities over entertainment. Food-related businesses rank the highest among shoppers, with 58% citing “grocery” as their favorite type of business for gift card loyalty incentive perks, followed by restaurants at 42%. Non-food-related merchants can gain an edge by examining how preferences vary across demographics. Men are 62% more likely to favor entertainment gift card loyalty incentives, and consumers aged 30-44 are the only group to favor entertainment over restaurant gift card loyalty incentives.
Merchants must balance personalization and privacy
These days, merchants can collect customer data more efficiently and comprehensively than ever before. Savvy businesses are using this data to create the perfect user experience, but is it possible to go too far? 67% of consumers are willing to share personal information with a brand they like if it leads to better rewards and incentives, but there are some caveats. Just shy of 70% of consumers believe there is such a thing as too much personalization. Even more concerning, over half of consumers say they have stopped shopping with a particular brand due to its invasive use of technology. Merchants should heed the warning about invasive technology and try to strike a balance between personalizing an experience and respecting a consumer’s privacy. Consumers reported excessive push notifications and reminders tend to push them away, as well as apps that ask for access to too much information.
Download the Q2 2024 Gift Card Gauge consumer survey results, or contact us today to learn how we can help implement loyalty and rewards solutions for your business.
