Moonpig says the scale of its UK business has enabled the card and gifting brand to adopt an ‘always on’ approach to above the line marketing. This is compared to a “previous concentration” of marketing activity during peak trading periods.
Choosing to invest in marketing to “underpin awareness”, the focus has been on new customer acquisition in the brand’s first full year since its 2021 IPO. Moonpig says its marketing strategy has “remained effective following the end of lockdown”, driving higher revenue from new customers than pre-pandemic.
On a two-year basis, group revenue for the year to 30 April rose 75.8% to £304.3m, reflecting “significant growth” in the customer base, higher purchase frequency and a further increase in gifting. However, year on year revenue is down 17.3%, reflective of a comparison to periods of severe lockdown restrictions in 2021, which benefitted the online card and gifting brand.
Over the year Moonpig delivered 39.8 million orders, down from 50.9 million in 2021, but up from 24.3 million in 2020. The app now represents more than 43% of Moonpig orders, compared to 37% in 2021 and 16% in 2020.
Moonpig hails ‘strong’ marketing performance despite revenue dip
The business also began trialling subscription service Moonpig Plus, which offers discounts and benefits in return for an annual fee. Currently only available to a small proportion of customers, the intention is to test different variants over time to determine the proposition and pricing structure best suited to promoting customer purchase frequency and lifetime value.
The brand says its “consistently strong” marketing performance over the year has it to acquire new customers enabled at a faster rate than pre-Covid.
The business points to a “relentless focus” on creating and sustaining long-term customer relationships, based on insights from first-party data, which have led to an “enduring step up” in customer loyalty over the past year. Describing retention as “very high”, 87% of total group revenue was derived from existing customers, compared to 75% in 2021 and 79% in 2020.
Moonpig says success in engaging customers and “encouraging them deeper” into its data-driven ecosystem enabled the brand to “extend its leadership position” in UK online cards. The company reports its market share in the 2021 calendar year is 4.4x larger than that of its nearest online competitor.
The brand claims to be progressing towards offering “hyper-personalised” customer journeys, including personalized landing pages for customers who click on a reminder, upcoming occasion reminders on the homepage and personalized search results.
Moonpig has also launched a personalized promotions engine providing targeted offers to incentivise first-time use of the app and personalized offers on the basket page allowing customers to attach a gift before finalizing their order.
The business claims its algorithms were optimized across 230 million cumulative transactions as of 30 April, compared to 190 million in April 2021, helping Moonpig capture “more than four times” the additional customer data than its nearest competitor.
The brand also claims to have grown its database of calendar reminders, which it sees as key to customer retention, to more than 70 million as of 30 April, versus 50 million in April 2021.
To fuel this digital push, Moonpig has grown the number of data scientists, analysts and engineers in the business to 195, from 153 in 2021.
Why Moonpig revived its brand mascot
In addition, the company is looking ahead to its proposed £124m acquisition of UK gift experience platform Buyagift, which Moonpig says will “deliver a step-change” in its gifting proposition. Over the year gifting reached its highest ever share of total revenue at 48%, reflecting what Moonpig describes as “further progress” in its strategy to become the ultimate gifting companion.
Over the year Moonpig launched 500 new branded gifting SKUs (stock keeping units) and rolled out a UK jewelry range. Compared to 2020, the company has increased the number of licensed brands it works with by 116%.
Diversification into new product lines has been backed by the launch of new packaging across the gifting range, as well as premium packaging for higher price point purchases. The brand believes the new “unboxing journey” will help its products stand out and promote “viral customer base growth”.
Within the past 12 months, Moonpig has also revived its pig mascot after a four-year hiatus in a bid to reunite the original icons of the brand. Speaking to Marketing Week at the time, CMO Kristof Fahy described the new piglet mascot as an “incredible brand asset” sitting alongside the brand’s unique name, strong pink color and jingle.
CEO Nickyl Raithatha describes the year as a “transformational period” for the group financially, operationally and strategically, adding that Moonpig has “significantly outperformed” the targets set out during its IPO. Raithatha also points to a “step-change” in the size of the customer base, with each customer “purchasing more often than before.”