Stores Magazine - November 2007 - (Page 31) sulting prove accurate. Based on responses to its 2007 Holiday Gift Card Survey, Archstone projects purchases will reach $35 billion this holiday season; consumers spent $24.81 billion on holiday gift cards last year, according to NRF’s 2006 Gift Card Survey (results of NRF’s 2007 Gift Card Survey will be released November 13). The Archstone survey, which queried a cross section of web shoppers, also reveals that approximately 56 percent of all holiday gift cards will be redeemed within a month of receipt. Therefore, “retailers that alter first-quarter pricing strategies to take advantage of the prevalence of gift cards will capture more margin in January, traditionally a month of clearance markdowns,” says Michael Unger, director of Archstone’s consumer products and retail practice. While data varies by industry, experts agree that gift cards drive merchant revenues, al- cards branded by other retailers and earning a commission on each card sold. “Gift cards represent a nice chunk of change for third-party aggregators,” says Doug Dwyre, senior vice president for pre-paid and loyalty products at First Data. On the spend side, First Data research indicates that gift card recipients spend, on average, 30 percent more than the value on the cards gifted them. In addition to the basic technological underpinnings, First Data supports clients with extensive merchandising and marketing support. “Retailers are becoming a lot more strategic about gift cards,” Dwyre says. They’re not just looking for plain vanilla programs. “Those who are most successful are the ones who merchandise and promote these programs.” 2007 Holiday Gift Cards $35 billion* * Archstone Consulting estimate 56% of online shoppers will redeem holiday gift cards within a month of receipt lowing retailers “to get a boost in holiday sales and extend the season,” says Jane Cannon, chief technology officer at MICROS-Retail, which provides POS and related technologies to retailers. Retailers as aggregators Many retailers are opting to become aggregators – selling gift WWW.STORES.ORG Case in point: Giant Eagle. Bill Ruehl fancies himself quite the bargain shopper, but even he was astonished when a recent spending spree at his Frederick, Md., supermarket translated into big savings the next time he went in for a gasoline fill-up. “I was able to purchase $80 worth of gas at a cost to me of about $15,” he boasts. The savings accrued from fuelperks!, a program that rewards users of the Giant Eagle Advantage Card with 10-cents-pergallon fuel credits for every $50 a cardholder spends at Giant Eagle supermarkets and GetGo convenience stores. Ruehl says he was able to pile up the perks over the course of about two weeks by purchasing Home Depot and restaurant gift cards at his local Giant Eagle. Programs like these make the loyalty card “an even more StORES powerful tool for retailers,” Cannon says. Patricia A. Murphy, a Maryland-based writer specializing in payments and technology, is president of The Takoma Group (www.takomagroup.com). STORES / NOVEMBER 2007 31 http://www.takomagroup.com http://WWW.STORES.ORG
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