Inflation seems to be an unwelcome guest at this year's holiday festivities, and consumers are anticipating a costly holiday season. Inflation is impacting consumer spending, prompting many to re-evaluate their shopping strategies to maintain control over their budgets.
In addition to inflation, the rising unemployment rate presents another challenge for consumers this holiday season. The combination of rising prices coupled with economic uncertainty is reshaping not only spending behaviors but also overall consumer confidence during this holiday shopping period.
The emergence and impact of gift cards and loyalty programs
Two tools are proving invaluable this holiday season — gift cards and loyalty programs. Both physical and digital gift cards offer a convenient, flexible, and popular gifting option.
Loyalty programs are also gaining traction as consumers seek ways to shop strategically to maximize their spending. Loyalty programs greatly influence where consumers shop during the holidays, as savvy customers use them to bolster their spending. Consumers can earn points that can be redeemed for discounts or exclusive offers. Major retailers continue to drive engagement with their loyalty programs to encourage consumers to participate in sales and promotions.
How merchants can capitalize
Merchants have a unique opportunity to capitalize on these trends. By expanding their gift card offerings and enhancing their loyalty programs, businesses can influence consumer spending behavior and drive additional sales. Merchants can consider offering customizable gift cards that allow customers to personalize them with messages or designs. Merchants are advised to establish early holiday promotions and market them through appropriate channels to encourage consumers to purchase gift cards for the financial benefits, driving consumer loyalty.
To learn more, listen to the recent PaymentsJournal.com podcast Merging Loyalty and Gift Card Programs for an Optimal Holiday Shopping Season. The discussion features Tom Niedbalski, VP Global Sales and Partnerships at Fiserv.
