As a $20B industry, prepaid gift cards continue to be not only a significant component of the way consumers shop for themselves and their friends and family, but also a very important addition to an independent grocery store’s suite of service offerings. At a recent conference put on by Blackhawk Network, this industry was dissected and broken apart, but not before considering the overall trends in consumer preferences and technology. Some of these trends are impacting the gift card industry directly already, while others provide a backbone to the way marketers need to think. Talbott Roche, President of Blackhawk Network presented these trends in her keynote address.
Connected 24/7 Consumer
There’s no escaping the fact that more consumers than ever are connected. With 2/3s of consumers having a smartphone, the phone is no longer used for just calls and texts, it is now making purchases. Consumers describe it as “convenient”, “fun” and the “best thing in life”. Consumers are also connected everywhere at all times. 50% of consumers are connecting from the bathroom and 66% from their car. There are more use cases, more devices and from that comes an increased expectation of productivity.
Changing Shopping Patterns
This connectivity changes the ways consumers can shop. 40% of consumers begin shopping for holiday gifts before Halloween, whether to avoid holiday stress or to spread out their gift shopping budget. No longer is the retailer solely dictating the shopping calendar based on sales or product availability. The options for price comparison and product inventory are wide open online. Plus, having seeing enticing products or offerings on their phone makes a difference, with 88% of shoppers agreeing having real time info on their phone makes them more spontaneous.
Retail giants like Amazon are training consumers differently. With 30-40 million US shoppers as Amazon Prime members, consumers are showing they are willing to spend more for 24-48 hour delivery. Amazon’s new program Amazon Dash allows consumers to quickly order replacement product, having the orders delivered quickly. What friction existed in the model of a consumer having to go to the store, purchase the product and then bring it home is now being removed. The Kate Spade and ebay collaboration on a storefront which allowed consumers to quickly purchase an item and have it delivered in an hour.
Big Data & Predictive Analytics
All this technology brings with it data. Real, actionable and useful data that 42% of retailers are using to predict future purchases. This data leads to personalization; personalization that must be done enough, but not too much, a fine balance of information sharing between the consumer and retailer. When done correctly though, shoppers benefit, making purchases due to an exclusive personalized deal or receiving automatic discounts at checkout. In-store beacons continue to enhance the personalization possibilities.
Retailers like Starbucks and Best Buy continue to push the limits when it comes to mobile payments, allowing consumers to send money to friends, make purchases online, compare pricing and pick up product at store.
Consumer preferences aren’t just shifting, the fundamental way POS systems interact are also changing, and with it the expectations of the retailers relying on those systems. Liability is changing hands and retailers are rapidly understanding their need to be compliant with new regulations. Apple Pay usage continues to climb, yet inevitably market consolidation will happen as consumers continue to accept the consolidation of their wallets as a more efficient way of making transactions.
Trends from outside the US will also continue to impact the way business is done within the US. Kenyans are transferring money via M-PESA, the Hong Kong population makes 12M transactions daily on Octopus, Brazilians utilize Edenred prepaid meal vouchers and in Britain over 68M Oyster cards have been issued. All evolutions in the way business is done across the world.
The Future Is Not Written Yet
Then there are the opportunities still coming: Biometric data, virtual currency and wearables. Each will likely impact business in its own important way.
Smart marketers know the trends impacting their industry before exploring any new technology or services. These trends will continue to evolve, and with them, the entire landscape of retail. No one will be able to nail each one, but their basis should be a structure to strategy and program development on the road ahead.
*stats, slides & insights were taken from Talbott Roche’s presentation at the Blackhawk Summit on May 6, 2015