Consumers to spend more than $200 on gift cards this year

Dive Brief:

Shoppers anticipate spending $213.49 on gift cards this year, up 7% from 2018, according to a Blackhawk Network BrandedPay survey of more than 3,000 consumers. Seventy-six percent of shoppers will buy at least one gift card or e-gift during the 2019 holiday season, an increase from 72% in 2018.
Among the top-selling gift cards in 2018 were dining; open-loop (gift cards that can be used wherever the network is accepted); toys and electronics; entertainment; and home goods. Consumers tend to add the most currency to gift cards within the recreation and travel; open-loop; electronics and toys; entertainment; fashion; and home goods categories, the report found.
In the U.S., the five fastest-growing gift card categories are grocery and convenience; entertainment and travel; health and beauty; home goods and furnishings; and department and big-box retailers.

Dive Insight:

The Blackhawk report's findings were congruent with the National Retail Federation's survey, which found that more than half of consumers wanted gift cards for the holidays. Previous research from the Blackhawk Network also found that millennial and Gen Z consumers are increasingly purchasing e-gift cards.

"As consumer demand for omnichannel innovations and alternative payments continues to increase, we anticipate gift card utility will also expand and contribute to sustained growth for the category this holiday and beyond," Theresa McEndree, Blackhawk Network vice president of marketing, said in a statement.

The report also noted that consumers remain confident in the country's overall economic health. According to Blackhawk's survey, 63% of survey respondents said they are confident in the economy. In fact, 32% of shoppers said they plan to spend more during the holidays this year, and 25% expected to expand their gift list to include more people, according to the report.

A September 2019 report from OpenX Technologies, however, found less than half of consumers think the economy has improved since 2018, but they also expect the economy to grow in 2020, which could drive consumers to spend more during the 2019 holiday season. According to findings from a Piper Jaffray survey, nearly a third of Gen Z shoppers think the economy isn't improving and have, in turn, decreased their spending by 4%, dropping it to its lowest level since 2011.

Those concerns aren't without merit. After all, consumers are watching how U.S. trade disputes could raise the cost of their goods and fewer shoppers say their financial health has improved during the past year, research from AlixPartners found. Plus, research from CreditCards.com found that consumers plan to increase their credit card debt to purchase gifts for loved ones, but economic uncertainty and consumer debt may make the holidays a bit less wonderful for shoppers.