According to data from The British Retail Consortium, the UK has one of the most advanced online shopping and delivery offerings in the world, accounting for nearly 40% of retail spend. The global pandemic has undoubtedly forced businesses to either build an online offering or improve it to drive sales but where will we go from here? I believe that personalisation on a one-to-one basis, clever digital incentives and a focus on sustainability will enable retailers to thrive through 2021.
Transactions to treats
Through 2020 we’ve seen a considerable move from solely transaction-based communication to more thoughtful and meaningful ways of engaging with customers. Consumers’ needs are constantly evolving, and this year we’ve seen a shift towards people valuing their time more, making considered decisions, and caring more deeply about what they’re buying, where it’s from and who is selling it. In turn, retailers are looking to recognise this behaviour by moving into the perks and rewards space, shaping their story and narrative, and evaluating the sustainability of their supply chains.
The technology at our fingertips now makes it even easier for brands to drive the gamification of customer engagement with digital goods redemption whether that’s through billboards, social media or digital objects through augmented and virtual reality. Through 2021 I think we’ll begin to see more consumer-facing businesses teaming up with other like minded organisations to offer quick redeemable perks that enhance brand loyalty and encourage continued custom.
Employee reward programmes: the opportunity for retailers
Employee wellbeing has been a top priority through 2020 and I think this is set to grow as we move into 2021. It’s been interesting to see how businesses have adapted to offer this in the remote world. Whether employers are looking to reward or motivate their teams, a personalised approach will set the bar high. At Tillo, we work with hundreds of brands to offer digital gift cards to our extensive partner network. Over the last nine months, we’ve seen a considerable rise in businesses looking to use our platform to reward their teams.
In line with how consumers’ needs are evolving, in remote working environments, micro-gifting is also becoming increasingly popular with today’s global workforce, offering a personal and engaging experience. Whether it’s sharing a digital gift card that can be redeemed for a coffee, a bottle of champagne or a box of brownies, employers can now access a variety of gifts to suit their teams which can be delivered to their doorsteps.
Over the next five years, the total value of the UK gift card market is forecast to grow 24.7% with growth coming predominantly from B2B markets. In addition to this, looking at how the global workforce is becoming increasingly remote, by the end of next year I think this micro-gifting approach will be standard practice.
Making the most of multi-retailer gift cards
Over the last few years, the UK has seen a particular rise in multi-retailer gift cards. Whilst there has been hesitation from some retailers when looking at multi-retailer offerings, these schemes are one of the fastest growing gift card categories and are becoming increasingly popular with B2B incentive programmes. Retailers should consider the opportunity this could bring to their revenue streams as well as access to a potential new pool of customers.
Undoubtedly conditions for many retailers continue to be tough, however, businesses have a new opportunity in 2021 to capitalise on lessons learned in 2020 and build on the technologies they’ve adapted or incorporated into their business models. According to the GCVA, the gift card industry was worth £6.9 billion in 2019, up from £6 billion in 2018 and I believe this market is ripe for continued growth over the coming years. Retailers should act now to tap into the continued growth in the B2B markets and reap the rewards the gift card market can bring.