Overall spending on gifts remained stable in Canada in 2020, despite economic slowdown and reduced celebrations due to lockdowns and people staying away from gatherings. The overall spending on gifts recorded a decline in 2020, with a shift towards gift cards. This has resulted in increased penetration for gift card. Gift card growth over the next 4 quarters in 2021 is expected to improve significantly with improved business and consumer sentiment.
Despite a challenging near-term outlook, the gift card industry in Canada is expected to experience steady growth over the medium term, starting Q2 2021. This will be driven by consumer confidence and retail spending in the country along with increased adoption of corporate incentive and loyalty cards.
In the wake of COVID-19, gift card adoption due to additional use cases. For instance, the Province of Prince Edward Island has partnered with Sobeys to offer gift cards to Islanders who have been laid off due to the pandemic. The Employee Gift Card Program will offer approximately US$ 78.11 (C$100) Sobeys gift card to individuals who are undergoing economic hardships.
According to PayNXT360’s Q4 2020 Global Consumer Gift Card Survey, over 43% of Canadians prefer gifting / receiving gift cards. This is significantly higher than previous year, when gift card was seen as a last minute gifting option. Gift card adoption in sectors such as travel and restaurants sector is expected to increase as companies leverage discounted gift cards to attract consumers.
Interestingly, adoption of digital gift cards and digital channel recorded strong growth in 2020, with Canadian customers reflecting a fundamental shift in behaviour. This trend is expected to continue over the short to medium term.
Moreover, technology is also transforming the way people use gift cards in Canada. In particular, millennials are increasingly purchasing digital gift cards (such as Starbucks) and loading them onto the corresponding retailer app. Increasing number of Canadians are showing a preference for mobile apps that allow for reloading gift cards on their devices compared to carrying around traditional plastic gift cards.
The gift card market in Canada is seeing entrance of international players. Miconex, a Scottish based FinTech firm announced plans expand its footprint to offer gift card programmes in Canada, the US and Ireland, in October 2020. Miconex is engaged with Food Island Partnership to provide Food Island gift card programme for Prince Edward Island. The Food Island Gift Card allows visitors and locals to spend on the Island which could boost tourism.
According to PayNXT360’s Q4 2020 Global Gift Card Survey, gift card industry in Canada is expected to grow by 9.5% on annual basis to reach US$ 6312.2 million in 2021. Despite near-term challenges in 2021, medium to long term growth story of gift cards in Canada remains strong. The gift card industry in Canada is expected to grow steadily in H1 2021 and record a strong growth in H2 2021. The growth momentum is expected to continue to grow over the forecast period, recording a CAGR of 7.3% during 2021-2025. The gift card market in the country will increase from US$ 5764.6 million in 2020 to reach US$ 8368.4 million by 2025.
Scope
Total Spend on Gifts in Canada
• By Consumer Segment (Retail and Corporate)
• By Product Categories (13 Segments)
• By Retail Sectors (7 Segments)
Gift Card Market Size by KPIs across Consumer Segments in Canada
• Gross Load Value
• Transaction Value
• Unused Value
• Average Value Per Transaction
• Transaction Volume
• Average Value of Card Purchased
• Number of Cards
Gift Card Market Size by Consumer Segment in Canada
• Retail Consumer
• Corporate Consumer (Small Scale, Mid-Tier, Large Enterprise)
Digital Gift Card Market Size in Canada
• By Retail Consumer
• By Retail Purchase Occasion
• By Corporate Consumer
• By Corporate Purchase Occasion
• By Company Size
Gift Card Market Size by Retail Consumer in Canada
• By Functional Attribute
• By Occasion
1. Festivals & Special Celebration Days
2. Milestone Celebration
3. Self-Use
4. Other
• Value by Purchase Channel
Closed Loop Gift Card Market Share by Key Retailers. Key Retailers Covered Include:
1. George Weston Ltd
2. Wal-Mart Stores Inc
3. Empire Co Ltd
4. Costco Wholesale Corp
5. Metro AG
6. Canadian Tire Corp Ltd
7. Home Depot Inc, The
8. Liquor Control Board of Ontario
9. Hudson's Bay Co
10. Home Hardware Stores Ltd
11. Best Buy Co Inc
12. Apple Inc
For In-depth Understanding @ https://bit.ly/3pgxQnz
