// UK gift card and voucher sales continue to grow despite adverse trading conditions, the UKGCVA & KPMG finds
// Leisure continues to increase market share, reinforcing growing consumer preference for experience over products
// Growth in digital gifting outperformed more traditional physical or paper alternatives
Gift card sales have remained resilient despite tough trading, as leisure and experience continues to challenge the dominance of traditional retail market share.
UK gift card and voucher sales grew by 1.7 per cent on a rolling year basis in the second half of 2019, and increased 0.9 per cent on a like-for-like basis.
The latest analysis by the UK Gift Card and Voucher Association (UKGCVA) and KPMG said the growth occurred against a backdrop of challenges facing many consumer businesses, including shoppers putting off purchases due to Brexit uncertainty.
That UKGCVA added that leisure continued to challenge the dominance of traditional retail by increasing market share, with more and more shoppers favouring experience over products and items.
Nonetheless, sales of gift cards and vouchers continued to be dominated by traditional retail, accounting for 62.8 per cent of the overall market share, the UKGCVA said.
Leisure-related sales grew 24 per cent on a rolling year basis and now accounts for 11.5 per cent of the overall market share – a gain of 2.5 percentage points compared the second half of 2018 to the second half of 2019.
There was also a 13.7 per cent like-for-like increase in sales of gift cards and vouchers online, driven by the growing trend of online shopping as well as the increased interest in leisure.
“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,” KPMG head of UK retail Paul Martin said.
“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.
“If anything, the rise in market share of leisure-focused gift cards bolsters the argument that more work is required to make retail more experiential.
“Shopping is no longer deemed the leisure activity it once was and that needs to change.”
UKGCVA director general Gail Cohen said: “The clear resilience of gift card and voucher sales is testament to the importance of this avenue in generating additional revenue and boosting customer loyalty.
“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.”