In today’s digital economy, gift cards are no longer just gifts—they are digital value. Digital value is now one of the primary ways businesses in the rewards, loyalty, crypto, and affiliate verticals send global payouts to consumers.
From Thanksgiving to Cyber Monday, it was another year of record-breaking consumer spending, with sales up 7.8% year-over-year to $38 billion in the US. As the global leader in sending digital value, Runa is diving deep into Cyber Week 2023 trends to understand how consumers who received a digital value payout actually spent their digital value. This peak shopping period is renowned for its special promotions and sales, and savvy consumers look to maximize the digital value they receive.
Despite uncertain economic conditions, the UK's gift card market has shown resilience and growth, especially in the retail sector, which accounts for 90% of the UK's market share. This aligns with our observations, where we've noted an increased consumer preference for rewards and loyalty programs that offer more flexibility and choice, especially during challenging economic times.
The well-established brands of John Lewis and Marks & Spencer are at the heart of the UK retail landscape. As the top redemption choices, their continued popularity speaks volumes of their adaptability to evolving consumer demands. When Brits want to shop confidently, they trust these two familiar, quality-centric retailers. Runa’s survey results back this up, based on the growing trend of consumers preferring to earn and use rewards at places where they spend most often.
In the competitive realm of UK online retail, it’s not just Amazon leading this charge. Retailers like Argos and Currys have stepped up with their robust ecommerce presence. This shift reveals a key consumer trend: a growing demand for versatile redemption experiences that let shoppers spend rewards at their discretion, both online and in-store. Our survey findings at Runa support this evolving preference, underscoring the importance of flexible digital rewards, which can give consumers the choice of where they want to spend.
Faced with the rising costs of living, 60% of consumers plan to rely on rewards more strategically to offset their everyday expenses. With Morrisons, Tesco, and Asda in our top 10 list, the concentration of supermarket spending is not just about filling carts but seeking savings and stretching pounds further. And it’s not just groceries. The popularity of budget-friendly fashion retailer Primark shows consumers are keen on keeping up with trends without breaking the bank.
Just Eat UK's popularity during Cyber Week can be attributed to its innovative “Freebie Friday” campaign, offering customers significant value with free food items. By extending this promotion over the Black Friday weekend, Just Eat tapped into the value-conscious mindset of consumers, making it a top choice in the digital rewards landscape and boosting redemption rates.
The story shifts as we focus on the US, revealing distinct consumer trends in technology, home improvement, and athletic brands. The US gift card market is valued at $162.11 billion in 2022 and is expected to skyrocket to $388.81 billion by 2027. It is rife with opportunities for merchants desiring to grow their B2B sales channel. This growth is evident in the diverse categories of gift cards redeemed by American consumers during Cyber Week.
In a digital age, Apple and Amazon lead the gift card redemption charge in the US market, capturing how integral these brands have become in the American lifestyle. This surge in technology and general retail sector sales mirrors the Runa research:t consumers prefer earning and using rewards where they frequently shop. It signals a broader trend where convenience and cutting-edge technology drive consumer choices.
Home Depot's standout performance in the US market proves that DIY home improvement has staying power. Post-COVID, Americans continue to invest heavily in their living spaces despite inflation and a tumultuous housing market. Cyber Week results showed an increased focus on home-related purchases, with gift cards becoming a tool for consumers to work on home improvement projects.
Bath & Body Works' impressive Cyber Week performance highlights a strong consumer interest in personal care and wellness. This is particularly true among Gen Z female shoppers, where the brand ranks as a top choice. Three-quarters of Americans (75%) say beauty products, cosmetics, and services are essential to them, as proven by consumers spending an average of $1,754 a year on related purchases. Bath & Body Works’ connection to this popular spending category and deep discounts propelled its gift card redemptions during this time.
Gift card redemption patterns for Target, Kohl’s, and Texaco underscored consumers’ clear preference for spending at merchants that are widely accessible and help increase the affordability of everyday needs. This behavior echoes the trend of consumers increasingly opting for gift cards based on convenience and practicality. In a market where familiarity breeds loyalty, well-known brands with an extensive physical presence will likely see higher gift card spending.
A surge in redemptions for brands like Dick’s Sporting Goods, Nike, and Foot Locker aligns with a global uptick in health and fitness consciousness. This trend is especially pronounced among younger generations, who increasingly use reward programs to complement their active lifestyles. They seek value from athletics brands that are integral to their lifestyles and align with their wellness goals.
Our Cyber Week insights reveal the significance of understanding and applying consumers’ gift card usage to engage new demographics, foster deeper customer relationships, and drive growth in the fast-growing and lucrative B2B gift card market.
Runa’s expertise in digital value payouts positions us uniquely to help merchants capitalize on these insights. Our approach is designed to address the multifaceted demands of businesses, merchants, and consumers with our digital value infrastructure. A single, streamlined integration opens doors to an expansive vertical of customers with payout options, enabling businesses to tap into new markets and increase sales through effective B2B strategies.
By partnering with Runa, merchants can leverage the power of digital value to grow their sales, lower transaction costs, and gain new customer cohorts.