Consumer gift card and voucher sales in the first quarter of 2013 grew by 4.6% year-on-year, new figures from the UK Gift Card & Voucher Association (UKGCVA) reveal.
"Over 4% growth across the industry is a very strong performance given the instability of the wider retail market," said Andrew Johnson, director-general of the UKGCVA, the trade body that represents the £4.7bn gift voucher, cards and stored value solutions industry.
"It’s encouraging to see evidence that consumer confidence in vouchers so far seems to be relatively unaffected by fall-out from high street administrations and issues around voucher redemption. Many consumers still turned to vouchers as a gift option in the run up to Easter."
The report, compiled independently by Ernst & Young, showed that strong growth was seen across a variety of consumer gift card sales. Traditional paper and e-vouchers enjoyed "staggering growth" of almost 20% whilst restricted loop gift cards showed the highest growth of 35%, according to the figures.
Sherwood Press chief executive Jeremy Bacon said: "This is a growth market; there’s no doubt about it. It’s an important part of our business and we work with clients who supply most of the major retailers.
"One of the drivers for retailers is the amount of gift cards that are not redeemed – it’s a very high-margin product for retailers. It’s surprising how few cards are redeemed. Retailers are giving them more space in store.
Bacon said he believed the figures also reflected a huge amount of innovation. "Though online is a threat to all forms of print, if you are looking at traditional litho print on paper, there are so many value-added finishes such as foils and glitter, which make the product more attractive," he explained.
Windles Group senior manager Michelle Mills said: "Some of this increased growth will no doubt be on-line with e-vouchers. But gift cards are becoming more popular. Consumers have less to spend these days, so the concept of getting more for less through vouchers is huge.
"We don’t foresee any decline in demand for printed gift cards and vouchers. On the contrary we’ve enjoyed manufacturing higher volumes. People like to touch and feel things, especially gifts. They enjoy receiving something physical and tactile.
Mills said the company was using innovative finishing techniques such as foiling and deep textured varnish. She added: "This is an area we create more value on printed material at relatively low cost."
Johnson said the association did not currently collate data on digital sales but would be starting from the second quarter of this year. Members were reporting increases in digital, which was still very much in its infancy, he said.
"Few high-street retailers have yet to incorporate digital into their gift card and voucher strategy. We expect to see a handful of digital launches for this Christmas with the pace increasing in 2014.
"It is unlikely Christmas 2013 or 2014 will be a digital Christmas but 2015 could pan out to be an interesting mix of paper, plastic and digital. The long-term view is that plastic will dominate with paper dwindling and digital increasing," he added.
