Incentive - February 2009 - (Page 50) THE PACK LEADER OF he Incentive Gift Card Council (IGCC), a strategic industry group within the Incentive Marketing Association, educates the B2B arena about the benefits of using gift cards in their incentive programs. Heading up the organization in 2009 is Andrew Dodge, senior manager, national accounts for L.L. Bean Direct to Business. Dodge manages an outbound sales team responsible for developing outfitting, gift and incentive programs with corporate America. Additionally, Dodge manages the national distribution of L.L. Bean’s third-party gift card program. Over five years, he and his team doubled the size of L.L. Bean’s corporate business. Dodge’s experience with incentive markets began in the mid1990s when he worked for promotional firms Brown and Bigelow and Cyrk. In 1998, he moved from his home state of Rhode Island to Dodgeville, Wis., to start up the national account team at Lands’ End. As national sales manager with their Business Outfitters division, he developed corporate programs with a field sales team and launched custom Web stores that resulted in $40 million worth of new sales in five years. Dodge recently spoke with Incentive about the state of gift cards in the industry and struggling retail landscape as well as their future prospects. Incentive: What are some of the gift card issues that users need to consider in the current recession, and how do they deal with them? Dodge: Gift cards, as with all areas of the economy, have been affected with the downturn. But retailers and performance improvement companies report that the demand for gift cards in incentive programs continues to be strong. In fact, most retailers report that their 2008 B2B gift card sales were flat or slightly up. Given the state of the economy, we’re viewing these results as positive. Early ‘post-holiday’ reporting is suggesting that gift cards sold at retail were down roughly 10 percent to 2007 levels. All in all, 2008 was a decent year for gift cards and incentive pro- lace s in the marketp state of gift card eys the card council surv the incentive gift t of the new presiden T grams. It wasn’t great, but okay given the economic climate we’re all managing through. Also, the media continued to report on issues concerning gift cards. There are two important messages here: First, gift cards enjoy high consumer acceptance and are among the most favored product in reward and incentive programs. Second, media reports have focused primarily on retailer bankruptcies. The IGCC recommends that consumers and incentive program participants pay attention to these announcements. Perhaps most importantly, retailers want their gift cards to be redeemed so that consumers are engaged with their brand. Incentive: How can companies that use gift cards combat the negative press? Dodge: It is important to remind folks that the news is not all bad. If you hear about a 300-store chain that is closing 30 stores, there is likely a very good rationale for doing that. Proactive and financially healthy companies began to reduce expenses last year and will need to continue this pattern in 2009. It doesn’t necessarily mean they are performing poorly. It may be that they’re managing their finances more responsibly. There was more negative press through the fourth quarter on gift cards than was necessary. There was widespread e-mail spam distributed in fall 2008 concerning the health of some retailers that was confusing and inaccurate. Incentive: How are people using gift cards now in light of the recession and retail bankruptcies? Are they turning to bankissued cards for flexibility despite their fees and expiration dates, or choosing incentive gift cards for necessities like food and gas? Dodge: ‘Open loop’ bank card products are popular across a variety of categories due to consumer acceptance and ease of spending. This includes ‘trophy value’ redemptions, such as a flat-panel TV, travel to a special destination or a new household product. Bank cards are also utilized for everyday ‘necessity items’ and for subsidizing high-school and college-bound kids. The IGCC is planning to conduct research in 2009 to explore trends, especially during these tough economic times. Our goal is to identify and deliver gift card issuance and redemption data specific 50 INCENTIVE FEBRUARY 2009 | SPECIAL ADVERTISING SECTION
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