The pandemic has driven consumer demand for contactless and digital
purchasing and payments and transformed what they are purchasing. These
changes directly impact
reward and incentive programs, as preferences have been significantly
A reliable indicator for overall retail trends, including which rewards will be most powerful, is gift-card
sales. Blackhawk Network research revealed sweeping shifts in the retail categories consumers favor, and the
findings align with the 2020 Gross Domestic Product rate. These metrics can provide businesses with
invaluable economic forecasting insights they can apply to their reward-program strategies.
Following are top retail trends that are impacting rewards-program strategy:
New Reward Preferences
When COVID‐19 hit last year, people drastically changed their
shopping habits on a dime. The most popular retail categories during the
pandemic have been those that offer products
related to people working from home, spending more time online, focusing
on home improvement and
eating at home: think yoga pants, online streaming, nesting and ordering
in. Here is a breakdown of
how different types of retail service and product categories have fared:
- Most recreation and travel came to a grinding halt around the world. Theme parks and
attractions shut down, flights were grounded or empty and hotels had loads of vacancies.
However, recreational sporting purchases increased considerably. People couldn’t travel or go
to the gym; instead, they were more active in their daily lives, worked out at home and
partook in outdoor activities, with these types of products netting double‐digit sales growth.
- When people stopped eating out, many restaurants suffered colossal
decreases in sales. Consumers turned to fast-casual and quick-serve
dining outlets that offered drive-through and takeout options.
Food-delivery services and apps
surged in popularity, with many recording triple‐digit year‐over‐year
growth as people
increasingly preferred to order in.
- Clothing retailers experienced pandemic impacts differently, depending on the types of garments
they sold. As more people shifted to work‐from‐home arrangements, "athleisure" wear and
comfortable-clothing sales soared. Conversely, with fewer people in the office, luxury and formal
clothing was left on the racks.
- People invested heavily in their home lives. Retailers that offered home improvement products,
household necessities and craft supplies saw strong sales as people took on DIY projects and
picked up new hobbies. Additionally, at‐home grocery delivery services skyrocketed in
popularity as people increasingly preferred to skip a trip to the store and have food brought
straight to their doors.
- At‐home entertainment options flourished. Online gaming and streaming services became top
go‐to sources of fun and amusement; not surprisingly, movie theater and other offline
entertainment options steeply declined in popularity.
First-quarter 2021 consumer trends suggest that overall spending is
slowly increasing among some of the prevalent pre‐pandemic categories
hit hardest, particularly as people show a rejuvenated interest in
traveling and in‐person entertainment. But the data also confirms that
shoppers now have a lasting appetite
for their pandemic favorites, including casual clothing; streaming
services; online gaming,
and food and grocery delivery. Successful reward programs will feature a
mix of these options.
Other Gift-Card Uses
Shoppers have turned to gift cards as contact‐free ways to make
purchases. Blackhawk Network's research revealed that 34 percent of
respondents had purchased a physical gift card or eGift in the past year
personal use and 46 percent reported interest in digital gift cards for
making purchases online. Among digital
wallet users across the world, 60 percent have used digital gift cards
as payment tools in the last 12 months.
Gift cards were one of the most resilient consumer products of 2020 and their versatility positions them
for similar success in 2021 and beyond. The ability to easily send and use digital gift cards through
contactless methods is a powerful motivator for many recipients — and also helps streamline the costs
of managing a reward program since there’s no need to print or mail physical cards.
The study found that many consumers (39 percent) are more motivated
now than they were before the pandemic to seek out
deals, rewards and promotions. But it’s not enough to offer rewards;
they need to be the right rewards
that cater to their current tastes and preferences. Smart rewards
program managers should consider current retail trends to ensure their
programs are optimized for success.
Scott Lapp is director, Incentives Marketing, at Blackhawk Network.