Consumers spend more than $100 billion annually on gift cards in the United States.
A simple 5% increase in customer retention can increase a company’s profitability by a whopping 75%.
In the aftermath of the COVID era that dramatically altered consumer behavior, gift, membership and loyalty cards are set to become more crucial in building and maintaining brand equity both online and in-store retail environments. Moreover, as the popularity of ethical and sustainable brands rise, consumers are becoming more demanding of companies in terms of transparency. As a result, it’s imperative that brands carefully navigate this phase.
Lisa Taylor, vice president of sales and marketing, and Julie Brannen, director of regional sales & sustainable solutions, at Monadnock Paper Mills offer insights on trends in the exploding loyalty, gift and membership market, and how rethinking your loyalty and gift card program strategies can boost retention and your environmental profile.
Loyalty, Gift and Membership Market Trends
The loyalty, gift and membership market is witnessing significant evolution, driven by changing consumer behaviors and expectations. Although there’s been a noticeable shift toward digital platforms, physical gift cards continue to hold substantial value in creating a tangible brand connection. Increasingly, the focus is on:
Ethical and Sustainable Practices
As consumers align their spending with their values, these are becoming key differentiators.
Particularly in the realm of fiber-based alternatives, the movement toward reducing reliance on traditional plastics has catalyzed innovation in “unplastic” or plastic replacement materials. Transitioning to eco-friendly materials, like fiber-based cards, not only reduces plastic waste but also resonates with the growing consumer base that prioritizes sustainability.
This proactive shift is driven by a growing consumer demand for more environmentally friendly options and a broader industry commitment to sustainability. As companies explore alternatives, there’s been a notable increase in the adoption of fiber-based materials for products traditionally dominated by plastics, such as gift cards.
These advancements reflect a constructive approach toward finding sustainable solutions that align with environmental objectives, without disparaging the role plastics have played. By focusing on the development of new, eco-friendly materials, the industry can provide consumers with products that are not only sustainable, but also innovative and aligned with modern values. This positive evolution toward “unplastic” alternatives is a testament to the industry’s adaptability and commitment to environmental stewardship.
Transparency and Authenticity
Transparency and authenticity are at an all-time high, which is influencing brands to rethink their strategies in loyalty and gift card programs.
FSC Certification stands as a testament to a brand’s commitment to environmental stewardship. It ensures that products are sourced from responsibly managed forests that provide environmental, social and economic benefits.
For gift cards, this certification maintains transparency and authenticity throughout the production chain, from raw material sourcing to the end consumer. It reassures customers about the brand’s ethical practices, enhancing brand equity and trust in an era when consumers demand greater accountability from companies.
Value of Communicating Sustainability
Incorporating sustainability into gift card and loyalty programs is not just about internal changes. It’s crucial to communicate these efforts effectively to the consumers as well. Transparency in sustainable practices fosters trust and loyalty, turning customers into brand advocates.
Highlighting the use of sustainable materials, such as the Envi Gift Card, and the brand’s commitment to environmental responsibility can significantly enhance the perceived value of the gift card program. It’s an opportunity to educate consumers and engage them in the brand’s sustainability journey, making every gift card purchase a conscious contribution to a more sustainable planet.
Sustainability Practices Meet Consumer Demand
In today’s market, sustainability is not just an option but a necessity. Brands must integrate sustainable practices into their loyalty and gift card programs to meet consumer expectations and contribute to environmental conservation. FSC Certification is crucial for maintaining credibility and transparency in sustainable practices.
The movement toward “unplastic” solutions, particularly with the introduction of fiber-based alternatives for gift cards, represents a significant stride in material innovation. By offering more environmentally friendly choices to consumers, this transition supports global sustainability goals. Without compromising on quality or functionality, this aligns with the growing demand for sustainable products.
Embracing these principles is essential for brands looking to maintain relevance and build lasting relationships with their customers in an increasingly environmentally conscious market.
If you’re interested in learning more, attend the presentation Reduce. Reuse. Rethink Gift Cards. at the ICMA EXPO on May 14 at 11:15 am. Find the full agenda at ICMA.com.
More Insights on Card Trends
For more than 30 years, ICMA has represented the interests of the card manufacturing industry—which includes manufacturers, personalizers, issuers and suppliers—as its leading global association.
Throughout the year, ICMA members have the opportunity to share insights and knowledge by giving presentations during ICMA webcasts and events. The association’s main event is its annual Card Manufacturing & Personalization EXPO. The 2024 EXPO will take place from May 13-16 in Orlando, Florida.
ICMA offers regular educational opportunities, including ACE-Manufacturing, ACE-Personalization and ACE-Advanced Technologies training and exams at the ICMA EXPO. ICMA also offers ACE-Commercial training, which provides sales, marketing, customer service and other key personnel at ICMA member companies with the opportunity to learn the fundamentals of card manufacturing.
Learn more about the benefits of ICMA membership.