First Data 2011 Year-End Prepaid Gift Card Analysis
2011 Year-End Prepaid Gift Card Market Analysis: Emerging Strategies and Demand Drive Surge in Sales. This 33 page analysis provides key insights on observed consumer purchasing behavior for gift cards, based on our proprietary SpendTrend® databases, for the last six months of 2011. This market analysis provides detail on the growth of gift card activations, redemptions, and reloads for the four major gift card categories: Casual Dining, Specialty Retail, Quick Service Restaurants, and All Closed Loop. A special section focuses on holiday gift card sales, as nearly 28% of the total annual dollar volume of gift card activations took place during this 5-week period. First Data also offers an optional companion document which describes gift card purchasing behavior during the first six months of 2011. Publication Date: March 2012 Author: Kathleen Uehling, Product Manager, First Data Advisors.
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Selected Key Insights:
· Consumers Purchase Higher Valued Gift Cards from Specialty Retailers as Gift Card Incentives Decline. Across most major retail categories, First Data Advisors observed a reduction in the number of incentive gift cards. Instead, merchants provided deep discounts on product prices. This trend was especially evident in the Specialty Retail category, where there was a reduction in the number of activated gift cards. Discretionary spending during the holiday season increased due to pent-up demand for “wants” instead of basic “needs” as well as the result of the greater utilization of credit. This behavior did boost the average dollar amount activated for most Specialty Retailers, including Clothing and Accessories Stores, whose programs had struggled to gain traction following the recession.
· Easing Macroeconomic Headwinds Boost Gift Card Sales. The average gift card dollar volume growth on a year-over-year basis increased 10 percent during the last six months of 2011. Global inflationary pressures appear to have temporarily eased, and the U.S. unemployment rate for December fell to its lowest level in 2 1/2 years. Financially stable consumers shopped earlier in the holiday season for prepaid cards and added more value to their purchases than in 2010.
About the Author:
Kathleen Uehling is a Product Manager with First Data Advisors, the payments consultancy arm of First Data Corporation. Within her Advisory role, she specializes in developing customized benchmarking solutions for retail merchants utilizing First Data’s SpendTrend® proprietary database of consumer spending. Ms. Uehling previously served as a member of First Data’s Competitive Intelligence unit for almost a decade where her focus areas were Emerging Market initiatives for Prepaid, Loyalty, Fraud & Risk, and Analytics payment products. She holds her Masters of Business Administration degree with a concentration in Management Information Systems from the University of Nebraska at Omaha. Ms. Uehling also earned her Bachelor of Science in Business Administration from Creighton University with co-majors in Finance and Economics.
Why First Data Advisors?
First Data Advisors combine insight and unique intellectual property from First Data SpendTrend analysis to deliver customized payments consulting. Our advisors, with over 25 years experience in the payments and financial services industry, provide insights into consumer buying behavior, implications to your business, coupled with timely recommendations and proactive strategies.
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