With unprecedented trading conditions for retailers this year and lockdown 2.0 in place, what can retailers and businesses expect from the big weekend? We caught up with Lee Spencer, Tillo’s CFO, to find out a bit more about his predictions for the big day…
Hi Lee, thanks for speaking with me today, your team must be incredibly busy at the moment?
Yes it’s a busy time for everyone at Tillo; ensuring brands are getting the most from the platform with promotions in the run up to the weekend, and from a finance perspective, ensuring that relevant funds are approved and in the right places, floats maintained and payments are received in good time from our partners so everything runs smoothly.
The team enjoys this time of year and all the hard work we put in behind the scenes will ensure it’s seamless for our network.
So, what’s been happening with sales in the Tillo platform in the lead up to Black Friday this year?
Well it’s been really interesting. October was really buoyant for us and we have seen our network sales double through our platform compared to the previous October and increase 17% compared to September.
We experienced very little impact overall from lockdown 2.0 with all of our sectors either growing or remaining constant. We can see that it has been tough for a number of retailers having to close their stores and restaurants however with this short lockdown sales are consistently going through for the vast majority and with the news from the Government we should see some form of normality resume next week.
Leading on from this I can see the increase in sales started at the same time as last year, however, I feel there has been a slight holdback over recent weeks as if consumers were waiting to see if and how lockdown will be lifted and how much of their shopping they will have to do online as a result of not physically being able to visit a shop. The nation is holding its breath to see what happens next but I feel that now we know restrictions are being lifted a wave of retail spending can now start with Black Friday events.
Recent research from pwc highlights that, due to the second lockdown, spending in this year’s Black Friday sales is actually set to fall to £6.2 billion - a 20% decline versus last year. Other than the fact that Tillo is a digital platform, what do you think is behind the growth you talked about before?
Although Tillo operates within the gift card sector, it’s also really important to highlight that we are operating in the B2B and digital environment which is a fast growing segment of the market. Consumer behaviours are digitally evolving and in the current climate many more consumers are moving online and to ‘touch free buying’ and this fits within Tillo’s core strengths.
The GCVA gift card growth is forecast to increase 24.7% in the total value of the UK gift cards market over the next five years or so. Primarily this will be driven by the B2B side of the market both via consumer expenditure through work and wellbeing programmes, and the value of the gift that shoppers receive for free.
As millions of employees continue to work from home into next year, and with a number of traditional festivities such as office Christmas parties moving online, employers need to find new and innovative ways to reward their staff and look after their wellbeing; moving into 2021 this trend and growth will continue to rise even more sharply.
In 2019, the combined purchased and received elements of the B2B market was worth just over £3.3bn and GlobalData forecasts that the B2B market will grow around 49% over 2019-25, to just under £5.0bn. The market is growing, evolving and innovating and it’s an exciting time to be in the gift card market.
You mentioned that there has been a slight holdback in the run up to this Friday - what are your predictions for December?
That’s a tricky question but now we are receiving information on how this lockdown will end, I am hoping that all businesses can have a clear run to trade through the rest of the year and if so we can build some momentum in terms of business and jobs.
From today consumers will now start planning, buying and preparing for the best Christmas period we are able to this year and that is most welcome. If we can have a good clear run of the virus, December will be a good month for retail businesses and this weekend should be the start of a strong month of sales.
Thanks for your time today Lee - we’ll catch up again soon to share some insights on peak trading in December and Q1 next year!