How Retail Trends Are Shaping Gift and Reward Strategies

Gift cards, food and grocery deliveries and work-from-home gifts are popular with consumers now.


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 affected by the pandemic.

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 dining out, 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 for 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.

Better Rewards

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.