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Top 10 Takeaways from the GCVA Connect Annual Conference 2021

Posted on 18 March 2021
Read time 3 mins
Author Tillo

It's a few weeks since we attended the GCVA Connect Global Conference 2021, and we've had some time to digest everything we learned from the event.

The overriding theme this year, of course, was COVID-19 and all of the severe disruption it has caused. We were relieved to learn, however, that the coronavirus hasn't had a completely negative effect on the UK gift card sector. Instead, the pandemic appears to have acted as a catalyst and accelerated trends that were already in progress; companies have had to fast-track plans that they previously thought they had years to complete, such as the shift from physical to digital, for example.

Additionally, COVID-19 has shifted the balance of B2B and B2C; where B2C experienced a decline of 21.6%, B2B experienced 24.9% growth. The UK sector as a whole experienced 4.6% growth in 2020, despite the extreme difficulties it had to contend with. Ultimately, the UK gift card market appears to have weathered the storm.

Here are 10 specific takeaways from the event and a few key areas to keep an eye on in 2021:


B2B dominates

B2B had been on an upward trend over the last few years, however in 2020 we saw a significant shift. B2B sales grew by 24.9% in 2020 and commanded 67.3% of the market share of gift card sales, with B2C accounting for only 32.7%.

We expect B2B to continue to increase in importance, but it will be interesting to see if we will see a shift back towards B2C when we come out of lockdown.


Digital is in vogue and here to stay

Physical gift cards have dominated for a long time, but digital had been increasing steadily. However, the pandemic has given digital a real boost as they are so quick and easy to access and distribute. KPMG saw a near doubling in growth from 2019 to 2020! With this greater usage comes greater acceptance of how convenient they are. Ultimately, this makes them a more viable alternative in consumers' minds, especially when shopping online, which is another trend that has accelerated.

So with improved experiences and more faith in the digital form, we think that digital will maintain its popularity.


A shift to local

There have been many ideas and schemes in the UK that encourage local shopping to help save town centres and be less negatively impactful on the environment. COVID-19 restrictions encouraged similar behaviours, as the public was discouraged from non-essential travel; people were therefore forced to shop closer to home (if they weren't shopping online) and appear to have enjoyed that experience.

It seems the US is also experiencing this trend, with many big retailers looking to move from their large out of town mall spaces to more local "off-mall" locations. It will be interesting to see how this develops once lockdowns end. Still, with remote working widely accepted as the new norm in many industries (for at least part of the time), there is an opportunity for gift cards to play their part in supporting people to shop locally.

Voluntary/Employee Benefits had a good year

Voluntary Benefits - or what could essentially be called B2B2C - made up 70% of B2B sales in 2020. This is a staggeringly large amount, and it is interesting to see that a huge portion of B2B gift card sales was for self-use rather than gifted or rewarded.

We could broadly speculate that the pandemic, and the economic uncertainty that came with it, has led to an increase in thrift-shopping among employees. It will be interesting to see if these money-saving behaviours continue as the world opens up again.


Government schemes (G2C) present a new opportunity

With the success of the free school meals scheme brought about by the pandemic, the Government's eyes have been opened to the effectiveness of using gift cards. Especially since £380m worth of voucher codes were redeemed into supermarket gift cards between March-August 2020. Given the promising results of this scheme, we predict G2C is likely to have a huge impact on our sector for years to come.


Choice is popular

We have seen a large number of gift card programs in the last couple of years that allow for multi-retailer redemption (be it a true multi-retailer card or an open-loop card). The pandemic has created a lot of uncertainty in the retail sector, so there are many reasons to believe that consumers would like the security of not having all their eggs in one retailer basket. Some evidence of this is that open-loop was the only area of growth in the B2C market, although it remains a very small part of that market. However, the growth and its small starting point could point to opportunity, especially in B2C (B2B is dominated by self-use).


Consumers want omnichannel flexibility

Some brands have a confusing offering, for example: a digital gift card that can only be used in-store.

Consumers prefer gift cards that can be bought and redeemed through a wide variety of channels


Retailers want more data

Retailers want to use data to help them really understand their sales, make data-informed decisions, and grow their businesses. Historically we know that they are under-served in this area, and providing better data is an opportunity for growth. Look out for Tillo's retailer analytics functionality launching later this year!


Consumers expect personalisation

Consumers are increasingly demanding more personalisation in their shopping and gifting experiences. Being able to accompany a digital gift card with a custom text or video message is an example of this. The ultimate goal is to make receiving a digital gift as special and emotional as receiving a physical gift in person.


The UK Gift card market is resilient

Pretty much every other market in the world decreased last year, but the UK managed to grow by 4.6% despite all the challenges. This speaks to the talent and determination of those who work in this industry.

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