Globally, the FinTech industry is changing, and so are the gifting and shopping habits of consumers. While the year 2020 will be etched in people's minds for a long time to come, it has also been a year of disruptive and positive change. In the middle of chaos caused by the global pandemic, real innovation has emerged in the gift card industry, and PayNXT360 expects the innovation to continue to thrive in 2021 and beyond.
Gift card scheme for schools providing free school meals
Under the free school meals initiative of the UK government, schools provide eligible children with free meals. However, the spread of coronavirus meant that schools were closed overnight, and eligible children were not receiving the entitled meals.
Notably, gift card issuers innovated with their product offering and entered into a strategic partnership with the UK government. For instance, Tesco Bank, a subsidiary of Tesco plc, partnered with the UK government, allowing schools to offer eligible children with shopping vouchers worth £15 weekly. Notably, children can spend the gift card at supermarkets, allowing them to receive the benefit from the free meal scheme of the UK government.
While schools were allowed to provide free meals, Tesco Bank experienced an increase in its gift card sales. Notably, Tesco Bank revealed that the firm reached a record £0.5billion in Gift Card sales in the financial year ending February 2021. The free meal gift card program of Tesco Bank now supports 22,500 schools and has helped provide more than 62 million free school meals, as of April 2021, which were redeemed using the Tesco Gift Cards. Notably, children were able to redeem the gift cards at a range of shops, including Tesco, Morrisons, Asda, Sainsbury's, Waitrose, and M&S, among others.
Tesco allowing consumers to purchase customized digital gift cards from major third-party brands online
Apart from launching the gift cards for free meals initiative, Tesco Bank launched a new service in October 2020. The new service allowed consumers to purchase personalized digital gift cards from major third-party brands such as Google, Costa, Apple, Spotify, and Asos. Moreover, the service also allows consumers to personalize the gift card with a message and digital unwrapping. This service from Tesco Bank gives consumers a meaningful gifting experience at a time when many were not able to see their friends and family in person.
PayNXT360 expects the innovation in the gift card segment to continue in 2021 and beyond, as more and more consumers are buying physical and digital gift cards for their needs and wants.
Volunteer e-Gift card to help elderly, vulnerable, and self-isolating customers
The global pandemic outbreak meant that hundreds and thousands of consumers were forced to quarantine and self-isolate when infected with Covid-19. Moreover, the older people were afraid to step out, as they were the most vulnerable to Covid-19 infection. The dire situation led to another innovation in the gift card industry.
Notably, Tesco Bank launched a dedicated Volunteer e-Gift Card in May 2020. The innovative e-gift card initiative from Tesco Bank provided elderly, vulnerable, and self-isolating customers with a contact-free and safe way to allow others to pay for and collect their weekly shop. The launch of this innovative gift card was accelerated to meet growing consumer needs in response to the global pandemic.
Consumers who were unable to shop themselves could buy the Volunteer e-Gift Card, ranging from £5 to £150. The Volunteer e-Gift could be emailed directly to family, friends, or volunteers to purchase essential groceries in Tesco stores on their behalf. Notably, consumers could check the balance of their gift cards on the phone and keep track of their grocery spending done by a volunteer.
All of these innovative gift card programs launch by Tesco Bank has allowed the firm to experience an increase of 65% year-on-year through a combination of in-store and digital sales of gift cards.
Drive-up concierge service specifically for gift card shoppers
The global pandemic has fueled the popularity of contactless and curbside delivery services. Outback Steakhouse, a restaurant chain based in the US, initiated a drive-up concierge service specifically for gift card shoppers during the Christmas festive season in 2020. Moreover, the food service provider also allowed consumers to choose from a range of holiday options or even upload their favorite pictures to create a personalized gift card.
The launch of this innovative gift card program from the foodservice provider came during the festive shopping season and at a time when nearly one-third of the consumers indicated that they would shop fewer days because of the Covid-19 outbreak.
Apart from this, several employers also increasingly adopted the use of digital gift cards. With employees forced to work from their homes, employers made use of digital gift cards for remote team engagement. Therefore, employers globally were seen involved in sending digital gift cards to their employees for a delivery service or take-out restaurant.