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Welcome to a new week. As fall temperatures arrive in the Northeast US, a pair of industry events will be gathering leaders in some of the region’s largest cities. Plus, the economic calendar is bursting with reports, and Nike headlines the week in earnings.
Here’s a look at the industry events where brands and retailers will be gathering this week:
GS1 US Innovation Summit: Industry leaders discuss strategies to advance circularity in supply chains at this free, virtual event. The one-day summit features three panel discussions, a keynote presentation and more. Sept. 29
White Label Expo New York: The entrepreneurship-focused expo covers aspects of building an online business across retail, ecommerce, and sourcing. Partake in masterclasses, networking and showcases. Sept. 29-30
Natural Products Expo East: This Philadelphia trade show features more than 1,000 booths showcasing natural products, and a chance to learn about topics in the industry. Sept. 28 - Oct. 1
A week after the Federal Reserve delivered its third straight 0.75% rate increase, a number of economic reports for August are due from the federal government and others:
Durable goods orders: The US Census Bureau releases August totals of orders placed for delivery of hard goods that are meant to last at least three years. Sept. 27, 8:30 a.m.
New home sales: The US Census Bureau releases its monthly survey of residential sales. This measure is always a focus for home brands and retailers. Housing in general is a key market for the whole economy, especially after the Federal Reserve raised interest rates this year. Sept. 27, 10 a.m.
Consumer Confidence: The College Board will release its monthly survey that looks at consumers’ intentions in purchasing for the coming months. Sept. 27, 10 a.m.
Retail Inventories: The US Census Bureau will release estimates of retail inventories. Stock has been elevated at major retailers following a combination of easing supply chain bottlenecks and an influx of items that were in high-demand during the pandemic that were no longer as widely sought. Sept. 28, 8:30 a.m.
Personal Consumption Expenditures: The US Bureau of Economic Analysts will provide its report on spending, income and prices for August. The price report is widely known to be the inflation index that is preferred by the Federal Reserve, making it especially important as the central bank seeks to bring prices down. Sept. 30, 8:30 a.m.
Consumer Sentiment: The University of Michigan Survey of Consumers will provide its final reading of consumers’ outlook for the economy and inflation for September. Sept. 30, 10 a.m.
Some big names in retail and consumer goods are reporting earnings this week:
Tuesday, Sept. 27: United Natural Fooods
Thursday, Sept. 29: Nike, Bed, Bath and Beyond, Rite Aid, CarMax
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On average, customers spend $59 more than the value of their gift card, Fiserv found.
In retail, sales are often measured in goods, whether they are purchased for ourselves or someone else. There are plenty of strategies that brands and retailers use to increase those sales, whether it is marketing, loyalty programs or how that item is presented.
In most cases, these are two different parts of the equation for retailers: The product that is bought and the strategies that lead to the purchase.
That’s what makes the gift card unique.
It is an item you can buy, with a section in the store all its own. Eventually, it leads to the purchase of other goods, so the gift card is leads to a direct sale. Yet it’s also a means to build a retail brand and create incentives that both introduce customers to a store and keep them coming back.
That’s a key takeaway from the 20th Annual U.S. Prepaid Consumer Insights Study from fintech and payments company Fiserv.
At this point, the gift card feels like a staple of the shopping experience. But it is only about 30 years old. In 1994, Blockbuster Video pioneered the sale of cards for gifted purchases directly as a means to combat fraud in paper gift certificates. Since then, they’ve proven to have a multitude of uses that stretch beyond the holidays.
Starbucks and Amazon gift cards are commonly distributed as prizes at team-building events and as pick-me-ups by friends showing they care. In 2022, 60% of consumers said they received a gift card from an employer, according to the Fiserv report. That was a big increase from 32% in 2019. People appreciate the gesture. The survey found that 85% of employees think that gift cards from an employer make for appropriate incentives.
For people looking to show generosity, gift cards can also be a means to stretch dollars. At a time of high inflation, people are looking for deals with their discretionary purchases. Gift card promotions that offer discounts and bonuses are proving particularly popular, the study found. Two-thirds of consumers said promotions can influence them to purchase more, while more than half of consumers took advantage of such an offer in 2022.
Yet the more difficult consumer environment is also having an impact on overall gift card sales. In 2022, the growth of gift card purchases slowed.
“Overall, 56% of U.S. consumers purchased more gift cards in 2022 compared to 2021,” said Tom Niedbalski, VP of gift solutions at Fiserv. “This was a decline from the 73% of consumers who said they bought more gift cards in 2021 than they did in 2020.”
Inflation and less discretionary income were the driving factors for consumers who said they bought fewer gift cards during 2022, as 35% of consumers said inflation was the reason they were purchasing fewer cards.
It's important for brands and retailers to understand why consumers buy gift cards. But it's just as crucial to understand where they can fit in retail strategy. Beyond sales, gift cards can help drive repeat customers, and extend a brand. These tools are particularly valuable at a time when retailers are focused on profitability in a tougher consumer environment.
Fiserv explained four areas in which gift cards are of particular value for brands.The following is directly quoted from Niedbalski:
Improving cash flow and revenue. Gift cards not only drive in-store and online traffic, there is an associated “lift,” or overspend, when a gift card is converted into a sale. On average, customers spend $59 more than the value of their gift card.
Repeat customers. Retailers use gift cards to foster loyalty and customer engagement, ultimately leading to repeat customers. One way we see this play out is through promotions associated with gift card sales. For example: a consumer who buys a $100 gift card for the holidays will receive a $20 bonus card that can be used after January 1 – creating a pre-holiday sale and post-holiday transaction in the New Year.
Branded currency. A gift card places a merchant’s brand directly into the consumer’s wallet, increasing brand awareness and ensuring the merchant’s brand is with the consumer when they are looking to buy.
Year-round marketing. The gift card has grown beyond the traditional holiday season. From birthdays and graduations to anniversaries and babies, gift cards are becoming the most popular way to recognize milestones – giving retailers opportunities to run additional promotions throughout the year.