Research Reveals Why UK Consumers Purchase Gift Cards

In a recent study, Blackhawk Network, a leader in the prepaid card industry, found that in the U.K. several segments of shoppers find convenience and value in gift cards. Yet there’s opportunity to market more efficiently to certain groups and alert them to the allure of gift cards—especially Grumpy Grandads.

In the United Kingdom, gift cards can capture the fancy of those who give and those who receive – across the spectrum of shopping-happy consumers and even curmudgeons.

In a presentation titled “Gift Card Buyers of the United Kingdom: A Segmentation Study,” Blackhawk Network looked to discover why people, specifically its customers in the U.K., give gift cards.  The reasons, the company found, are as varied as the motivations that spur gift giving in the first place.

Recognizing a lack of market research available on this topic in the U.K., and to support its network of partners with decision-making, Blackhawk conducted a national study in the U.K. that surveyed 991 gift card buyers online. Segmentation and qualitative data showed that a number of factors contributed specifically to the intent and ultimate purchase of gift cards.  Those factors, which numbered half a dozen, Blackhawk noted included “shopping in a hurry,” a preference for online shopping, price sensitivity and a “need for emotional meaning” when gift-giving, according to responses.

Respondents were themselves broken down into segments according to some generally defining characteristics, said Blackhawk. Among those segments: “Busybodies,” a segment that usually is in a hurry during shopping, while also preferring to buy items online.  Demographically speaking, the Busybodies skew a bit younger, with 43 percent of this segment falling under the age of 35.  The group buys the most gift cards of all respondents surveyed, according to the study, with 73 percent stating they like to give cards more than they do other types of gifts.  And a majority, or 62 percent of this group, likes to use smart devices to make their gift card purchases.

Following the Busybody segment is the “Let’s Shop” cluster that buys the second highest tally of cards, at 7.7 annually.  That group is marked by homemakers and retirees, and they tend to spend more on individual gift cards.  They also plan well in advance, with only 15 percent stating that they buy gift cards at the last minute – and a whopping 89 percent told Blackhawk they like to give the cards because people like to receive them.

The “Easy Way Out” buyers view, and buy, gift cards based on convenience, with an average purchase of 6 cards a year.  Most of the purchases are for the buyers themselves – i.e., they are not typically given as gifts.  The hallmark of the “Easy Way Out” buyer is gift cards tied to online retailers and music services.

Another group, or cluster, is known as “Grumpy Grandads” – a segment that perhaps obviously skews male (at 62 percent of the segment) and a bit older, at 45 years of age and above.  The key differentiators here include a reluctance to buy gifts cards, and an overall dislike of shopping as an activity.  Only 38 percent of those people who fall into this category feel that gift cards offer a convenient way to shop – and they are not all that enthused when they receive gift cards either.  The Grumpy Grandads buy only five gift cards annually, among the lowest in the Blackhawk survey.

Finally, there are those individuals who would be classified as belonging to the “Emotional Gifter” group, a segment defined by strong gender skew, at 73 percent female, and a majority of the entire subset, at 76 percent, like to buy gifts that have emotional attachment in place.  In addition, these buyers view gift giving as a fun activity.  But gift cards may not be top of mind for these consumers, as 80 percent say they choose to buy gift cards only when nothing else catches their eye to purchase instead.

So: What to do with the data? In reference to actionable ideas, the Blackhawk survey recommended that promotions be aimed at specific groups, and that segments should be approached via their favored shopping channels – whether online, for example, or in a bricks and mortar location, such as in a grocery store.

And among key strategies to pursue for gift card issuers: Blackhawk recommends what might be seen as a two pronged approach, wherein the message states that gift cards give recipients choice, and also that the cards are convenient. Choice appeals to several segments, according to the survey, and convenience motivates those segments with a sense of being pressed for time.

There are also opportunities to address some gaps in gifting with cards – say with those buyers who don’t get cards on an occasion such as Christmas.  In that case, a targeted message could state that would-be buyers could use cards for “rush” gifts.  Oh, and one final piece of advice, says Blackhawk…don’t ignore the curmudgeons, who might find it a bit more convenient to buy cards at a grocery rather than their traditional retail location.  They tend not to know that gift cards are preferred by recipients, and a successful marketing strategy might alert them to just how much these cards are indeed appreciated.




About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

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