Articles
Unleashing The Power Of Gift Cards
December 31, 2009
•White Paper: Unleashing The Power Of Gift Cards
By UTC RETAIL
Given the challenging retail climate, most product sectors have been happy to post even single digit growth over the past year. In fact, research shows overall retail sales grew at less than 4% in 2007. However, the one bright spot in retail spending has been the stored value gift card market. According to recent data from TowerGroup, the gift card market grew almost 17% from $83 billion in 2006 to $97 billion through the end of 2007.
That total gift card market includes branded cards from American Express, Discover, MasterCard and Visa, but TowerGroup found that core retailers offering their own branded cards represented the largest overall segment. The Needham, MA-based research and advisory services firm, focused on the financial services industry, reported that retail-sponsored, closed-loop cards generated $34 billion in stored value in 2007, up from $29 billion in 2006.
With technology now making it possible for the smaller retailers to offer their customers the same gift card programs they have become used to from the larger chains, there are substantial opportunities for SMBs to build loyalty among their current customer base. In addition, for smaller stores with limited marketing budgets, gift cards provide a great marketing platform to introduce their brand to new customers.
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