The Gift Of The Digital Age

What can we learn about the shopping habits of millennials from the growth in popularity of digital gift cards?


This weekend, my 20-year-old little brother emailed me his Christmas list. I was confused. He didn’t want any gifts. He only wanted gift cards, preferably digital ones he could use on his smartphone.

I hadn’t thought much of the purchase until Cyber Monday when colleague Marc Rapport sent me survey data released by InComm showing just how popular these digital cards are with the younger generations. Highlights include:

  • 90% of respondents from 18-25 said they were more interested in buying digital gift cards than two years ago.
  • 78% of respondents from 18-25 showed interest storing cards on their mobile phones. 16% of those over 65 showed interest.
  • 71% of respondents intend to purchase at least one gift card from an online website or mobile website/app this holiday season, while 74% agree that they are likely to purchase at least one digital gift card.
  • 85% of respondents between 18 and 25 agree that they’re likely to purchase at least one digital gift card this holiday season.
  • 77% of respondents between 18 and 25 prefer to have a digital gift card scanned from their phone rather than carry an email printout.
  • 55% of total respondents, 75% of those between 18 and 25, agree that they’re interested in storing digital gift cards on their phone for self use.
  • In terms of why they might give the gift of digital gift cards, 61% of respondents cited instant delivery, while 21% said it was a “cool gift to give.”

According to CEB Tower Group, plastic gift cards will account for 20% of the holiday spend this year. Although this data is holiday-spending specific, it might also point to a larger trend in millennial spending habits.

The data supports what we’ve written on in the past. The mobile phone is an indispensible device, a medium on which any credit union with the goal to lower the average age of its membership must have a presence.

Also, the data hints at the spending habits of the next generation, a generation that is often portrayed as unwilling to spend money because of shyness after the Great Recession, huge chunks of student loan debt, or both. However, this data potentially indicates the opposite. According to the National Retail Federation, more than 90% of Americans celebrate Christmas, Hanukkah, or Kwanza, and in 2014 the NRF projects Americans to spend more than $600 billion on Christmas alone.

Shopping during the holiday season is for many a necessary expense in the “spirit of the holidays.” But other necessary expenses for many adults include auto loans, credit cards, and mortgage payments — all essential products. If this frugal generation sees the need to spend hundreds of dollars during the holiday season — $730 per celebrant in 2013 — why would they not eventually do the same for big-ticket items?

This not a “Lost Generation.” It is “Generation Wait.”

The data also indicates the channel through which this generation prefers to spend: mobile devices. Sure, shopping on a four-inch phone screen is more difficult than a 13-inch laptop, but it’s also more convenient. And convenience is the name of the game. It's with holiday cheer that we see credit unions such as America First (6.3B, Ogden, UT) offer loan applications on their mobile apps. After all, if the season illuminates anything, it’s what’s popular to the younger generations.

And right now, that’s smartphones.  


Dec. 3, 2014



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