Benchmark Report Offers View Into the Australian Gift Card Market
For the third consecutive year, NAPCO Research and Blackhawk Network have partnered to produce an industry-leading report on Australia-based merchants’ gift card programs. The 2024 assessment included a review of the merchants' e-commerce gift card offerings (desktop, mobile web, mobile app, device agnostic), including the purchaser and recipient experience for both digital and physical cards of the brands’ own gift card. In total, each merchant was scored based upon 122 unique criteria. The full report can be downloaded here.
The report features data and analysis from the assessment of 50 Australian merchants across 10 product verticals. Key components evaluated included, but were not limited to, ease of discoverability (e.g., gifting section of the website/app, site search), offering flexibility (e.g., ability to purchase other brands' gift cards, design options, delivery options), checkout/post-purchase (e.g., payment options, integration with loyalty program), and recipient experience (mobile wallet-friendly, split tender, balance check).
New product verticals added to the 2024 assessment included entertainment, gaming, marketplace, and travel. In fact, 43 of the 50 merchants were new to the assessment in 2024. Data was collected between September 2023 and December 2023. Criteria related to gift card promotions and the gifting section of merchant websites carrying gift cards were evaluated during the holiday season (December 2023). NAPCO Research's analysts went through the buyer and recipient experience, purchasing physical and/or digital gift cards from each of the 50 merchants evaluated.
The Market Opportunity
The reason this report continues to be produced on an annual basis is the growing importance that gift cards can have on a merchant's top and bottom lines. Consider the following: The Australian gift card industry is forecast to record a compound annual growth rate (CAGR) of 10 percent from 2020-2028. The country’s total gift card market value will increase from $4.8 billion (USD) in 2020 to $10.1 billion in 2028.
Furthermore, the overall growth we’ve seen in e-commerce spending across the globe, including Australia, has been inclusive of merchants’ gift cards. E-commerce revenue in Australia is expected to show a CAGR of 7.4 percent from 2023 to 2027, resulting in a projected market volume of $63.0 billion (USD) by 2027.
Growing consumer demand for gift cards, particularly digital cards, presents a significant opportunity for merchants to acquire new customers, retain existing customers, and increase their revenues.
What the Assessment Data Revealed
The below image shows the average scores for the 50 merchants across each of the channels they were assessed, as well as the total digital score average. The average total digital score among the seven retailers that were assessed year-over-year was 56 percent, which is down from 63 percent for this same cohort in 2023.
When looking at the data for the individual merchants that were at the top of the 2024 rankings, an interesting note is that they represent five different verticals. This demonstrates the importance each of the verticals place on their digital gift card programs.
Lastly, in addition to the individual merchant rankings, the report includes a ranking of the 10 product verticals based upon total digital score average. Atop this year’s industry rankings is Grocery. The merchants in this category earned nearly two-thirds (64 percent) of the available points in the assessment. Specifically, they outperformed the total averages for the mobile web and desktop channels.
Coles, a leading merchant in the Grocery category, helped drive this strong performance, earning a perfect score for the B2B criteria. This is particularly impressive considering the other 49 merchants in the assessment received an average score of 31 percent for the B2B criteria. Furthermore, Coles’ score of 88 percent for the customer service criteria easily surpassed the average of the other merchants (57 percent).
In a follow-up article on the 2024 Merchant Gift Card Evaluation, Australia Edition, to come next week, I will share analysis of this year's data as well as best practices for improving performance across the gift card purchase and recipient experience. In the meantime, you can download the full report here.
