Incentive - April 2009 - (Page 22)

Incentive’s 4th Annual Gift Card Roundtable Moderated by Alex Palmer Incentive recently sat down with members of the incentive gift card industry to discuss what challenges and opportunities they are seeing during this troubling period for Corporate America. The participants—who included representatives from a number of major brands and recognized names in the Alex Palmer: We will start with the issue that is on everybody’s mind: The economy. From your individual perspectives, what is the main challenge for the incentive gift card industry? Andrew Dodge: I see that one of the biggest challenges right now is perception and what is happening in the retail world. There are two big things making news: layoffs and retailers that are floundering for a variety of reasons. They are floundering because the market is bad and because a lot of retailers that have taken a lot of debt are really struggling. I have tried to support the positive things that are going on, but frankly there is such a wave of negativity that people keep hearing about the market being in the tank and that the national retailers are just really struggling. That has spilled over to a challenging perception for gift card segment—offered insight into how they are maintaining their strong brands, what the biggest challenges facing the market are, and where they see potential for future growth. Below are highlights from the discussion; the full transcript and audio are available at incentivemag.com/giftcardrt2009. heard this,” so I am out there waving the flag that all of my retailers’ financials are doing fine, and I am sending out more data on company information, which is helping. Dan Horne: What we have to realize is that as an industry, despite the fact that there are a lot of individual companies out there doing well or poorly, the industry as a whole gets a reputation. The fact that Home Depot is very strong because it is not highly leveraged does not get through to the average consumer. People on Wall Street may understand, but the average consumer does not realize that and not even the corporate buyers comprehend that concept, because the industry as a whole does not react. We are all subject to the winds of the market and when something happens like a Q gift cards especially through the fourth quarter [of 2008]. Nathan Ehrlich: We at Home Depot went through a difficult time recently; we were on the news, and we right-sized the company by about 7,000 employees. We are a very, very strong company. Financially we are sound and cash-flow is terrific; we have extremely small debt. But getting back to that word “perception,” because we let people go to get the company to the right size for the amount of volume we are doing, there is a perception that maybe we are weak, and that is far from the truth. Rich Killian: Instead of just selling my brands, now I am also selling their financials. I’ll hear, “Rich, we do not want to work with certain retailers because we have 22 | Incentive | April 2009 | incentivemag.com http://www.incentivemag.com/giftcardrt2009 http://www.incentivemag.com

Table of Contents for the Digital Edition of Incentive - April 2009

Incentive - April 2009
Contents
Editor’s Note: Speak Out!
Headlines
Cover Story: Penn Mutual Stands By Its Incentives
Defending Incentives
Primer: Merchandise 101
Employee Contracts Work
Gift Card Roundtable
Incentive Strategies
Endo Pharmaceuticals
Travel News: Where To Go
Caribbean: Idyllic Deals
Cruises: Value Ahoy!
Potentials: Here and Now
Cameras: Smart and Active
Merchandise IQ Survey
Incentive Merchandise Buyer’s Guide

Incentive - April 2009