Holiday Season Showed Increased Demand for Digital Gift Cards

PORTLAND, Ore. -- Digital gift cards are growing in popularity, and brands can achieve success by opening gift card sales up through all channels, according to internal 2013 holiday data released by InComm, a provider of prepaid product and transaction services. The data includes overall e-commerce sales of digital vs. physical cards throughout the month of December and the peak sales days for each.

Other figures showcase successful Black Friday sales of the real-world shopping app shopkick, indicating that in addition to online shopping, the rising role of mobile in commerce also drives demand for digital gift cards, InComm stated.

The data was aggregated from the InComm Digital Solutions (IDS) platform on sales of digital and physical gift cards from IDS customers' e-commerce websites throughout December. Highlights of consumers' purchasing behavior on these websites include:

• 57 percent of consumers purchased digital cards in December.
   
• 43 percent of consumers purchased physical cards in December.
   
• 80 percent of consumers purchased digital cards in the six days leading up to Christmas.
   
• 20 percent of consumers purchased physical cards in the six days leading up to Christmas.
   
• Sales of physical cards peaked on Dec. 17, with sales decreasing every day after that.
   
• Sales of digital cards began a marked upward trend beginning on Dec. 17, with sales increasing after that and peaking on Dec. 24.

Results show that retailers who sell both physical and digital cards from their e-commerce sites vs. those who sell only physical cards saw similar sales in the first half of December. However, sales of digital cards spiked significantly the six days before Christmas, allowing retailers that offered both cards to extend the sales lifecycle by nearly a week and drive significantly higher sales overall.

Shopkick allows users to earn rewards points known as "kicks" for entering participating stores, scanning certain product barcodes or making purchases. These kicks can be redeemed by choosing from a large rewards library that includes digital gift cards. Shopkick leverages the InComm Digital Solutions platform to instantly connect users with their digital gift card of choice, to be scanned at the retailer's point of sale. On Black Friday, shopkick employed the InComm platform to deliver nearly seven times shopkick's usual daily volume of digital gift cards. These numbers, along with a recent InComm survey, reveal that digital gift cards are rising in popularity with consumers who increasingly like to receive and store these cards on their smartphones for personal use, according to InComm.

"We're thrilled to be shopkick's partner and to have helped them successfully address such high demands on Black Friday," said Mike Fletcher, senior vice president of sales and marketing for InComm Digital Solutions. "In a recent consumer survey conducted by InComm, nearly 70 percent of consumers stated they are more interested in purchasing digital gift cards now than they were two to three years ago. Further, our own internal holiday data reveals the increased sales opportunities created by offering digital in addition to physical cards. These numbers demonstrate how brands benefit when they open up gift card sales through all channels."