Online greetings card and gifting retailer and Growth 2000 company Moonpig has seen revenues drop year-on-year in the first half of 2021/22, despite delivering 19.5 million orders and taking its highest ever share of the gifting market.
Group revenue for the half year to 31 October 2021 stood at £142.6m, compared to £155.9m for the same period to October 2020. It was, however, more than double that seen pre-pandemic in 2019.
The retailer has seen very large growth in its mobile app use, with a 42% increase in orders to its app for the half. It has also taken a 48% share of the UK gifting market and plans to expand this further through more store-in-store partnerships such as its existing operation with Virgin Wines.
Moonpig is also looking to expand its gift portfolio with the introduction of fragrances and branded toys, along with developing new packaging ‘experiences’ to enhance the delivery of cards and gifts.
These moves are likely to help off-set the fall if revenues seen as shoppers turn back to physical retail for gifting and card experiences.
Commenting on the results, CEO Nickyl Raithatha says: “Moonpig Group continues to successfully deliver against its strategy to become the ultimate gifting companion. Our new technology and data platform continues to make it easier for customers to remember, find, create and send the perfect greeting card and the perfect gift to their loved ones. As a result, our half year results demonstrated even stronger customer retention and our highest-ever proportion of revenue from gifting.
“With revenue more than doubling over the past two years, we are confident that we have achieved an enduring transformation in the scale of our business. The long-term opportunity remains vast, and we have never been in a better position to capture this growth.”
Analysts are less bullish. Chris Daly, CEO at the Chartered Institute of Marketing says: “Despite a strong start to the year, today’s results would suggest Moonpig has been losing out to competitors as consumers returned to bricks and mortar stores. The online card and gift retailer was hoping to reap the rewards of its huge marketing spend earlier in the year, but instead has found itself entering the festive season on the back foot.
“Moonpig believes the key to its success lies in part with its brand mascots, which it says are the shortcut to brand recognition, and its dedication to its customers. In October, the greetings card provider launched a 48 hour offer that allowed customers to send one free ‘Thinking of You ’ card to a loved one to be delivered ahead of World Mental Health Day. Investors will be hoping to see such campaigns having an impact on the businesses bottom lines.
“However, with concerns surrounding the new covid variant growing, and consumers becoming more cautious and reluctant to head to physical stores, it may give Moonpig a much needed last minute sales boost.
“As the card giant moves into the new year it will now need to demonstrate to investors how it’s long-term plans for staying ahead of the competition. Moonpig has already hinted that its new augmented reality offering will play a part in its strategy, but only time will tell whether the investment has pulled off.”