It is set to break an all-time record in Q4.
The US survey was part of Rise.ai’s Q3 global digital gift card survey, which analyzed 1,952 stores in 62 countries in North and South America, Europe, Asia, Africa, and Australia. Initial income from digital gift cards in Q3/2020 jumped globally by 149% compared to Q3/2019, while the number of digital gift cards sold rose by 111% compared to Q3/2019.
Continuing the strong momentum since the outbreak of the Covid-19 crisis in the US, the use of digital gift cards continues to break records, with the latest in the third quarter of 2020, according to a new survey by Rise.ai, which offers AI-driven customer re-engagement solutions.
“The numbers and the trends indicate that this year’s holiday season and the fourth quarter are going to be the strongest quarter for digital gift cards in history. The market is on track to set an all-time record with triple-digit growth in the fourth quarter, ’’ says Yair Miron, CEO and founder of Rise.ai.
The survey covered 1,182 US stores that use Rise.ai’s re-engagement solution. Rise.ai analyzed digital gift card sales in the first 9 months of 2019 and over the same period in 2020. The number of digital gift cards sold and the initial income from digital gift cards were calculated.
According to the data, initial income from digital gift cards in the sampled US stores jumped 165% in the third quarter of 2020 compared to the same quarter in 2019. Initial income rose by 228% in July 2020, 148% in August and 124% in September, in comparison to the corresponding month last year.
The number of digital gift cards sold in the sampled US stores in the third quarter of 2020 rose by 114% compared to the year before. The actual number of digital gift cards rose by 96% in July 2020, 124% in August and 112% in September compared to the same month last year.
The growing trend of cashless payments has given a huge boost to digital gift cards. This has been further underscored in an era of social distancing by the transition from brick and mortar stores to online retail establishments. For the stores, gift cards represented a means of maintaining business and obtaining cheap credit lines during the ongoing crisis. These trends began in the second quarter of 2020 due to the Covid-19 pandemic, and have further intensified since then.
Rise.ai’s Q3 survey found a desire to buy local and support the local economy; donate directly to stores that in turn support needy in the community and a sharp increase of corporations giving digital gift cards to their employees to further help small and medium-sized businesses.
‘’We have strong reasons to expect that this year’s holiday season in particular and the fourth quarter, in general, are going to be the strongest quarter in history for digital gift cards,’’ added Rise.ai’s Miron. ‘Q3 is usually the weakest quarter in the year for the whole e-commerce sector, including digital gift cards. This year it was not only strong but registered a 165% growth rate in initial income compared to last year. Second, the first weeks of the fourth quarter are much stronger than usual. Third, we see a clear correlation between the number of Covid-19 cases and the demand for digital gift cards. With Covid-19 expected to be around during the fourth quarter, projections are for a further boost in the demand for digital gift cards.’’
In 2019 Rise.ai helped merchants generate $150 million in revenue and handled more than $1 billion in store credit. The startup was established in 2015 and already serves more than 3,500 digital stores, with over 80% of them in North America. Rise.ai is active in more than 50 countries around the world.
Rise.ai was selected this summer by both Facebook and Google to help small and medium businesses sell more through digital gift cards on Google My Business, Facebook and Instagram.
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