Business Research & Analysis
Global gift card market size is expected to be around US$ 500 billion in terms of transaction value by end of 2020, recording a CAGR of over 14% during 2017-2020. In the past few years,usage of gift cards has gone beyond the traditional boundaries and new value proposition is emerging both for retail and corporate customers. While in retail segment, gift cards are increasingly being used for self-use by millennials; the card category is being utilized by businesses to strengthen brand loyalty, increase market share, and enhance product and service offering.In particular, below are the three key trends to watch out:
Inorganic growth strategy and further consolidation expected Leading technology firms are looking to consolidate their market position by expanding into new markets and broadening their offerings by opting for inorganic growth through acquisition of companies that provide innovativeproducts and services to gift card issuers. New players are expected to enter the technology platform market to help businesses manage their gift cards programs more efficiently. Furthermore, we expect data analytics services that track and understand consumer behavior to gain popularity as they help in improving ROI for gift cards programs. PayNXT360 expects consolidation in the technology platform space to continue over short to medium term. Established companies are likely to opt for inorganic growth and focus on acquiring start-ups that provide disruptive technologies to capture market share. Evolution of gift card exchanges results in healthy growth of secondary gift card market Secondary gift card market is not yet very popular in emerging markets of Asia, Latin America, and Africa. However, with maturity of gift cards, secondary Australia Prepaid Gift Cards market is expected to evolve and develop in a manner similar to developed markets such as the US and UK. New players are expected to enter the developing market with gift card exchange platforms with the aim to gain first mover advantage and drive growth and innovation in the category. Growing popularity of gift cards has led to an increase in the number of gift card exchange sites being launched in developed markets such as the US and UK. United Kingdom Prepaid Gift Cards exchanges allow cardholders to sell or trade unwanted gift cards. In a typical transaction, users lose some value of the gift card in order to get cash or a card that they actually want to use. In the last few years the gift card exchange service has evolved with new and existing players entering the market with innovative solutions. Loyalty program integration with gift cards is on the rise Integration of gift cards and loyalty programs with mobile phones is expected to be a major differentiator in the next few years. This trend is likely to hold especially true for the African market where mobile money services are very popular and a large population of consumers is comfortable using mobile phones to make transactions. Merchants prefer to issue their own branded closed loop gift cards to increase customer loyalty and encourage repeat purchase. With the advent of digital gift cards, these cards are increasingly being used by companies to track consumers’ purchasing behaviour to be able to better understand customers and to influence their future purchase decisions through personalized marketing. This not only helps in improving revenue generation opportunities but also helps businesses in improving customer loyalty towards the brand. To maximize success of their gift card programs and to keep pace with new technologies and consumer trends, businesses are focusing on continuous improvement and innovation.
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