As Inflation Rises, Restaurants Look to Gift Cards to Attract Newly Cost-Conscious Consumers
3 Min Read By Tom Niedbalski
Recent economic data forecasts a stormy season ahead for restaurant owners. Inflation in the U.S. is holding around eight percent, which is causing the cost of eating out to rise alongside price increases for everyday items such as gas and groceries. As business owners know well, when inflation rises consumers often cut discretionary spending. For restaurants, this presents a challenge: How can you keep attracting customers to your restaurant when consumer purse strings tighten?
As consumers reevaluate their spending habits, one lever many restaurants are turning to is the gift card. Whether plastic or digital, gift cards can be connected to promotional offers, discounts and incentives. These add-ons give consumers the ability to stretch their spending power when money gets tight.
According to the Q2 2022 Gift Card Gauge from Fiserv, 37 percent of consumers say they have already taken advantage of a gift card promotion in 2022, and 58 percent say that gift card promotions will motivate them to buy more gift cards during this inflationary period. Additionally, while 51 percent of consumers say they are significantly reducing their impulse shopping and 46 percent are purchasing only what is necessary due to inflation, gift cards remain resilient, with only 23 percent of consumers purchasing fewer gift cards.
With consumers increasingly viewing gift cards as a way to stretch their purchasing power, savvy restaurant owners are marketing new gift card offers to their customer base. Restaurants wanting to invest in their gift card programs can consider adopting these strategies.
Leverage Calendar Events
While it is typical for people to give gift cards during the holiday season and for birthdays, regular calendar events such as graduations and back to school are also great times of the year to plan for gift card promotions. Many restaurants even tie gift card promotions in with special dates or themes associated with their own restaurant – such as National Donut Day on June 2 or National Ice Cream Day on July 16. Doing so will help keep gift cards in customers’ wallets year round, instead of limiting sales to the holiday season.
Consumers Love a Deal
Because gift cards are a popular way for consumers to stretch their spending power, highlighting financial promotions associated with buying a gift card is a smart marketing tactic. According to the Fiserv survey, consumers prefer gift card promotions that offer bonuses (for example, buy a $50 gift card and get a $10 bonus gift card). The best thing about gift card bonuses is that they not only provide a good deal for the customer, they also can be tailored to drive repeat business for the restaurant. For instance, holiday bonus cards can be set up to activate on January 1, 2023 – encouraging the customer to return in the New Year.
Other popular incentive strategies include selling gift cards at a discount or including a bonus gift with the purchase of a gift card.
Look for Cross-Promotional Opportunities
Innovation can often be as simple as partnering with another brand to do something collaborative and creative. Building these partnerships with neighboring businesses can extend the value of gift cards to customers. One great example of this is the tried-and-true experience of dinner and a movie. Darden restaurants and Fandango launched a gift card program that allows a gift giver to provide a full night out to the gift recipient—a choice of dinner at any of Darden’s restaurants and a movie ticket. The single gift card drives revenue for each business, while leveling-up the gift to provide recipients the full experience of a night of the town.
Using gift cards to build brand loyalty is a proven strategy for restaurants. And consumers love them – not only as a popular means of gift giving, but as a strategic purchase that can help them manage their spending. When you add a touch of creativity or new ideas to how gift cards promotions are structured, it will go a long way toward ensuring your gift card program succeeds.