The UK gift card market sees a significant shift with digital cards surpassing physical ones, reflecting changing consumer preferences amid economic challenges.
Shoppers in the UK are increasingly seeking convenience and flexibility in their shopping experiences, a trend that is shaping the transformation of the gift card industry. A survey conducted by the Gift Card and Voucher Association (GCVA) and analysts from GlobalData revealed that in December 2024, nearly a quarter (24.2%) of consumers purchased gift cards for others, highlighting the continued relevance of gift cards in modern gifting practices.
In a significant shift, the sale of digital gift cards has surged to account for more than 50% of the market, surpassing physical gift cards for the first time, according to a joint study by the GCVA and consultancy KPMG. “The continued growth of gift cards, particularly in the digital space, underscores the evolving preferences of consumers and businesses alike,” stated Hannah Shimko, managing director of GCVA. This momentous change coincides with the ongoing cost-of-living crisis, which has not hindered the growth of the gift card sector. Don Williams, a retail partner at KPMG, characterized this milestone as a “watershed moment for the industry,” emphasizing the importance of digital offerings to enhance the customer journey during both the purchase and redemption processes.
In response to the changing landscape, Fashioncheque, a gift card solution tailored specifically for the fashion industry, is set to launch in the UK this March. Founded in 2008 in the Netherlands, Fashioncheque facilitates the distribution of over 1.5 million gift cards annually across Europe. The brand is accepted in more than 15,000 stores and online platforms internationally, partnering with well-known brands such as Adidas, Zalando, Foot Locker, H&M, and Jack & Jones, along with local boutiques.
The Fashioncheque gift card promises a seamless experience for both the givers and receivers. Cards can be purchased online with personalized messages or in stores, and redemption at partner brands is designed to be straightforward, requiring only a single step. For retailers, collaboration with Fashioncheque involves a simple integration without upfront costs. Historical sales data suggests that users of Fashioncheque gift cards typically spend 2.5 times the card’s face value, generating over £500 million in additional revenue for partnering brands.
Among the partners is Zalando, a major player in the online fashion market, which has seen its revenue from this sector rise 4.3% year-on-year, reaching €2.2 billion (£1.83 billion) in the third quarter of 2024. Mick van den Noord, retail manager for Zalando in various regions, acknowledged the partnership’s success in reaching new customers and expanding their market presence, expressing optimism for future cooperation.
On the local retail level, Anthony Derdak, owner of Merchant Menswear in Taunton, Somerset, also recognized the benefits of joining Fashioncheque. He noted that partnering would enhance his store’s exposure to a larger market and connect them with European clients, remarking that integrating Fashioncheque was “a breeze” and required minimal setup.
Kevin Stone, involved in business development at Fashioncheque, articulated the company’s unique selling proposition: addressing the challenge of gifting fashion. With a diverse array of international and niche brands available through a single card, Fashioncheque simplifies the gift-giving process by enabling users to shop for the styles they love. He emphasized the appeal of their model, which allows consumers to bypass the usual need to exchange a gift card for a specific brand’s card.
As Fashioncheque prepares to make its UK debut, there are high expectations regarding its resonance with British consumers. Given the hurdles associated with gifting fashion, the company aims to offer a solution that aligns with the preferences of shoppers, similar to its success observed across Europe.
Source: Noah Wire Services
