Enhancing Consumer Experiences by Connecting Gift and Loyalty

Advances in digital technology continue to transform consumer journeys, evolving everything from the way brands engage with consumers to how shoppers complete their most basic purchases. Loyalty programs have long been a tried-and-true method for brands looking to engage, offering an opportunity to reward shoppers for repeat business and grow customer loyalty. To that end, recent advancements in digital technology have prompted businesses to reimagine how they deliver loyalty and rewards programs, with tighter integrations between gift card and loyalty programs helping create more engaging customer experiences.

In a recent Gift Card Gauge from Fiserv, we surveyed more than 1,000 consumers to understand how today’s shoppers leverage loyalty programs at their favorite brands, where gift cards fit in their experience, and how merchants are using gift platforms to enhance customer loyalty. Here is what we found:

Shoppers Embrace Apps to Maximize Gift Card Incentives

Consumers are no strangers to gift card loyalty incentives, as 74 percent say they have taken advantage of them. Additionally, 71 percent have downloaded a merchant app to manage loyalty rewards and gift cards. When it comes to what consumers like the most about merchant reward apps, 69 percent say they enjoy increased savings, while 62 percent say they use apps for increased opportunities for rewards. Businesses can keep customer satisfaction and usage rates high by making it easy for users to find deals and perks through their loyalty programs and within merchant apps.

Consumers Are Hungry for Gift cards

As inflation and interest rates continue to weigh down consumer spending patterns, many are placing increased priority on necessities over entertainment. Food-related businesses rank the highest among shoppers, with 58 percent citing “grocery” as their favorite type of business for gift card loyalty incentive perks, followed by restaurants at 42 percent.

Nonfood-related merchants can gain an edge by examining how preferences vary across demographics. Men are 62 percent more likely to favor entertainment gift card loyalty incentives, and consumers aged 30-44 are the only group to favor entertainment over restaurant gift card loyalty incentives.

Incentives Power Customer Decisions

One way to strengthen consumer engagement is to spotlight incentive programs that have significant influence over customer buying behavior. To that end, four out of five consumers say they have decided where to shop based on gift card loyalty incentives at least once, and 16 percent say these incentives “always” factor into where they choose to shop.

To capitalize on growing affinity for incentive programs, many merchants are prioritizing programs that consumers consider most valuable. For example, over half of consumers say the conversion of loyalty points into gift cards and bonus loyalty points on gift card spend are their favorite incentives. Additionally, 46 percent say a gift card reload bonus within a merchant app is most valuable. Loyalty incentives can also be key to entice shoppers to spend more per transaction, as four out of five consumers say they're likely to spend extra if it will help them qualify for a bonus gift card.

Balancing Personalization and Privacy

Though 67 percent of consumers are willing to share personal information to earn additional incentives, there are limits to how much they want to share and how much they want to be contacted. Sixty-two percent of consumers state that they don’t want to be overloaded with push notifications, 58 percent don't want repeat reminders and recommendations, and 57 percent have experienced a merchant app that asked to access too much data on the consumer's device. When building loyalty programs for the future, it’s important to consider the value of every consumer touchpoint.

Sam Lituchy is vice president and head of gift solutions at Fiserv, a leading global provider of payments and financial services technology solutions.