Businesses in regions hardest hit by pandemic to drive local spend through gift card programmes
Two regions in the UK hardest hit by the pandemic are to receive a boost with new gift card programmes designed to stimulate the local economy. Southport and East Ayrshire launched Town and City Gift Cards in association with Scottish tech firm Miconex in early August.
In East Ayrshire, the scheme is a joint initiative between the local council and the Kilmarnock Business Association. Over 80 businesses like Brownings the Bakers and Bar Luca have signed up to the programme.
Southport Business Improvement District are behind the Southport Gift Card with over 60 retailers and local stores registered, and an aim of increasing this to 150.
Cards can be purchased with a value of £10-£500 as gifts with the recipient able to use the card like a debit card across multiple outlets.
Data from the ONS shows that 61% of businesses in Scotland and 60% of businesses in the north-west reported a decrease in turnover in June and July 2020. This compares to 58% in Wales, 57% in England generally and 54% in Northern Ireland. Sectors particularly affected include arts, entertainment, recreation, accommodation and food service.
Southport BID CEO Rachel Fitzgerald commented: “Credit on the Southport Gift Card will be redeemable through multiple transactions at participating businesses within the Southport BID area. We want the card to help drive local spend and a shop local message. Our focus is firmly set on helping our local businesses in Southport to recover from this Covid crisis. We are doing everything we can to help our town.”
East Ayrshire councillor Jim Roberts suggests that the East Ayrshire gift card will go some way to repair a local economy devastated by lockdown: “We’ve realised just how much we need our small local retailers. It’s really important that we all now do our bit to support them through the tough times that will inevitably be ahead.”
Yet, there are signs that customer confidence is returning with YouGov reporting that consumer confidence rose for the third consecutive month in July, achieving positivity for the first time since February.
Managing Director of Perth based Miconex Colin Munro said that the launch of the Town and City Gift Card scheme in East Ayrshire and Southport will support businesses with their post-covid recovery efforts:
“The pandemic has caused a significant change in customer behaviour. 62% of people have been shopping on their local high street during the pandemic and 70% of those who shopped locally will continue to do so. Local authorities and business improvement districts want to make this a permanent change in behaviour, presenting a viable alternative to online gift cards like Amazon and Apple that take spend out of the local economy.”
“Miconex developed its first gift card programme in Perth in 2015. We now have over 40 cities and towns with programmes, £1.5m in sales and over 6,000 participating businesses registered. 8 more programmes will launch in the next two months. The Town and City Gift Card programme works like local currency through the Mastercard network. Recipients of the gift card spend it with local retailers which drives footfall, supports local businesses and stimulates economic activity.”
As a former restaurateur, Mr Munro is well placed to understand the needs of a small business: “Some 10-12 years ago, I was running a seafood restaurant in north east Scotland. As a business owner, you just want to be able to tell customers what you’re offering. That was a problem I wanted to help with in an evidential and meaningful way.”
“Even though I’m working from the other side now with place managers and local authorities, I haven’t lost that small business owner mindset and understanding. Over the years, this knowledge has fed into Miconex initiatives like Mi Rewards, a simple way of automatically rewarding customers for spend or Mi Inverness, a hub for businesses in the highlands to easily share their news and offers.”
“Small local businesses have progressed more in the past 3 months than they have in the last 3 years because they’ve been forced into this position where they have to bring in new revenue streams. When a town or city joins our Town and City Gift Card programme, we make it easy for small businesses to start getting redemptions from customers with a single registration and no ongoing commitment.”
In July 2020, Scotland’s Town’s Partnership launched its Scotland Loves Local campaign in association with the Scottish government, an initiative that Mr Munro believes is vital for encouraging consumers to think local:
“It’s heartening to see this high profile, government backed campaign to drive permanent consumer behaviour change, supporting businesses as they adapt to the post covid landscape, and educating and encouraging customers to shop locally.”
Alongside the government’s announcement of £20 million in funding for small business in England, Mr Munro believes that the UK government can further support the high street by raising the tax free gifting limit to £500.
“Another trend we’re seeing is for employers to use gift cards to reward their staff and with our programmes they can support their local economy too. At the moment, any reward over £50 given by an employer is subject to tax through the HMRC trivial benefits allowance. By raising this to £500, the government could stimulate spend where it is most needed, on high streets up and down the UK.”