Demographic and Psychographic Profiles of Gift Card Buyers

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Demographic and Psychographic Profiles of Gift Card Buyers

The behaviors, preferences, and attitudes of U.S. gift card buyers have been presented below, based on the different consumer segments including budget tamers, card enthusiasts, convenience shoppers, helpful husbands, and last resort. Additionally, insights on the consumer motivations in gift card buying such as convenience, and giving choice to the gift receivers; as well as insights on the top-performing gift cards categories based on different products/services (such as travel or beauty) or type (open/closed, physical/digital) have also been provided.

Behaviors and Preferences of Different Gift Card Buying Consumer Segments in the U.S.

According to consumer studies, gift card buyers are not a homogeneous group but rather are “a diverse group in their attitudes and behaviors” towards such factors as “different types of cards, the number of cards they purchase, preferred purchase locations and affinity for e-gift cards.” Based on their attitudes, behaviors, and preferences, gift card buyers can be divided into the following segments:

1. Budget Tamers

General View on Gift Cards

  • The budget tamer consumer segment is made up of the “most avid gift card purchasers of all consumer groups.”
  • They consider gift cards as not only a form of gifting, but also as a form of budget control/saving money mechanism, and therefore, buying gift cards is an integral part of their day-to-day lives.
  • This group has the highest percentage of gift cards in their gift-giving, and they do that because they think gift cards are “practical gifts.”
  • They are also interested in receiving gift cards from others, in both physical and digital forms.

Gift Card Use

Gift Card Preferences

Gift Card Purchasing Habits

  • Budget tamers buy gift cards in mass merchandisers and in the grocery channel, or from gift card malls in order to earn incentives, points, or rewards.
  • This segment is more likely than any other consumer segment to buy gift cards from websites that sell cards for multiple retailers.
  • This segment is also more likely to reload gift cards compared to the average consumer.

Attitude Towards Digital Gift Cards

2. Card Enthusiasts

General View on Gift Cards

  • Card enthusiasts have a strong affinity" for gift cards and “love to give and receive cards,” more than the average consumer.
  • In their opinion, gift cards provide the value of choice to the recipient, as he/she has the power to choose his/her own gift.
  • Card enthusiasts also believe that gift cards are a “good way to introduce people to new places,” such as restaurants, retailers, or service providers that they (gift card receivers) may not usually frequent.
  • When redeeming gift cards, most card enthusiasts spend more than the value of the gift card.

Gift Card Use

  • Card enthusiasts are too busy to shop for gifts and like the convenience of buying gift cards for immediate and extended family members.
  • For them, any occasion is a gift card-giving opportunity, although they are most likely to give cards during the main gifting occasions, including the winter holidays and birthdays.

Gift Card Preferences

  • These buyers purchase more restaurant, mass merchandiser, and department store gift cards, as well as open-loop gift cards than other consumer groups.

Gift Card Purchase Habits

  • Card enthusiasts "love to shop and buy gift cards while they are shopping."
  • They purchase gift cards in “more channels than other groups as they tend to buy gifts while doing other shopping." One of these channels is gift card malls where they are more likely than other segments to use their debit card to pay for a gift card.
  • This segment spends more on individual gift cards.

Attitude Towards Digital Gift Cards

3. Helpful Husbands

General View on Gift Cards

  • This group is “fairly apathetic toward gift cards and does not particularly like to give or receive them.”

Gift Card Use

Gift Card Preferences

  • They buy gift cards from specific retail locations as they have a more traditional mindset regarding shopping, compared to the other consumer segments.

Gift Card Purchase Habits

Attitude Towards Digital Gift Cards

  • The helpful husbands segment is least likely to make purchases through smartphone or tablet, and are also least likely to purchase digital gift cards or store gift card information on their phones.

4. Convenience Shoppers

General View on Gift Cards

Gift Card Use

  • This segment buys gift cards for almost any and all occasions, with birthdays being the number one gift card-buying occasion; and also for other occasions like weddings, graduations, anniversaries, Valentine’s Day, rewards, and for appreciation.
  • When they receive gift cards, they view the cards “as an opportunity to splurge and buy something special for themselves.”

Gift Card Preferences

Gift Card Purchase Habits

  • When buying gift cards, this segment uses many channels driven by the need to save time/convenience.

Attitude Towards Digital Gift Cards

  • Convenience shoppers are amenable to e-gift cards, with some statistics showing that 47% of them prefer to shop for gift cards online on their phone or tablet.

5. Last Resort

General View on Gift Cards

Gift Card Use

  • They are more likely than other consumer segments to give gift cards to people they do not know well, as to them, gift cards are a 'last resort' present.
  • They also do not like to receive gift cards as presents, and "are less likely than the average consumer to request them or to enjoy the experience of picking out their own present" when given a gift card.
  • This segment is more likely than other consumers to prefer a traditional gift over an equally-, or higher-, valued gift card.


Insights on Consumer Preferences on Purchasing Gift Cards

Motivation to Purchase Gift Cards By U.S. Consumers

  • Consumers are motivated to buy gift cards due to the value/usefulness derived from them, which can be “value of time, convenience, experience, or choice.”
  • Specifically:

The Top Performing and the Fastest Growing Gift Card Categories in the U.S.

  • Physical gift cards are still more preferred than e-cards because they are “more personal and easier to use.” However, there is a rising interest in digital gift cards as they can be “sent instantly” and make purchasing “more convenient.”
  • Overall, the top-selling gift cards in 2018 were in: dining; open-loop; toys and electronics; entertainment; and home goods.
  • "Consumers tend to add the most currency to gift cards within the recreation and travel; open-loop; electronics and toys; entertainment; fashion; and home goods categories."
  • In 2018, the top-performing categories in the digital card space were: department stores, health and beauty, home goods, and apparel; while the low performing categories were in digital entertainment, grocery/pharmacy, and hotels.
  • By brand, the top 5 performers in the digital gift card space were: Amazon, Sephora, Williams-Sonoma, Bed Bath & Beyond, and Best Buy. Also, the top 5 individual brands with the best primary online customer journey were: Sephora, Williams-Sonoma, Ulta Beauty, The Cheesecake Factory, and The Home Depot.
  • A 2016 survey found that retailer-specific cards are the most popular type of prepaid cards, bought by 45% of U.S. adults. In 2019, U.S. consumers spent about $98 billion on gift cards from brands like Starbucks, Amazon and Home Depot. However, despite the retailer-specific cards having a command of the market, "60% of consumers would be interested in receiving a gift card that can be used for multiple brands within a specific category, and 64% would be interested in receiving one that can be used at a variety of local restaurants within a specific city or metro area."
  • The 5 fastest-growing gift card categories are grocery and convenience; entertainment and travel; health and beauty; home goods and furnishings; and department and big-box retailers.
  • With the rise in consumer preferences to "buy experiences rather than things, particularly millennials," travel categories such as hotels and airlines have a significant opportunity to promote the sale of their digital gift cards.

Research Strategy

To provide the psychographic details of gift card buyers in the U.S., we followed the structure of the consumer segments uncovered in the previous research, and provided their behaviors/habits, attitudes, and preferences as relates to gift card buying. We primarily used information from the previously uncovered white paper that gives a breakdown of the different gift card consumers that has been quoted in various articles and papers; but also used other technical sources with newer insights, that are nonetheless quite similar.
Sources
Sources