GCVA Conference 2024

Another year, another electric GCVA Conference. The event buzzed with energy as industry leaders from all over the globe mingled and engaged with some intriguing content in the centre of London. Jigsaw had a fantastic time again this year (even showing our questionable dance moves at the Wednesday night drinks), and had some takeaways and learnings from the event that we thought would be important to share:

 

 

1. Get smarter with data, sooner rather than later

 

Businesses are good at collecting data from their own sources, channels and programmes, whether that be a loyalty programme collecting their users preferences in products or tracking their shopping habits, or a brand looking at their own gift card redemption and basket data. But we need to get better at sharing data to enrich partnerships for more informed growth strategies.

 

During the panel discussion on Fintech Payments and the Role of Gift Cards, it was discussed that brands are hesitant to share data externally, but if we can explore what level of insight they are willing to offer then their partnerships will become stronger and data led… Start small and build trust. Begin by sharing non-sensitive or aggregated data to demonstrate the benefits of collaborating. As trust builds over time, parties may become willing to share detailed insights which will give more information for brands and partners to act upon.

 

      2. Fading Value: The Consequences of Expiry Dates on Gift Cards

 

Another takeaway from the Fintech Payment panel discussion that we thought was  interesting. Expiry dates persist as a formidable barrier, dissuading consumers from using gift cards as their first choice for a reward or gift. As a program manager, we see many of our UK brands enforce shorter expiry terms on their UK gift cards compared to their international counterparts. It is worth noting here that breakage is no longer viewed by brands as one of the biggest drivers of value in their gift card programmes as they understand that the lifetime value of an unengaged customer is significantly less than one actively wanting to purchase from you. If breakage is not the reason for shorter expiry dates then what is? Will this lead to UK brands increasing their expiry terms? With the US enforcing no expiry and Ireland 5 years, the contrast is stark and something brands should possibly consider reviewing.

 

This intriguing finding prompts speculation: could it drive a surge in demand for multi-choice products? Multi-choice cards not only offer consumers flexibility, but a longer amount of time to choose how to spend its value, they have the full expiration of the multi-choice card, and then once they have selected their brand, that brand’s full expiration date. It’s widely known that multi-choice products are on the rise, with an 18% increase in 2023, it’s important for brands to consider this channel for growth despite some being hesitant to join a physical product which promotes several brands rather than keeping the focus on their single peg product. 

 

 

       3. To boost or not to boost, that is the question

 

An age old question in the gift card industry. Leveraging discount boosts during strategic periods of the year to drive sales is a proven method. However, amidst this lies the key question: does the increase in sales sufficiently offset the expense of the boost and the customer perception that the brand will discount at that level regularly, deterring them from purchasing year round until another offer appears? 

 

Despite positive reports on the health of the gift card industry, brands are more curious than ever about what they are getting from partners in return for their discounted gift cards. Breakage is a thing of the past, brands can no longer be viewed as milk cows and partners need to really consider what they are giving in return. 

 

Brands aren’t willing, nor should they be, to approve boosts over all key gifting periods throughout the year, they want to tailor their approach. For example, Clarks do a ‘boosting freeze’ over the back to school period of August because of the footfall they get in stores and online naturally. Consequently, it becomes imperative to strategize and provide insightful data to brands when negotiating increased percentages for promotional boosts… what positive impact will they see versus their standard rate over the same period?

 

 

       4. State of the nation & the gift card industry

 

40% of consumers say they will increase their use of brand loyalty schemes in 2024, up from 18% at the start of 2023. This statistic from the KPMG presentation on the Gift Card Industry 2023 Data Insight stood out and is something that needs to be proactively acted upon. Consumers want relevant content and a seamless redemption process from loyalty schemes, to link to an earlier point, sharing data between brand and partner is the best way to achieve targeted added value and to ultimately keep consumers engaged.

 

The Cost of Living Crisis panel further confirmed this surge, as it was mentioned that Tesco have even seen this shift already, with a considerable uptake of their digital reloadable product. Consumers are more wary than ever with their spending habits, and this is being reflected in the use of gift cards or reloadable products where every little saving can help, whether that be their weekly shop, or when out on the high street shopping for gifts or self use items. Loyalty platforms have to make the process as frictionless as possible, so that the reward is worth the effort – what steps is your platform taking to ensure it is as attractive as possible?

 

The conference is always a fantastic event! We loved engaging with industry peers, whilst panels provided invaluable insights into the latest trends in the gift card industry. We hope you enjoyed reading our takeaways and would love to hear what yours were!