Promo - April 2008 - (Page S11) Gold Cards Why marketers are turning to gift cards (think versatility) Incentives Growth: It’s In the Cards <The F ORGET CASH. FORGET CREDIT CARDS. You’re just as likely to see gift cards being flourished on checkout lines. average annual expenditure by gift card purchasers last year totaled $288 (up from $281 in ’06), and should reach $326 by 2012, according to Packaged Facts. In addition, 62% of all U.S. adults bought a gift card last year, and that’s expected to rise to 67% within five years. <Gift And you can expect to see more of them. Two-thirds of U.S. consumers are now “extremely or very” familiar with gift cards, and over half bought them during the 2007 holiday season, according to First Data Corp. and National Retail Federation research. U.S. gift card spending hit $40.5 billion last year—up from $38.4 billion in 2006—and is on track to reach $52.2 billion within five years, a new Packaged Facts report estimates. And those numbers hardly tell the whole story. 4Over half of all gift card users spend more than the card’s value either some or all of the time (usually over two store visits), according to a 2007 survey from Comdata. And some experts say that this percentage is as high as 90%. 457% of the respondents to First Data’s survey reported that the card influenced them to purchase, 52% said it influenced their choice of store and 41% indicated it influenced their choice of brand. 4Three fourths of these consumers said they’re interested in purchasing or testing a product based on receiving an incentive gift card. And the same number would be more likely to make a purchase at a store offering an incentive card. 4A whopping 87% of those who have used gift cards want to continue to receive them as incentives. “Gift cards are here to stay, from both the customer’s and retailer’s standpoint,” says Rich Killian, president of RK Incentives and past president of the Incentive Gift Card Council (IGCC), a division of the Incentive Marketing Association. “In a more challenging economy, people may even value gift cards more.” Gift and loyalty/frequency rewards cards offer two critical benefits, convenience and choice. “For the recipient, gift cards represent ease of use and the freedom to buy what I want,” sums up Cindy Mielke, manager, national accounts, JCPenney Incentive Sales and IGCC president. “The more choice you give, the more powerful your program—and the more gift cards, the more choice,” adds Edward Shulkin, president and partner, Gift Card Partners. SPECIAL ADVERTISING SUPPLEMENT cards were at the top of consumers’ lists for holiday giving in 2007: 56.6% said they would be buying cards, according to the National Retail Federation’s annual holiday consumer intentions survey, conducted by BIGResearch. That was a virtual dead-heat with clothing/accessories (57.2%), and books/CD’s/ DVD’s/ videos/video games (57%). <The NRF estimated ’07 holiday gift card sales at $26.3 billion—up from $24.8 billion for the 2006 season and $17.3 billion in 2004. The average shopper bought between four and five gift cards, and spent $156 on the cards (up $10 from ’06). <Women list gift cards as their most desired present, and men rank them as third, according to the Consumer Reports National Research Center. <18% of employee incentive programs include gift cards, compared with 9% for gift certificates, according to PROMO’s 2007 premiums and incentives survey. <42% of the firms surveyed by Ameri- can Express in late 2007 said they would use gift cards for employee year-end gifts (versus 37% for spot cash bonuses, 35% for company products, 26% for food/food baskets, 25% for merchandise, and 24% for time off). In addition, 14% said they planned to use gift cards as year-end/ holiday gifts for business clients. S 11
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