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We thoroughly enjoyed the 2022 GCVA conference - especially as we were able to meet with our partners, retailers, and industry experts in person again this year. In fact, we had more Tillo team members attending the event than ever before.
And the virtual option meant that more of our team members were also able to join the conference remotely and hear from the brightest and best that the industry has to offer.
By any measure, this year’s conference was a huge success! The agenda was certainly action-packed but as a team we were able to catch every single session on offer (alongside numerous meetings, dinners and an all-round good time). The gift card sector is relatively niche but it’s certainly growing and we love the friendliness of the industry as a whole.
We’ve condensed some of our key highlights here in case you didn’t manage to catch the conference - or you were so busy networking that you didn’t make all of the sessions.
1. A growing need to drive loyalty in 2022
One of the top themes from this year’s conference was the need to drive loyalty - with both customers and employees.
Despite slightly slower predicted growth in the UK economy in 2022, overall consumer spending will likely still go up - but it will be spread more thinly. This means that brands will have to fight for consumers to spend more with them vs the competition. So loyalty will be an essential strategy to drive growth.
And employers will be facing a similar challenge to keep their employees engaged; the UK is seeing a significantly “employee led” market at the moment. Employment has become quite transactional so employers have a need to try and create a level of loyalty and retention amongst their employee base.
Did you know that only 3 in 10 employees are committed to staying in the same role with an employer over the next 10 months?
Loyalty and digital gift cards have an enormous role to play here to address the employee-employer bond, and make it more difficult for people to choose to leave. And packaging wellness and wellbeing with digital gift card offerings will also be key.
This year’s KPMG data showed that by 2021 the whole market has bounced back to 2019 levels at the least. However, Christmas came early, with people shopping in advance due to fear over lockdown and supply. Black Friday was narrow and shallow in 2021, with consumers choosing to spend more carefully.
We recently analysed Tillo data and found a similar trend - spend was more concentrated in December during peak 2020 and 2021 vs 2019.
According to the GCVA State of the Nation report, 37% of all UK consumers received more gift cards over Christmas 2021 and much of these were purchased during the first half of December (43%). Buying gift cards for other people was a significant driver of this spend.
There has also been a trend toward more online spending, with the online penetration rate growing to 40%. We heard how trends like crypto, open banking and the move to digital currencies will continue to shape new use cases for the industry - with gift cards being used to create new business models and new ways to pay.
However, Marion King reminded the audience that everyone should have the right to transact (it should be a human right).
And we need to be mindful that not all people have the ability or desire to engage in digital transactions - but gift cards can play a role here too in catering for this group.
Who is spending and where will be will push retailers to innovate and they’ll be looking to drive growth with an omni-channel approach. Retailers are starting to look at CLV (customer lifetime value) as a primary metric rather than product and channel. This is a major shift in the industry.
78.5% of retailers today are making stores an important part of omni-channel experience; a superior customer experience across channels will be key to drive loyalty.
According to the GCVA State of the Nation report, the percentage of consumers who expect to be able to redeem them anywhere is growing. The report found that 41% of gift card buyers in 2021 expected them to be usable across channels (vs. 26% in 2020).
Today’s consumers won’t tolerate a bad digital experience.
The gift card industry as a whole is growing YoY, topping over 2.3 billion in sales in the UK. And digital gift cards have a 32% share of the gift card market as a whole (this is also growing).
The industry is seeing more and more B2B use cases emerge, such as alternative payouts to gift cards from crypto, payments and insurance, and more.
In the panel discussion hosted by Tillo's CEO, Alex Preece, panellists highlighted that companies are realising that it’s most effective to use gift cards rather than cash - there’s more added value to the customer and the delight factor is greater.
But it does matter how the gift cards are delivered; the experience should be personalised, be paired with recognition and packaged in a way that drives delight.
There’s no doubt that over the course of the pandemic, the gift card industry - and indeed the wider retail sector - has been very resilient and risen to the challenges COVID-19 presented.
Agility was a core theme of the conference, as many of the trends we were already starting to see were accelerated. Retailers were able to turn new products and capabilities around much faster, pulling plans forwards.
For example, in the delivery of Free School Meals, which Tillo and others in the industry were a part of. Also John Lewis and Partners’ Volunteer Shopping Card was up and running in three days, and a new website for Sainsbury’s took just two weeks!
Despite current challenges like inflation, rising energy prices etc., it’s likely the industry will continue to drive innovation and ensure that future business models will be successful.
Businesses will need to test, learn and fail more quickly - as well as capture the ability to get stuff to market quickly as they were able to during the pandemic. This is a huge opportunity to attract new customers.
Following a very difficult 2020, leisure and entertainment bounced back in the second half of 2021. The GCVA attendees heard how businesses like Virgin Experience Days and Lastminute.com came up with fantastic initiatives and innovation during the pandemic, offering customers flexibility and choices at home as well as abroad.
We saw similar trends across the travel and leisure brands that make up our network - check out our new report to see our findings.
Knowing your customer will be key to delighting them in 2022. Gift card providers and platforms will need to use their customer data to drive a superior experience.
But nobody wants a generic message or to feel that they don’t matter to a brand.
Personalisation shows customers that you care and today’s consumers expect it. In fact, they demand it. And they want the experience to be quick and simple. The digital gift card industry in particular is in a position to benefit from increased levels of personalisation.
“Loyalty programmes need to evolve with customer expectations. Consumers want things fast.”
Paul Francis, Senior Commercial Manager, Tesco Gift Cards
So, how can retailers become more sticky?
Retailers need to engage their customers, regardless of where their customers are. We need to make more of the recipient experience and engage with customers on the channels they’re already on.
Whatever form the gift card is received in, the experience needs to be seamless and frictionless. Removing the barriers from buying gift cards will increase their uptake and the redemption experience should be carefully considered.
One idea we liked was the idea of a digital wallet. Some people like to give a gift card as a physical gift so that they can see the delight factor; however, physical gift cards can be easier to forget at home so they need to be able to convert the physical gift card into a digital wallet that can be used anywhere, anytime.
A common theme of the conference was the use of digital gift cards to create more human, lasting connections. It’s about creating connections between people, friends, family, brands, employees and employers.
Gift cards fulfil the human need to give and receive, with a meaningful message - and they give the recipient the choice to buy things that are really important to them.
In her keynote session, Marion King highlighted that, in her opinion, “gift cards convey the messages that money can’t buy.”
Gift cards are a more human way to give gifts, spark delight and create that critical brand connection - that will keep customers coming back for more. When users spend gift cards, brand association is front of mind. Brands that are able to tap into human emotions will be able to drive stronger loyalty.
As we move to a more cashless society, gift cards can also make it easier for users to spend, give consumers more control, and drive inclusion and uphold dignity. For example, they can be used to educate kids on how to manage their money.
Looking forward, some panellists also discussed how brands can leverage data and storytelling to convey the value of gift cards to the c-suite, empowering them to make quicker decisions, and feel confident lending more investment.
It’s important to have a long term strategy for digital gift cards, with 3-5 year goals, but also keep agile and foster an appetite to test quickly and get things done faster.
There’s a need to shift from a survival to a growth mindset (even if that’s challenging in the current climate), and gift cards are in a strong position. From employee benefits, to driving customer loyalty, government initiatives, and rewards - the scope of gift cards is vast.
We were delighted to see so many of our customers and partners at the GCVA this year and had some great conversations over the course of the event. Gail and The GCVA team did a fantastic job of organising such a smooth event.
Whilst there are always some challenges facing the industry, the overwhelming feeling at the conference is that expectations are high for 2022.
Hopefully those that were attending in person were able to enjoy a coffee from a Tillo sponsored coffee cart - it was a pretty decent brew! We look forward to seeing you all at the conference again next year.
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