Gift cards are huge. Walk into any major retail store in any country where the organized retail sector is advanced, and you will find a very prominent gift card stand staring alluringly at you from the most premium store space. The reason for that is simple: They account for up to 5% of total sales for some brands, and in the United States alone, consumers will buy about $130bn worth of gift cards this year. That is about 3% of the entire retail market in the US, and that is a significant chunk.
There’s a gift card for everything. You can find Wallmart Gift cards for groceries, Uber gift cards for rides, iTunes gift cards for music, Amazon gift cards for online shopping, etc. Anything. If people buy a product or service for themselves, it means that they sometimes need to buy it for others, either as a gift from an individual to another, or as a reward from a business to one or many individuals. It makes sense. You can’t possibly know the ideal gift to get an expecting mother better than the mother herself, so the best gift to share with her is a gift card that she can use to shop at her favorite baby store. That is why gift cards have consistently been the most requested/desired gift in the US and many other markets (it’s not a cultural thing), and people buy more and more every year.
The demand for gift cards is so high that they’ve now gone digital. Senders can now send electronic versions to others when they are not able to present it to them physically because of distance or other reasons. Businesses that need to reward thousands of customers, employees or partners especially value this because they don’t incur costs and time to purchase, store and deliver rewards. For the foreseeable future, gift cards will remain a dominant enabler of sales for several brands, and a life-saver for gift-givers.
Africa has over a billion people, and they are projected to consume $1 trillion in value by 2020. That’s a lot of spending, and that’s why shopping malls are finally springing up across major cities on the continent. The middle class is expanding with significant purchasing power, and they demand comfortable and sophisticated shopping experiences, just like the rest of the world. In Nigeria, major international brands like Game, Shoprite and Spar are taking advantage of this growth and establishing their brands all over the country. One feature is conspicuously missing on a large scale, however: Gift Cards.
Gift cards have the potential to be even more valuable in Africa than anywhere else. In the US and Europe, the alternative to gift cards will be to purchase a physical gift and find a way to transport the gift to your recipient, either personally or through a logistics provider. In Nigeria and many major markets in Africa, the problem of logistics is a major one. This makes gift cards, especially the digital versions, very valuable to individual and corporate gift-givers.
Gift card management is heavily technology-enabled, and it is most times outside of the core capabilities of retailers. That’s where we come in at SureBids. We are enabling merchants in Africa to retail their own gift cards in-store for the first time, and we also sell gift cards on their behalf via several channels to individuals and businesses that are eager to access them. We have spent the past two years developing a system that is hyper-customized to the African retail merchant and processes, and soon, Africans will also be able to pick up a wide assortment of gift cards for their loved ones at a store counter or from a gift card mall, or send a digital version from our websites like www.suregifts.com.ng.
We’re excited about the potential for this product in Africa, and if the incredible popularity virtually everywhere else in the world is any signal of its utility and value, it will be incredibly popular in Africa too. If you’ll like to join us in some way to enable African retail without establishing buildings and inventory, get in touch with me at firstname.lastname@example.org.