Budget Tamers - the emerging self-gifting market

Trends from the UK and USA identify new opportunities to increase your gift card market

In a research report published early 2017 by the UK Gift Card & Voucher Association (UKGCVA) among the many interesting facts published was something identifying the winds of change blowing through the industry. The report identified that millennials are set to be ‘the self-gifting generation’, with 17.5% admitting to self-gifting, suggesting an additional revenue stream and marketing consideration that gift card strategies should consider.

This is a trend not only happening in the UK market, it was supported by a report on the US gift card market compiled by the wallethub.com. They identified five different segments who make up the majority of gift card buyers. The first four represent shoppers who buy the cards primarily as gifts:

  • Card Enthusiasts Enthusiastic gift card buyers who also enjoy receiving gift cards as gifts. 
  • Helpful Husbands Older, male consumers who don’t have strong opinions about buying or receiving gift cards. 
  • Convenience Shoppers Busy shoppers who value the time savings and convenience of the gift card buying experience. 
  • Last Resort Consumers Reluctant gift card buyers who find gift cards to be an impersonal, “last resort” gift.

But ... the consumer type that spends the most annually on gift cards isn’t buying for anyone else – they’re actually self-gifting. While representing only 16% of the US market, the Budget Tamer outspends the average gift card consumer by 37%.

This emerging trend in the UK and US will doubtless grow substantially and spread to other markets and provides a great opportunity for retailers to capture a portion of the self-gifting market. 

Tranxactor sees that self-gifting leads to a reloadable gift product, merging the lines between gift and prepay. But a more interesting extension of self-gifting as a reloadable product is the addition of loyalty rewards and incentives. The UKGCVA identified that 76% of their respondents were looking for combined gift card and loyalty programmes. 

Get ahead of the pack! Talk to the Tranxactor team about how we can help you create or develop your gift card initiatives to take advantage of these trends.

Who are the Budget Tamers?
Budget Tamers: “Gift Cards Help Me Control My Spending”
Typically middle-aged, married and usually male, Budget Tamers are the most avid gift card purchasers of all consumer groups. They spend an average of nearly $300 and buy close to seven gift cards per year, both for others and for themselves. For Budget Tamers, gift cards are not always for special occasions: nine in 10 purchase gift cards for themselves as a way to spend within their budgets, making them more likely to do so than any other consumer group. They are also more likely to reload gift cards than the average consumer, which they spend in place of cash, particularly at coffee shops and discount stores. When Budget Tamers buy gift cards for others, they prefer cards from a specific retailer, which they view as more personal than “use anywhere” open loop cards. Their love of convenience extends to their purchase methods. More than any other segment, Budget Tamers like to buy gift cards from websites that sell cards for multiple retailers. Budget Tamers like gift card malls, too, and purchase from them to earn incentives, points or rewards. Perhaps because they frequently buy cards for their own use, they know which card they want to buy and will not purchase another card from a gift card mall if their desired card is not available. Overall, Budget Tamers are big fans of gift cards and express interest in receiving them from others. They are open to e-gift cards, with one-quarter of Budget Tamers having purchased at least one e-gift card in the past year. 

Source for buyer type definitions: First Data White Paper "GiftCardInsights2WP.pdf" Article sources: UKGCVA.co.uk; wallethub.com from various sources including Bain & Company, First Data, National Retail Federation, Tower Group, Venture Beat

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