Stores Magazine - November 2007 - (Page 28) EXECUTIVE SUITE / GIFT CARDS Smarter Cards Retailers add content – and value – to gift cards BY LEN LEWIS he next weapon in the war for retail differentiation may not be traditional advertising, marketing, merchandising, pricing or product selection. Instead, value-added or content-rich gift cards could revolutionize retail sales. T Already a $76 billion business worldwide, sales of pre-paid cards continue to grow exponentially as more consumers accept them as a valued gift option, rather than as a gift of last resort. Moreover, the card business is growing at an annual rate of between 10 and 20 percent, according to some estimates. Traditional cards may soon mature, however: optical or digital cards that double as DVDs, CDs and even videogames represent the next level of thinking and a huge new opportunity to increase sales. “As the home improvement industry In general, the matured, it became more of a share more value you can game,” says Manish Shrivastava, presiprovide customers dent of Home Depot Incentives, which at minimal cost, the has launched a cutting edge gift card more cards you can containing “How-to” demos. “We need reasons for the consumer to turn sell and the more left instead of right, and this is a perfect you can increase fit for our brand.” your store traffic. The move by Home Depot — Andrew Buss and retailers like Best Buy and Circuit City is part of a natural evolution, according to observers. “Five years ago, the market was booming and you could just throw a gift card out there,” says Dan Horne, an associate professor at Providence (R.I.) College and the director of research and board member of Giftex, a U.K.-based card information and analysis firm. “With everyone in the game, it’s a matter of how to differentiate one from another and content is a great way to do it.” While the content-rich card business is still in its infancy, a variety of retailers, marketers, “ ” sports teams and associations have already jumped on the idea of a card that can be popped into a computer drive, a videogame system such as Xbox and Playstation or a freestanding CD or DVD player. In the U.K., the wildly popular soccer club Manchester United mailed out DVD-readable postcards containing screensavers and other materials designed to get season ticket holders to sign up. A similar strategy was used by the U.S. Tennis Association, as well as to sell tickets for the Indianapolis 500. Last year, Circuit City became the first U.S. retailer to sell a gift card bearing content. One included music, TV commercials and a videogame; another had trailers from the latest “Pirates of the Caribbean” movie and was produced by Disney and Serious, a New Yorkbased media and technology company that is in the forefront of optical card marketing and development. SpongeBob card Best Buy has also produced several contentbearing cards, and last year was very successful with a SpongeBob SquarePants card that was also a DVD-ROM containing music WWW.STORES.ORG 28 STORES / NOVEMBER 2007 http://WWW.STORES.ORG
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