UK retail gift card sales experienced a 3.1% decline in the second half of the year compared to the previous year, indicating a continued preference for gift cards among consumers when purchasing presents for loved ones. However, recent data suggests that consumers are increasingly embracing experience-led gifting following extended periods of lockdown, which could be positive news for the fashion industry.

The Gift Card & Voucher Association (GCVA) conducted research and found that there has been a significant increase in demand for leisure gift cards. Experiences such as dining out, theater trips, and travel are among the top choices for consumers. This trend is likely to lead to wardrobe refreshes and shopping for new fashion items.

According to the GCVA, leisure gift card sales grew by 110% year-on-year in the second half of 2021, with sales increasing by 74.7% on a rolling-year basis as restrictions eased. It is worth noting that business-to-consumer sales also saw growth, increasing by 14.1% on a rolling-year basis in 2021, with a growth rate of 12.6% in the last six months compared to the same period in 2020.

In terms of digital gifting products versus physical gift cards, the research revealed that digital gifting is gaining prominence, with a 15% increase on a rolling-year basis across 2021. However, physical gift cards still hold a strong position in the market and continue to show growth, with a sales increase of 5.2% on a rolling-year basis and stable sales on a like-for-like basis.

The GCVA highlighted that while sales of leisure gift cards declined during the COVID-19 pandemic, there has been a significant increase in demand for experiences as restrictions have eased. Previous research conducted in the summer of 2021 showed that 15.8% of respondents viewed gift cards as a great way to purchase experiences once restrictions are lifted. Additionally, 24.8% of the public specifically bought gift cards during this period to enjoy experiences with loved ones or visit their favorite restaurants or pubs.

Don Williams, Retail Partner at KPMG UK, commented on the latest figures provided by KPMG, stating that while retail sales have remained resilient over the past six months, gift card and voucher sales have outperformed with 7.7% growth. The shift towards digital gifting, which was accelerated by the pandemic, has now become a matter of choice and habit for many consumers. This trend is evident in the 15% growth in sales of digital gift cards.

Williams emphasized that the gift card and voucher sector has a significant opportunity to meet consumer needs and expectations. Businesses in the consumer-facing sector should prioritize offering a gift card program and expanding digital offerings that can be redeemed at any time, aligning with changing consumer desires.

In conclusion, while retail gift card sales in the UK have declined, there has been a surge in demand for leisure gift cards and experience-led gifting. This presents an opportunity for the fashion industry to benefit from consumers looking to refresh their wardrobes as they engage in various activities. Embracing digital gifting options and ensuring flexibility in redemption will be crucial for businesses seeking to cater to consumer preferences.

Useful links:

1. The Gift Card & Voucher Association
2. KPMG UK