Britons still buying more gift cards than ever

Feb 21, 2020
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​New research has revealed that the UK gift card and voucher market continues to defy the ongoing retail downturn, but with consumers’ appetites for experiences fuelling the growth.

Sales of gift cards grew by 1.7% in the second half of last year

According to new research from KPMG UK and the UK Gift Card & Voucher Association, gift card and voucher sales grew by 1.7% on a rolling basis in the second half of 2019. On a like-for-like basis, sales of this kind increased 0.9%.

The results suggest that gift vouchers continue to be a popular way of gifting, particularly because of their convenience. In fact, growth in digital cards outperformed more traditional physical or paper alternatives in the second half of last year.

And while traditional retail continues to dominate the market (it accounts for 62.8% of total sales), more and more Britons are choosing to buy leisure gift cards. This highlights a consumer shift towards experiences rather than product ownership, with leisure cards increasing market share by 2.5% to 11.5%.

Paul Martin, UK head of retail at KPMG, said: “In a landscape where winning and maintaining customer loyalty is often the line between success and failure, retailers can’t afford to overlook the key role gift cards and vouchers play. 

“That’s especially true given that growth of gift card sales remains so resilient, despite such volatile trading more broadly. Leisure might be winning some more market share, but many retail players are actually recording double-digit growth of their gift card and voucher sales.” 

The research also found various trends within the market, including the rise of ‘open loop’ gift cards, which saw their market share grow from 3.6% last year to 5.6% in 2019. Business-to-business sales are still going strong, up 12.7% year-on-year, and sales of gift cards and vouchers to consumers online are gaining traction. 

Gail Cohen, director general at the UK Gift Card and Voucher Association, commented: “As the latest figures outline, gift cards and vouchers hold a whole array of new avenues for consumer-facing businesses to consider or improve upon, whether it be business-to-business sales as organisations look at new ways to incentivise and reward their people; or reminding ourselves of preferable buying choices, like the growing popularity of experiences.

“All consumer-facing businesses need to think beyond the traditional view of this growing market, as gift cards and vouchers are changing rapidly and offer a whole host of new opportunities.” 

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