With the trend across the restaurant and grocery industries moving toward digital personalization, eCommerce gift cards may be more important than ever this holiday season, especially for brands for which consumer choice is central to their value prop. On Tuesday (Nov. 23), Kroger-owned meal kit and prepared meals delivery service Home Chef announced the launch of new digital gift cards in partnership with GiftNow, a gifting service from Loop Commerce, a Synchrony solution.
“We’re excited to elevate our digital gifting operations and offer customers more opportunities to personalize and send gift cards,” Eric Dean, senior director of marketing partnerships at Home Chef, said in a statement. “By partnering with GiftNow, we have transformed the gifting experience at HomeChef.com, making it more experiential, customizable and accessible for both gifters and recipients.”
The news comes as consumers are turning to online shopping more than ever before to meet their holiday gifting needs. According to data from PYMNTS’ report The 2021 Holiday Shopping Outlook, created in collaboration with Kount, 87% of consumers plan to shop online this holiday season, up 10 percentage points from last year. Additionally, about one in 25 consumers actually expect gift cards to be their most important payment method for shopping online during the holidays.
See also: Nearly 90% of US Consumers Plan Online Holiday Purchases in 2021 — 13% More Than in 2020
Restaurant brands have also been turning to gift cards to drive eCommerce sales. In another gift card-related announcement on Tuesday, Lake Forest, California-based quick service restaurant (QSR) Del Taco relaunched its holiday gift card bonus program, which rewards loyalty program members who purchase these cards with coupons for free meals. And on Monday (Nov. 22), Taco John’s, a Cheyenne, Wyoming-based quick-service chain, announced $5 bonus gift cards for every purchase of a $25 card. Dozens of other major restaurant brands are offering similar perks and deals for gift card purchases.
Additionally, if there is enough demand on the buyers’ side, gift cards can be a key way to drive adoption for brands that have a good product, but struggle to bring customers into the fold. Take, for instance, Thirstie, an alcoholic beverage-focused technology company, which on Tuesday announced the first branded gift cards for liquor companies in a move to drive adoption of online liquor shopping, a hugely underpenetrated space.
“The old adage, ‘if you build it, they will come,’ I think we all recognize isn’t the reality,” Devaraj Southworth, the company’s CEO and co-founder, told PYMNTS in an interview. “So we have highly compliant digital storefronts that Thirstie is powering, we have data and analytics capabilities of consumer shopping behaviors to feed back to brand leadership, but to actually have a strong on-ramp to increase digital consumption of a very traditional industry, that’s pretty compelling.”
Related news: Liquor Brands Use Gift Cards to Drive Online Sales, Build Brand Loyalty
Home Chef, for its part, has been seeing sales rise dramatically in the years since it was acquired by Kroger in 2018. Last month, the company announced that it had exceeded $1 billion in annual sales. At the time of its acquisition, Home Chef had reported $250 million in revenue, indicating that the brand has increased its sales more than fourfold in its time as a Kroger subsidiary. Still, meal subscriptions overall continue to account for only a small share of consumers’ food spending.
Plus, supply chain issues are making consumers especially interested in purchasing gift cards this holiday season. In an interview with PYMNTS, Brett Narlinger, head of global commerce at Blackhawk Network, said Blackhawk has already started to see a dramatic increase in gift card purchases for the holidays this year, in large part because of bottlenecks that have consumers worried about getting items in time.
“That entire process is going to be a drag, and it’s not going to be fun for consumers,” said Narlinger. “And that’s a really good reason that we’re seeing so many with this intent toward gift cards, so they have a choice.”
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