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Innovation

Mobile gift cards expected to spike this holiday season

New research shows that both retail and gift card industries are shifting towards favoring mobile platforms.
Written by Rachel King, Contributor on

Is it time to give up plastic in favor of smartphones? In terms of gift cards, maybe that could work sooner than we think.

Giftly, which specializes on developing personalized digital gift cards to local businesses, posits that the $100 billion gift card industry could be in the midst of a major shift.

Basically, Giftly argues that thanks to the growing popularity of doing everything we possibly can on smartphones, that will drive the shift from plastic to smartphones as the industry tries to keep up with consumer demand and preferences. After all, people really did switch from paper gift certificates to plastic gift cards in the last 10 to 15 years, so why not this?

Citing a recent report from the National Retail Federation that argued at least half of all smartphone owners will use their mobile devices for completing holiday shopping this year, Giftly points out that seven in 10 tablet owners will research and shop using their device, with approximately 21.5 percent planning to use their devices to redeem coupons.

There are definitely some potential benefits to storing all gift cards on an app. For one, in the long term, it might be cheaper as there's just upfront costs of developing and deploying the app rather than producing plastic cards for years. There's obviously a green angle in there as well.

Furthermore, this could solve the problem for lost gift cards. Unless the gift card is registered online somehow, if it's lost, it's gone. But with digital gift cards, that data is saved to the cloud. So even if the phone is lost, the app (in theory) should have some security measurements in place to keep that information secure, and the user could manage cards using an online portal on a browser.

We can actually already see this in place today on a number of different apps from major retailers, especially Starbucks, which does a pretty good job of keeping multiple gift cards orderly and updated in real-time in one digital spot.

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