Author: Steve King, Partnerships Executive at Eagle Eye Solutions
In such unprecedented times as those we all currently face amid the global Covid-19 pandemic, everyone’s thoughts will always first turn to our loved ones. But it has also highlighted the importance of the gift of giving.
Long before most of us had even heard of a coronavirus, the gifting industry had been growing in what was an already challenged business environment for leisure and food and beverage (F&B) operators and brands.
In fact, the Gift Card & Voucher Association (CVA) in March tracked 1.7% year-on-year H2 2019 growth, compared to an overall contraction of 0.1% across all retail, according to the British Retail Consortium.
Although these figures reflect an environment very different to the one we currently face, a rise in spontaneous gifting to show support for loved ones from afar means gifting rates will get a bigger boost.
New gifting behaviour is emerging as social distancing boosts demand, along with popular upcoming gifting occasions, such as Father’s Day and Easter, and 22m UK birthdays due before July, according to ONS data.
Trend towards experience and personalisation
This is because, even before gift vouchers became the most convenient way to give the gift of giving while facing relative isolation, gifting also meets the consumer trend towards buying ‘experiences’ over ‘things’.
Giving more personal gifts that can also be shared, such as a meal or day out, was already a growing trend. But, for many businesses, gifting may also currently be the only way to generate revenue against future sales.
With birthdays, Father’s Day and Easter representing up to as much as 39% of the UK’s annual £3.3 billion spend on gifting for others according to the GCVA’s latest industry valuation, now is the time to invest in gift.
So, consumer businesses of all shapes and sizes are looking at gift to cope with immediate sales and cashflow challenges resulting from national lockdown measures that have forced many of their physical outlets to close.
It might seem counterintuitive right now to focus on selling experiences that require interaction. But travel and leisure, as well as F&B operators can use gift to adapt their seasonal promotional marketing plans.
This can capitalise on a new gifting trend known as “sunny day gifting,” which is when a gift – usually a card or voucher – is purchased with the intention of using it at a later date once everyday life has returned to normal.
So, instead of giving chocolate at Easter, a gym member could perhaps gift a trial membership to be redeemed when things recover. In fact, gifting experiences right now can give the recipient something to look forward to.
Digital rises to meet need during unparalleled situation
In addition, the current situation has also given rise to #PayItForward initiatives for businesses and brands to use digital gift mechanics to crowdfund advanced sales or organise positive community and charitable giving.
A great example is Patty & Bun’s “Black card,” which gives consumers buying a £30 or £50 gift card 10% of all future purchases. It incentivises loyal customer support in a time of need with a mutually beneficial offering.
Consumers are also opting for more gifting options that can be sent digitally and delivered with zero contact during the crisis. As a result, at least one in four consumers will ‘ping’ rather than post their gifts.
Digital gifting already represents 26% of all UK gift cards according to the UKGCVA research, rising to 50% of all gift cards spent online. This is predicted to rise sharply as people manage their gifting from home.
So, it’s easy to see why gifting has already seen positive adoption throughout retail and hospitality sectors. But now is an ideal time for every shop, bar, restaurant and other outlet to focus on their digital gift card strategy.
If you’d like to find out more and how Eagle Eye can help your support business during these unprecedented times, and prepare for the immediate and long-term future, please contact us here.