The term “Millennial” gets thrown around a lot – and there’s often no clear definition where this new, young generation of people begins and ends. However, there is consensus that most millennials were born from the late 1980s to the late 1990s, with the early 2000s as the latest possible “Millennial” birth years.
To make things a bit more simple, we’ll use the US Census Bureau’s definition of a millennial – a person born between 1982 and the year 2000, meaning that the oldest millennials are around 35 years old, and the youngest are not even 17.
Millennials are a highly coveted market in the world of retail – currently, they occupy a vast majority of highly-valued 18-24 and 25-34 demographic ranges. These demographic ranges have historically been seen as highly valuable for consumer markets, as people in these age ranges tend to have a good amount of disposable income, and are willing to spend more at retail establishments.
Because millennials are such a valuable market segment in modern retail, it’s important to understand their buying habits – and especially how millennials are interacting with the modern gift card market.
To help you better understand the attitude of millennials to retail and gift cards, we’ve put together an article that will go deeply into the details about millennial spending habits, gift card habits, and preferences. Read on, and learn with us.
Millennials Value Gift Cards More Than Any Other Market Segment
This, perhaps, is the most surprising statistic we’ve come across during our research. Overwhelmingly, millennials prefer gift cards over any other form of gift. A 2014 holiday survey by Deloitte showed that 37% of millennials would prefer to receive a gift card over any other form of holiday gift. This is a huge change from times past, and indicates the changing attitudes of millennials towards money and objects.
Interestingly, the second-most desired gift for millennials is cold, hard cash – this may shock some older people, for whom the idea of simply giving somebody, money for a Christmas or holiday present may seem totally impolite and careless.
Millennials seem to place a lower value on the actual selection of a present, and a higher value on the cost of a present. A gift card or cash gift eliminates the need for a gift to be selected, presenting millennials with more flexibility, and a clear value for a gift, which makes the entire gift giving process simpler, more flexible, and easier – all traits that millennials highly value in their shopping experiences.
Here are a few more factors that may contribute to the popularity of gift cards among millennials:
Gift cards are convenient and fast to buy – Gift cards save a lot of time – that’s a fact. You don’t have to spend a ton of time picking out the perfect gift for someone, and you don’t have to worry about other factors like providing a return receipt.
According to a Blackhawk Network study, 89% of millennials like receiving gift cards, citing factors such as not having to worry about dealing with a return, and a simple, easy redemption process through which they can buy whatever they want.
Gift cards are practical – For all the negative traits that have sometimes been ascribed to millennials, they are eminently practical. Millennials have grown up during one of the worst economic recessions in modern American history – and they don’t like waste.
Gift cards provide millennials with a way to treat themselves, while still carefully controlling their spending. Instead of just receiving a large gift they can spend their received gift cards on products of their choice, over a longer period of time. This increases their satisfaction, and allows them more control over their buying habits.
Gift cards can be bought online – Gift cards can be quickly and easily purchased online from most retailers – and millennials love online shopping. According to ComScore and UPS, millennials do over 54% of their shopping online – up to 5 percentage points higher than older demographics.
New digital gift cards that can be purchased and delivered online, therefore, provide millennials with an even easier way to get the gift cards they need – whether for themselves, or for others.
Millennials Buy Gift Cards For Themselves
Millennials don’t just love receiving gift cards from others – approximately 40% of millennials have bought a gift card for themselves in the last year, according to a new data by Mercator Advisory Group. This is up from about 20% in 2015 – a huge difference, indeed.
The primary reason behind this is advancing retail technology. Many retailers have introduced smartphone applications that include omnichannel gift cards – purchasers of gift cards can attach their gift card balances directly to a retail app, and use it both online and in-person as a payment method.
Millennials are much more quick to adopt this kind of technology. Starbucks, for example, is a huge leader in this industry. Their Starbucks smartphone app integrates a loyalty program, reloadable gift card balances, and a convenient, QR-code-based gift card redemption system into an easy-to-use package, encouraging millennials to continue buying reloadable gift cards to receive further rewards. In 2014, it was estimated that over 30% of all Starbucks transactions were done with gift cards – and that number continues to rise.
So, in a way, many of these gift cards aren’t being used as gift cards at all, but specialized currency that’s only redeemable at one store, especially given the great rewards programs that many large modern retailers like Target and Starbucks are offering on gift card purchases.
This should certainly catch the attention of any retailer who has not implemented a good gift card redemption program. Millennials are very interested in saving money and getting great deals on their products, so retailers who integrate smart gift card solutions with their loyalty programs have a huge advantage when it comes to the loyalty of the millennial consumer.
Millennials Are Interested In Experiences More Than Physical Objects
This is another interesting aspect of the millennial mindset. Baby boomer and many older adults put a premium on physical possessions, luxury items, and other tangible goods, and prefer to have these things over more immaterial and temporary experiences.
However, millennials have reversed this trend – industry research has shown that most millennials prefer “experience-based” spending, and are less likely to desire large collections of expensive objects.
For example, millennials are likely to value something such as a trip to a music festival more highly than a nicer car, or an expensive watch. Approximately 74% of millennials agreed, in an Eventbrite study, that they preferred experiences over physical objects.
The economy has seen a corresponding growth in areas such as live entertainment, sporting events, themed athletic events like “color runs”, and other experience-based, temporary events.
This rise in experiential desire can, perhaps, be traced to social media – millennials are heavy users of social media websites such as Facebook, Twitter, and Instagram, and a desire to have great, fun experiences that can be shared with others could certainly be a large contributing factor to the “experience economy” that seems to be growing among millennials.
This shift in spending habits is sure to force gift card companies to adapt – and is, perhaps, part of the reason that eGift cards, which can be spent almost anywhere, are becoming more popular among millennials.
Millennials Are Choosing More Digital Gift Cards
Digital gift cards are a growing market, and millennials value them more than any other market segment. A report by Stored Value Solutions in 2015 revealed that 40 percent of gift card shoppers aged 18-35 – millennials – had purchased and used a digital gift card.
This was in stark contrast to the results of the rest of the survey, in which 65% of all consumers revealed that they had never bought, nor received a digital gift card.
The reasoning behind this trend is multifaceted. Some millennials said in the study that much of their gift card buying behavior was driven by physical presence – if they were giving someone a gift in person, they were more likely to buy a physical gift card. Conversely, when they were giving a gift to somebody far away, they were far more likely to purchase a digital gift card.
The tech-savviness of millennials is also a contributing factor. Unlike their parents, millennials are digital natives, and they aren’t afraid to have valuable gift cards sent to them over email, because they know that they’ll be able to access it quickly and easily.
Interestingly, consumers who purchased digital gift cards were more likely to choose restaurants than retail stores, perhaps feeding into the “experience-based” economy that millennials prefer, as we mentioned above.
Digital gift cards also have another advantage over physical gift cards – it’s harder to lose them. This was also cited as a reason that millennials preferred digital gift cards.
According to Bankrate.com, millennials were about twice as likely as older consumers to have lost a gift card before they could spend their full balance. Losing a gift card after getting it certainly a raw deal for a consumer.
However, consumers losing or misplacing gift cards before being able to spend them is a huge problem for retailers as well, as gift cards are considered a liability for deferred revenue while accounting, and the CARD act passed in 2009 has set a minimum expiration date of five years on gift cards – so a retailer must hold on to that liability for at least 5 years if a gift card is lost.
Because digital gift cards can always be accessed from any computer or smartphone, or even have their balances applied to a store account, millennials don’t have to worry about losing gift cards, or having to keep track of multiple gift cards for different stores.
This also ensures that millennials don’t have to worry about forgetting a gift card when going to a retailer, as their smartphones can be used to redeem their gift card balances.
Got Gift Cards You Don’t Want? Sell Them At EJ Gift Cards!
Whether you’re a millennial, baby boomer, gen x-er, or any generation in between, you’ve probably gotten some gift cards in the past that you can’t use. Whether you prefer not to shop at a particular retailer, don’t patronize a certain restaurant, or just need cash instead of a gift card, it can be a great idea to sell those gift cards so that others can use them – and you can profit.
If you’re looking to sell your gift cards online, look no further than EJ Gift Cards. We’re the best direct gift card buyer on the market, and we can offer top dollar for both digital and physical gift cards.
We accept hundreds of different gift cards over dozens of industries, so no matter what gift card you have, you’ll be able to sell it for cold hard cash.
Our simple, step-by-step process makes it easy for you to sell your gift cards, and we guarantee hassle free payment through PayPal – no waiting around for a bank transfer, or for a check by mail. As soon as we get the details of your gift card and validate them, you’ll be paid.
Finally, our helpful, friendly customer support team can help you if you have any questions or concerns about the gift card buying experience, so you’ll always have someone to turn to if you’re confused about our process, rates, or terms and conditions.
So don’t let your unwanted gift cards go to waste. Sell them at EJ Gift Cards today – and enjoy an easy, hassle-free gift card selling experience with the best gift card buyer in the business.