Stores Magazine - November 2007 - (Page 30) EXECUTIVE SUITE / GIFT CARDS Shrivastava describes DVD cards as a “perfect fit for the brand.” videos and interactive games. (It is now selling as a collectible on eBay.) Home Depot isn’t interested in producing collectibles; to Home Depot, the DVD card represents a powerful new promotional tool and revenue stream. Each card contains threeto five-minute videos on seven different do-it-yourself projects, such as painting basics, hanging ceiling fans and installing faucets, which can be played on Windows or Mac platforms or videogame systems. “We recently launched myriad regular know-how videos, and the ones that addressed top consumer needs were the ones we placed on the DVD card,” Shrivastava says, noting that the cards represent another way for consumers to “live with the brand on an ongoing basis.” Branded products are integrated into the video spots, albeit unintentionally. “They just happen to be the brands that fit the message,” he says. The DVD cards are being promoted in-store and through some of Home Depot’s traditional marketing channels. Beginning this month, Home Depot “will have a 360-degree marketing campaign and we expect a strong response on the part of consumers,” Shrivastava says. “In fact, based on preliminary feedback, this will be one of our best sellers.” While content cards have yet to hit the mass market in a big way, a number of companies are working on them, according to Bruce Bower, senior vice president, international, for Blackhawk Network, the gift card subsidiary of Safeway that supplies cards to 73,000 stores. “A teaser on a card gives it more value than just something that can be redeemed -- even better when it doesn’t cost consumers anything extra,” he says. “Five or six years ago, the big way to sell videogames was to sell a disc with one level on it: if you wanted to go beyond that, you’d have to get a code to unlock it. I could see that in a gift card and, if I were a marketer that might be the approach I’d use.” Terry Llachs, group vice president of marketing and head of corporate public relations for Blackhawk, believes the industry will “see more tests in this area over the next year or two.” Blackhawk, for instance, “has all these sports cards, and they would marry very well to content like video clips and statistics,” she says. Andrew Buss, a director of Stamford, Conn.-based Archstone Consulting, believes that cards with additional content are a great innovation -- but he is already looking at the com30 STORES / NOVEMBER 2007 ing evolution. “Maybe if someone buys a spa card, they can also get a limo ride to the spa,” he says. “The question is the cost of these innovations. Incremental value might change the pricing structure, but in general, the more value you can provide customers at minimal cost, the more cards you can sell and the more you can increase your store traffic.” The next level of card marketing may involve cell phones. “It’s already available in Japan and Korea, where people are using their phones as mobile wallets,” Buss says. “Right now, the most innovative stuff [in the United States] is the DVD card, but we’re not far from moving past that and perhaps using RFID technology to load all gift cards into a person’s phone. “Consumers don’t care about having the plastic,” he says. “They want functionality that doesn’t cost them anything.” StORES Len Lewis is a veteran retail industry journalist and commentator and the editorial director of Lewis Communications. Stacking the Deck Gift card programs become more creative, lucrative BY PATRICIA A. MURPHY C redit card usage may be maxing out as more Americans reach into their wallets for alternatives like gift and other prepaid card products. Indeed, gift cards are fast becoming a mainstay of the payments landscape. Javelin Strategy & Research, a San Francisco-based financial services research firm, predicts that within five years 30 percent of Americans will be using alternatives to traditional credit cards -- gift and other types of pre-paid cards -- for purchases at online stores. That’s up from an estimated 14 percent of online transactions this year. “Although it took nearly a decade for alternative payment methods to secure their position in the online world, it’s apparent that everyday consumers are ready to view them as a trusted and viable way to buy online,” says Bruce Cundiff, senior analyst at Javelin. “Given the recent online surge, we expect to see some of these trends transfer to offline buying over time.” What will this mean for the upcoming holiday buying season? Whopping year-over-year increases in gift card purchases, if predictions from Stamford, Conn.-based Archstone ConWWW.STORES.ORG http://WWW.STORES.ORG
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