Digital Gift Cards: Transforming Retail Strategies for Enhanced Engagement and Revenue Growth

Table of Contents

1. Key Highlights:
2. Introduction
3. Mobile Optimization: A Critical Component
4. Discoverability and Awareness: Driving Consumer Engagement
5. Crafting an Exceptional Recipient Experience
6. Streamlining Checkout: Reducing Friction
7. Leveraging AI for Personalization and Content Scaling
8. Year-Round Promotion: A Continuous Effort
9. B2B Opportunities: Tapping into Corporate Sales
10. Innovation in Gift Card Offerings
11. FAQ

Key Highlights:

• Digital gift cards have become essential for retailers aiming to increase engagement and revenue, with top performers optimizing their strategies across multiple channels.
• Best practices identified include prioritizing mobile experiences, enhancing discoverability, and personalizing the recipient experience to foster brand loyalty.
• A comprehensive study highlights the necessity for continuous innovation and effective year-round promotional strategies to maximize gift card sales.

Introduction

The retail landscape is witnessing a seismic shift, with digital commerce at its forefront. Among the various tools that retailers are harnessing to engage customers and drive sales, digital gift cards stand out as a formidable asset. The recent 2025 edition of Best Digital Gift Card Programs – Australia, produced by NAPCO Research and Blackhawk Network, delves into the effectiveness of 50 Australian merchants' digital gift card initiatives, offering insights that could redefine how brands approach gift card strategies. As consumers increasingly gravitate toward digital solutions, understanding the nuances of successful gift card programs is not just beneficial—it’s essential for survival in a competitive market.

This article synthesizes the report’s key findings and best practices, providing actionable insights for retail leaders eager to elevate their digital gift card offerings. From optimizing mobile experiences to fostering brand loyalty through personalization, we will explore how retailers can transform their gift card programs into significant drivers of engagement and revenue.

Mobile Optimization: A Critical Component

In an era where mobile commerce continues to grow, ensuring that gift card experiences are optimized for mobile devices is paramount. The report highlights that leading brands such as Amazon.com and JB Hi-Fi have achieved mobile usability scores exceeding 80%, far surpassing the 54% average for other retailers. This discrepancy underscores the need for businesses to prioritize mobile functionality.

Best Practices for Mobile Usability

Retailers should focus on seamlessly integrating gift cards into the shopping cart experience, allowing customers to purchase gift cards alongside merchandise in a single transaction. Supporting mobile payment options like Apple Pay and Google Pay can significantly enhance conversion rates and improve overall customer satisfaction. By removing barriers and simplifying the purchasing process, retailers can capture more sales through mobile platforms.

Discoverability and Awareness: Driving Consumer Engagement

One of the most significant challenges retailers face with gift cards is ensuring that consumers can easily find them. The report indicates that sectors such as travel and entertainment struggle with discoverability, scoring as low as 42%.

Strategies for Enhancing Visibility

To combat this issue, retailers should create a dedicated section for gift cards on their websites, ensuring visibility in main menus and search results. Additionally, incorporating gift cards into broader "Gifting" categories and promoting them during key occasions can help raise awareness. Regularly updating promotional content and utilizing high-traffic seasons can also drive consumer interest.

Crafting an Exceptional Recipient Experience

The experience of the gift card recipient is crucial for fostering brand loyalty. While digital gift card experiences have scored impressively at 89%, physical card delivery remains a weak point, with a score of just 51%.

Improving the Recipient Journey

Retailers can enhance the recipient experience by utilizing branded, aesthetically pleasing digital templates and offering premium packaging for physical cards. Personalization features, such as customized messages and sender names, can turn a simple gift card into a meaningful present. Furthermore, ensuring compatibility with digital wallets and easy balance checks can make the experience even more user-friendly.

Streamlining Checkout: Reducing Friction

Abandoned carts are a significant threat to revenue generation in the digital gift card market. The report emphasizes that a streamlined checkout process can dramatically improve conversion rates.

Effective Checkout Strategies

Retailers should support various payment methods, including buy-now-pay-later options, to cater to diverse consumer preferences. Minimizing the number of required form fields and implementing swift fraud checks can also prevent false declines, which drive customers away. Given that nearly half of consumers will abandon a purchase after a payment decline, optimizing the checkout process is critical.

Leveraging AI for Personalization and Content Scaling

Personalizing the gifting experience is more important than ever, and generative AI is emerging as a valuable tool for retailers looking to enhance their offerings.

Implementing AI Solutions

Retailers should consider adopting AI solutions for content generation and customer targeting. This includes crafting customizable gift card designs that reflect individual customer preferences and shopping behaviors. AI can also assist in creating occasion-specific content, making gift card options more appealing and relevant to consumers.

Year-Round Promotion: A Continuous Effort

Despite the potential of digital gift cards, only a small fraction of brands were actively promoting them during a peak sales window in December 2024.

Developing a Comprehensive Promotional Strategy

Retailers should establish a year-round promotional calendar, encompassing key events such as holidays, birthdays, and special occasions. Utilizing multiple channels—such as email campaigns, social media, and paid advertisements—can amplify promotional efforts. Co-branded campaigns and limited-time offers, such as “buy a $100 gift card, get $10 free,” can further stimulate interest and drive sales.

B2B Opportunities: Tapping into Corporate Sales

Bulk gift card purchases for corporate incentives and promotions represent a lucrative but often overlooked revenue stream. Many retailers fail to cater to B2B customers effectively.

Building B2B Capabilities

Creating a dedicated B2B portal for gift card purchases can facilitate bulk orders and make the process seamless for business clients. Retailers should provide clear information on digital and physical gift card options, along with streamlined checkout processes and account management tools for enterprise buyers. This focus on B2B capabilities can open up new revenue channels and solidify relationships with corporate clients.

Innovation in Gift Card Offerings

Top-performing retailers are not just meeting current consumer expectations; they are continuously innovating to keep pace with changing preferences and trends.

Embracing New Ideas

Retailers should explore innovative ways to enhance the gifting experience, such as integrating charitable options or creating unique delivery formats like printable coloring-page e-gifts. Personalization and experimentation with new channels—such as influencer partnerships and live social selling events—can also elevate the gifting journey, making it more engaging for consumers.

FAQ

What are the benefits of digital gift cards for retailers? Digital gift cards enhance customer engagement, increase sales revenue, and foster brand loyalty. They offer convenience for consumers and can be integrated into broader marketing strategies.

How can retailers improve the discoverability of their gift cards? Retailers can improve discoverability by creating dedicated gift card sections on their websites, ensuring visibility in menus, and promoting gift cards during key gifting occasions.

What role does mobile optimization play in gift card sales? Mobile optimization is crucial, as many consumers shop on their phones. A seamless mobile experience can significantly enhance conversion rates and customer satisfaction.

How can retailers personalize the gift card experience? Retailers can personalize gift cards by offering customizable designs and messages, as well as engaging in targeted marketing efforts based on customer preferences.

What strategies can retailers use to prevent abandoned carts? To reduce abandoned carts, retailers should streamline the checkout process by minimizing required fields, supporting multiple payment methods, and ensuring quick fraud checks.

As digital gift cards continue to evolve, retailers must remain agile, embracing best practices and innovative strategies to maximize their potential. By prioritizing mobile usability, discoverability, and personalization, brands can transform their gift card programs into vital components of their overall digital strategy, ultimately driving engagement and revenue growth year-round.