Indian shoppers are now less sentimental and more practical about picking up gifts and prefer gifting friends and relatives with vouchers that offer ‘choice'.
The Dubai-based Landmark Group that owns the Lifestyle, Max and Spar chain of stores saw gift voucher (GV) sales grow by 50 per cent year-on-year and at Future Group's Central chain of stores, there was a 40 per cent rise (year-on-year) in its GV sales at the end of the year.
“GVs have emerged as a popular gifting option as they allow the convenience of choice to recipients. Our GV customers include both corporate and individuals and we witnessed growth in both the segments,” says Mr Shankar Suryanarayan, Chief Marketing Officer at Landmark Group India.
Mr Rajesh Seth, Vice-President, Marketing, Central and Brand Factory, says GVs offer options that suit modern lifestyles and they are as good as currency. Redemption rate too is as high as 98 per cent, he says. “For retailers, it offers the advantage of getting a new set of customers every time they redeem their vouchers.”
At books and stationery retail chain Crossword, its corporate GVs that have grown in double digits, says its Manager, Marketing, Mr Sivaraman Balakrishnan. “Apart from the traditional Diwali and New Year, we are also promoting Valentine's Day and Raksha Bandhan as occasions for gifting vouchers.”
At most retail outlets 8-10 per cent of the revenues come from GVs. On consumers' favourite denomination, all retailers agree that Rs 500 is the most gifted voucher while Rs 1,000 is becoming popular too.
More opportunity
Sensing an opportunity in the GV business, even brands and malls have launched individual cards and vouchers used at their outlets.
Planet Retail that retails brands such as Guess, Nautica, Debenhams and Next, saw a 100 per cent rise in the GV sale during the festive season. The Guess brand has sold GVs even up to a denomination of Rs 10,000 and so the company is now looking at introducing card-based GVs for all its brands that can be loaded from Re 1 to Rs 1 lakh, says Mr Vikas Purohit, the COO of Planet Retail.
Pizza Hut has launched a gift card that can be loaded for denominations of Rs 300 to Rs 500 and used for gifting people. Bangalore's Mantri Square, one of the largest malls in the country, has launched an in-house GV that can be redeemed at any store within the mall. Apart from individuals, corporates use it for gifting associates and employees, says Mr Jonathan Yach, CEO, Mantri Square.
Specially packaged
Planet Retail is working on specially packaged GVs to make it look like ‘a presentable gift.' Central has Indianised the GV concept by adding Re 1 to the voucher value, so that customers can gift their relatives and friends Rs 501 or Rs 1001, says Mr Seth.
With consumers becoming increasingly time-poor, GVs allow the consumers to gift a ‘brand', with the gifted one having the flexibility to choose a product/ service based on their need or choice, says Ms Saloni Nangia, Senior Vice-President, Technopak Advisors. For brands and retailers, promotions through gift vouchers is a cost-effective way of encouraging target consumers to directly connect with and experience the product, brand or the store, she points out.