Moonpig Group Plc · LSE:MOON
Moonpig — Investor Day (October 2024)
58 slides from Moonpig's investor day presentation, Oct 15, 2024
Slide 1: Card Market and Consumer Buying Behaviour
Card Market and Consumer Buying Behaviour Key Findings for Capital Markets Event Moonpig Group 15 October 2024
Slide 2: Agenda
Agenda Card Market Country Overview UK Greetings Card Purchasing Behaviour and Resilience UK Online Card Purchasing Propensity and Headroom Netherland Card Market and Online Buying Behaviour Card Attached Gifting in the UK UK Experience Gifting | © OC&C Strategy Consultants 2024 2
Slide 3: Total UK+NL+RoI gifting spend is worth c£58bn per year
Card Market Country Overview Total UK+NL+RoI gifting spend is worth c£58bn per year of which £24bn is on occasions where a greeting card is sent Summary of UK + NL + RoI Market Size - 2023 Total Gifting c£58bn UK: £40bn1 NL: £14-15bn ROI: £3bn Card-attached Gifting Occasions c£24bn The card attached
Slide 4: Card giving penetration is generally lower outside UK and RoI
Card Market Country Overview Card giving penetration is generally lower across markets outside of the UK and RoI, alongside lower purchase frequency International Markets Summary Singles Only UK US AUS NL IE Adult Population (m) 54m 262m 21m 14m 4m £4.4bn Singles Market Value £1.4bn (£bn) £0.3bn £0.
Slide 5: Executive summary – UK card and gift market and outlook
Executive summary – UK card and gift market and outlook Overall UK singles market experienced a step down through Covid in card purchasing volume (decline in cards purchased per buyer through loss of peripheral occasions plus some penetration fall-off in younger generations) but that has now mostl
Slide 6: Agenda
Agenda Card Market Country Overview UK Greetings Card Purchasing Behaviour and Resilience UK Online Card Purchasing Propensity and Headroom Netherland Card Market and Online Buying Behaviour Card Attached Gifting in the UK UK Experience Gifting | © OC&C Strategy Consultants 2024 6
Slide 7: UK singles greetings cards account for c£1.4bn of market sales
UK Greetings Card Purchasing Behaviour and Resilience In the UK, singles greetings cards (where Moonpig focuses) account for c£1.4bn of market sales UK Greetings Card (Single + Boxed) Market Value (£m) 2023E 1,500-1,600 150-200 1,419 1,207 212 Online Singles Offline singles Total singles Boxed cards
Slide 8: In 2023, singles market had slight volume decline but grew in value
UK Greetings Card Purchasing Behaviour and Resilience In 2023, singles market experienced slight volume decline – but grew in value terms driven by ASP inflation (and annualisation of previous price rises) UK Singles Greetings Card Market Evolution, 2016-23 UK Singles Greetings Card Market Volume (M
Slide 9: Covid drove a one-off drop in cards per buyer, now stabilised
UK Greetings Card Purchasing Behaviour and Resilience Covid drove a one-off drop in cards per buyer, which has now stabilised slightly below 2019 levels; ASP growth has sustained value momentum Key Market Drivers, 2019-23 (% / units / £) Overall Card Giving Penetration Cards per Buyer ASP (% UK Adul
Slide 10: Life stage and card usage by age
UK Greetings Card Purchasing Behaviour and Resilience While card penetration is generally higher amongst older demographics, life stage plays an important role with parents driving up cards per sender Greetings Cards Usage by Age & Life Stage1,2,3 N=2,004 Greeting Cards Usage (% Population by Age)4
Slide 11: Cards per buyer have held up in younger demographics
UK Greetings Card Purchasing Behaviour and Resilience Cards per buyer have held up in younger demographics, with decline in volume driven by a drop in peripheral occasions during Covid amongst 55+ Cards Purchased per Card Buyer per Year By Age Group: Pre- vs Post-Covid Long-Term Consumer Survey Trac
Slide 12: Average Moonpig customer purchases c22 singles cards per year
UK Greetings Card Purchasing Behaviour and Resilience The average Moonpig customer purchases c22 singles cards per year in total - above the average behaviour of a UK card purchasing adult Total Singles Cards Purchased per Person – Last 12 Months 21.8 19.1 Moonpig customers Average UK card purchasin
Slide 13: Greeting cards are one of the most resilient categories in recession
UK Greetings Card Purchasing Behaviour and Resilience Greeting cards are one of the most resilient categories in recession – most consumers would cut spend elsewhere instead Recession Resilience by Category1 (% Respondents) N=2,004 5% 6% 10% 10% 13% Cut price & 7% 5% 15% 17% 19% 17% 19% 21% quantity
Slide 14: Replacement threat from digital alternatives is low
UK Greetings Card Purchasing Behaviour and Resilience Replacement threat from digital alternatives / e-cards is low – most consumers believe they can never replace physical cards Threat of Digital Alternatives1 N=2,004 Usage of alternative channels is low today, with most use cases Most customers do
Slide 15: >50% of e-card and social users do not see them as replacement
UK Greetings Card Purchasing Behaviour and Resilience >50% of users of e-cards and social media greetings do not see the channels as a replacement for physical cards Threat of Digital Alternatives1 “Social media cannot replace the need to send physical “E-cards can never replace physical cards” card
Slide 16: Usage of digital cards appears to have peaked 4-5 years ago
UK Greetings Card Purchasing Behaviour and Resilience Usage of digital cards appears to have peaked c. 4-5 years ago whilst overall volume search interest has been declining over the longer term Digital Card Usage Over Time Long-Term Consumer Survey Tracking Digital Card Usage1, 2016-23 Volume of Se
Slide 17: Heavy card users more likely to complement with digital alternatives
UK Greetings Card Purchasing Behaviour and Resilience Heavy users of greeting cards are typically much more likely to complement those with digital alternatives (rather than replace) Alternative Greeting Methods1 by Card Purchase Frequency Usage of Alternative Channels L12M Delta to Full Sample, by
Slide 18: Digital alternatives across occasions
UK Greetings Card Purchasing Behaviour and Resilience This is consistent across occasions; consumers are more likely to opt for social media / messaging Usage of Digital Alternatives across Occasions1 N=2,004 % Respondents Christmas Birthdays Other Seasonal Other Non-Seasonal Text message 27% 29% 16
Slide 19: Younger age groups overindex on digital alternative channels
UK Greetings Card Purchasing Behaviour and Resilience Younger age groups significantly overindex on all digital alternative channels, especially on text and social messages relative to 55+ age group Alternative Greeting Methods1 by Age Usage of Alternative Channels L12M Delta to Full Sample, by Age
Slide 20: c.65% of non-card purchasers likely to buy a card in next 12 months
UK Greetings Card Purchasing Behaviour and Resilience c.65% of non-card purchasers state they are likely to buy a card in the next 12 months, which is significantly higher amongst under 55s Likelihood of Purchasing Cards Next 12 Months of Non-Card Buyers by Age N=1,764 N=689 N=555 N=520 Don’t know 7
Slide 21: Agenda
Agenda Card Market Country Overview UK Greetings Card Purchasing Behaviour and Resilience UK Online Card Purchasing Propensity and Headroom Netherland Card Market and Online Buying Behaviour Card Attached Gifting in the UK UK Experience Gifting | © OC&C Strategy Consultants 2024 21 21
Slide 22: Online card sales were worth c£212m in 2023
UK Online Card Purchasing Propensity and Headroom Online card sales were worth c£212m in 2023 – up c7% in revenue vs 2022 (mostly driven by ASP increase) UK Singles Greeting Cards Market by Channel, 2016-23 (£m) +0.5% +3.7% -8.5% +5.6% 1,419 1,347 1,357 1,365 1,366 1,365 1,320 1,250 1,207 Offline 1,
Slide 23: UK online cards market is c.50% larger than pre-Covid in value
UK Online Card Purchasing Propensity and Headroom The UK online cards market is c. 50% larger vs. pre-Covid in value terms, with the volume normalisation having now played through Key Online Market Drivers, 2019-23 (m units / £m) Online Volume Online Value +21% +52% 71m £239m £243m 68m £212m £198m 5
Slide 24: Online buyer penetration and cards per buyer have settled at new base
UK Online Card Purchasing Propensity and Headroom Recent UK market performance suggests online buyer penetration and cards per buyer have settled at a new base (above pre-Covid levels) Key Online Market Drivers, 2019-23 (% / units / £) Work in Progress – May be Refined Online Buyer Penetration Onlin
Slide 25: Autumn 2023 first period since COVID with unaffected online LFLs
UK Online Card Purchasing Propensity and Headroom Autumn 2023 represents the first period since COVID in which online LFLs are not impacted by either COVID benefits or subsequent unwinding of these % Change in UK Footfall vs Same Month in 2019 (Rolling 3 Month Average) COVID lockdown periods Consume
Slide 26: Market web traffic points to online volume growth resuming
UK Online Card Purchasing Propensity and Headroom Market web traffic levels point to online market volume growth resuming in Autumn 2023 Market Web Traffic Growth – Month vs same month previous year 15 10 Market web traffic 5 0 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Se
Slide 27: Online card purchasing propensity highest in under 55s and parents
UK Online Card Purchasing Propensity and Headroom Online card purchasing propensity is highest in under 55 age groups and parenting lifestage Underpenetrated Customer Groups and Occasions for Online Share of [Card Volume], % Age1 Life Stage2 N=499 N=1,031 N=531 N=499 N=1,031 N=531 17% 24% 23% 18-34
Slide 28: Outlook for online buyer penetration is positive across age and life stage
UK Online Card Purchasing Propensity and Headroom Outlook for online buyer penetration is consistently positive across age and life stage Future Online Penetration1,2 of Current Card Buyers Current In 12 Months In 3 Years By Age Group By Life Stage +12ppts 62% 60% +9ppts +8ppts 52% 53% +8ppts +7ppts
Slide 29: Younger generations increasingly shop for cards online
UK Online Card Purchasing Propensity and Headroom Younger generations are demonstrating increasing propensity to shop for cards online with high future channel shift momentum expected Evolution of Greetings Cards Usage1,2,3 by Age Expected change in # Expected change in # Adult # Card Online cards p
Slide 30: Drivers of online card purchase
UK Online Card Purchasing Propensity and Headroom Personalisation, breadth of choice and convenience are the key drivers of online card purchase Drivers of Online Card Purchase1 Online Shoppers (N=1,031) % Respondents Online much In-store much better better Can personalise the card 49% 27% 14% 6% 4%
Slide 31: Online overindexes in specific customer missions
UK Online Card Purchasing Propensity and Headroom Online overindexes in some specific customer missions – particularly posted cards and where there is a desire to personalise for close family Online vs. In-store Last Channel Purchase Last Channel In-store (N=1,418) % Respondents Last Channel Online
Slide 32: Online over-indexes where postage and customisation matter
UK Online Card Purchasing Propensity and Headroom Occasions where online card penetration over-indexes are typically those where postage convenience and customisation are particularly important Share of Card Purchase Volumes by Channel and Time to Card Delivery1,2,3 Survey Responses Weighted to GCA
Slide 33: Trajectory for addressable missions is positive for online
UK Online Card Purchasing Propensity and Headroom Trajectory for addressable missions is positive for online – consideration has increased (+5-6%pts) while postal share is stable (+0-1%pts) Change in Mix of Card Purchase Volumes by Channel and Time to Card Delivery1,2 100% 100% Last-minute 16% 12% V
Slide 34: View of online headroom: penetration and share of wallet
UK Online Card Purchasing Propensity and Headroom We have built a view of online headroom that considers both online penetration and share of wallet opportunity Approach to Headroom UK Market Volume – Split by Customer and Channel 806m 1 Sources of online headroom Penetration: Conversion of offlin
Slide 35: Addressable barriers to online for offline card purchasers
UK Behaviour: Propensity & Headroom 1 Penetration While many physical shoppers have habitual / experience preferences for offline shopping, c. 30% of their barriers appear addressable Online Barriers for Offline Card Purchasers1 Main Reasons for No Online Purchases L12M, Market By Age Group Addressa
Slide 36: Consumers pick cards on multiple parameters beyond price
UK Behaviour: Propensity & Headroom 1 Penetration Most consumers pick their card based on multiple parameters beyond just price itself Consumer Attitudes to Price N=2,004 34% 23% 21% 11% 6% 6% I buy the cheapest Price is the most Price is just one of Price is important Greeting cards are I don’t eve
Slide 37: Material online buyer penetration headroom remains
UK Behaviour: Propensity & Headroom 1 Penetration Best view is that there remains material online buyer penetration headroom potential in the online cards market in the longer-term Online Buyer Penetration Potential (% of Card Purchasers who buy 1+ Item Online) Online Shoppers Offline Only 2019 34%
Slide 38: Over 50% of barriers to higher online share of wallet addressable
UK Behaviour: Propensity & Headroom 2 Share of Wallet For existing online customers, over 50% of barriers to higher online SoW appear addressable, particularly around convenience Online Last Purchase Barriers for Online Card Purchasers L12M1 Main Reasons Last Purchase In-Store, Market By Age Group A
Slide 39: Headroom on online cards per buyer
UK Behaviour: Propensity & Headroom 2 Share of Wallet Breakdown of customer purchase missions & declared barriers to online shopping indicates further headroom on online cards per buyer Online Cards per Online Buyer Potential 2019 3.3 Historical Share1,2 Covid 2020 3.5 Peak Peak Covid online cards p
Slide 40: Full potential of current online propositions ~200-220m single cards
UK Online Card Purchasing Propensity and Headroom The full potential of current online propositions is ~200-220m single cards, equivalent to ~5x of current online singles volume Online Headroom Potential Not to Scale Cards per Online Buyer (Share of Wallet - SOW) 19.1 UK Singles Market Total Market
Slide 41: Central case projects c1-2% value growth in singles cards market
UK Online Card Purchasing Propensity and Headroom Looking forwards, central case projects c1-2% value growth in singles cards market – with online channel growing c9% CAGR 24-27 UK Singles Greeting Cards Market by Channel, 2016-27E (£m) Project volume declines by c1% pa; with ASP growth of 2-3% driv
Slide 42: Online share projected to rise to c19-20% by 2027
UK Online Card Purchasing Propensity and Headroom Online share of singles card market projected to rise to c19-20% by 2027 – up from 15% in 2023 In H2 2023 channel stops UK Singles Greeting Cards Market Share of Value by Channel, 2016-27E (%) lapping COVID tailwinds, resulting in volume decline in H
Slide 43: Moonpig has consistently gained share among online specialists
UK Online Card Purchasing Propensity and Headroom Against online card specialists, Moonpig has consistently gained market share Moonpig Share of Online Sales by Greetings Card Specialists 1, 2019-23 (% of total online card specialist sales) 11.9% 10.1% 8.6% 8.2% Other specialists 13.3% 10.1% 9.7% Th
Slide 44: Agenda
Agenda Card Market Country Overview UK Greetings Card Purchasing Behaviour and Resilience UK Online Card Purchasing Propensity and Headroom Netherland Card Market and Online Buying Behaviour Card Attached Gifting in the UK UK Experience Gifting | © OC&C Strategy Consultants 2024 44 44
Slide 45: NL singles cards market worth c£300m
NL Card Market and Online Buying Behaviour NL singles cards market worth c£300m - with online segment worth c£61m in 2023 Estimated NL Greeting Cards Market by Segment, 2016-23 (£m) Projections shown at constant 2023 exchange rate +1.5% +1.9% +6.3% -13.4% 309 302 +9.7% 304 290 296 285 286 261 201 23
Slide 46: Netherlands market followed similar trajectory to the UK
NL Card Market and Online Buying Behaviour The Netherlands greeting cards market has followed a similar trajectory to the UK, with value growth driven via ASP Key Market Drivers, 2019-23 (£m / M units / £) Value Volume ASP +1% -3% +4% £302m £304m £309m 137m £2.6 £2.5 £286m £2.3 123m 124m 120m £261m
Slide 47: NL cards usage and penetration lower than UK
NL Card Market and Online Buying Behaviour NL cards usage & penetration is lower vs. the UK Key Usage Metrics vs. UK Cards Penetration1 Cards per Buyer2 -13%pts -33% 77% 19 65% 13 Adult Card UK NL UK NL Giving Population 42m 9m 1. Q2.1: “Which of the following have you bought in the last 12 months?”
Slide 48: Future NL greeting card market growth of 1-2%
NL Card Market and Online Buying Behaviour Best view of future NL greeting card market growth suggests reversion to trend 1-2% positive a growth - online share projected to have modest gains in 2024 Estimated NL Greeting Cards Market by Segment, 2016-27 (£m) Projections shown at constant 2023 exchan
Slide 49: Greetz has c.65% share of online card revenue in NL
NL Card Market and Online Buying Behaviour Among the largest three online card players, Greetz has a c.65% share of online card revenue in NL Online Sales of Major Specialist Greetings Card Players in NL – 2023E Share of Leading Online Specialist Card Players, 2021-23E Largest 3 online card players
Slide 50: Agenda
Agenda Card Market Country Overview UK Greetings Card Purchasing Behaviour and Resilience UK Online Card Purchasing Propensity and Headroom Netherland Card Market and Online Buying Behaviour Card Attached Gifting in the UK UK Experience Gifting | © OC&C Strategy Consultants 2024 50 50
Slide 51: Attachment of gifts/cash to cards is c63%
Card Attached Gifting in the UK Attachment of gifts/cash to cards is c63% with gift attachments increasing the addressable wallet by ~15x vs card alone Card / Gift Attachment Gift Attachment to Card Purchase1 Average Value of Online Card & Gift2,3 % of Card Purchases with gift attached, last purchas
Slide 52: c.12% of gift-attaching buyers choose a card-first retailer
Card Attached Gifting in the UK Of the c.58% of online card buyers who attach gifts, c. 12% choose a card- first retailer to fulfil both the gift and card Online Gift & Card Purchase Journey Last Channel Online Buyers (N=586) % Respondents Gift Purchases1 Retailer for Gift Purchase1 Retailer Choice
Slide 53: Agenda
Agenda Card Market Country Overview UK Greetings Card Purchasing Behaviour and Resilience UK Online Card Purchasing Propensity and Headroom Netherland Card Market and Online Buying Behaviour Card Attached Gifting in the UK UK Experience Gifting | © OC&C Strategy Consultants 2024 53 53
Slide 54: Experiences represent c£6.5bn of the UK gifting market
Experience Gifting UK The Gifting market is worth £50bn today – of which Experiences represents c£6.5bn of spend, c£270m of which served via Experience Aggregators Gift Experience Market Size 2023 and Definition Total value of all UK gifting Total UK Includes gifting of products, experiences and
Slide 55: Experience gifting growing faster than overall gifting
Experience Gifting UK Historical trend has been experiences gifting growing faster than overall gifting – with experience aggregators growing faster Gift Experience Market Size 2023 Estimated 2015-2019 Growth Rates (pre-COVID) Total Non-Grocery Total UK Product Spend c.2-3% Gifting Spend1 £50bn Tota
Slide 56: Experience gifting growing c.7% pa pre-Covid
Experience Gifting UK Experience Gifting growing at c.7% pa pre-Covid – with 2022 sales back near to 2019 levels - but market sales dipped by 5% in 23 given consumer squeeze Experience Gifting Market Size 2015-2023 (£bn)1 H1 CY22 had relatively strong growth Consumer spending squeeze from and was st
Slide 57: Outlook for experience gifting: long term growth 7% per annum
Experience Gifting UK Outlook for Experience Gifting suggests long term growth in spend 7% per annum, but modest growth outlook for 2024 Experience Gifting Market Size 2015-2027F (£bn)1 Outlook 2024 likely to be a year of more 6% stability and modest (but not strong) -5% recovery 11% 7-8% 8.1 – In
Slide 58: Experience aggregators segment 27% larger than pre-COVID
Experience Gifting UK Best view suggests experience aggregators segment revenue in 2022 was 27% larger than pre-COVID (ie 2019) – but fell by 5% over 22-23 with consumer income squeeze OC&C view that Experience Aggregator segment sent for long term growth at high Experience Aggregators Segment Size