Incentive - December 2009 - (Page 12)

Online Extra Online Extra Merch Meet-Up INCENTIVEMAG.COM/SUMMIT Loyalty Tag Teams INCENTIVEMAG.COM/COALITION A small group of incentive and promo-product leaders break down 2010 industry issues Some say the U.S. is ripe for coalition loyalty programs involving multiple brands Retailers Knock Down Barriers to Gift Card Use They are merging cards with loyalty programs and creating electronic redemption methods By Donna M. Airoldi he general consensus is that gift card sales will be down this holiday season, and one report contends the gift card market is in a rut [Nov. issue, p. 45]. But that doesn’t mean there aren’t any bright spots and innovations on the horizon. Transaction processor First Data Corp., based in Atlanta, in a trends and forecast report, says overall sales and redemption rates for the combined categories of grocery, specialty retail, casual dining, and quick-service restaurants held steady in 2009 (based on data through September). Specialty retail showed the biggest increase in both reloads and redemptions, going from negative 26 percent in March to positive 6.2 percent in September. First Data says this holiday season: • More merchants will use their gift cards as an incentive to drive sales. Last holiday season, more merchants than ever included a free gift card with the purchase of merchandise or a gift card • More merchants will provide full “gifting solutions,” including creative packaging • With reloading and loyalty programs gaining traction, innovative merchants will leverage their cardholder information to T target customers with incentives that will encourage shopping at their stores. “Overall, we’re seeing a convergence of loyalty and gift cards,” says Jim Contardi, senior vice president of First Data’s prepaid division. “Starbucks merged the features and benefits of its rewards card with its gold card loyalty program. You’re going to see other companies do the same, and reorient toward spend cards. You receive the card as a gift, but it becomes a spend card when you reload.” There’s also a continued evolution of how gift cards are marketed, says Contardi. “Carriers are becoming part of the gifting experience and cross-marketing with other products,” he says. “Say you have a handheld gaming device you’re looking to sell at the counter, where you also sell gift cards used to buy games for that handheld device. Grandma walks in and buys the device and the gift card so that her grandson can get games. Odds are he will spend more than the value of the card.” Also, First Data expects increased use of new form factors, e.g., stickers, key chains, and lapel pins, for making purchases. “By inserting an RFID chip in a product, that item becomes a payment device in front of a reader,” Contardi says. “This is growing, particularly with private-label gift cards. A more advanced form factor debuted last month: an iPhone application that allows bar codes to be scanned from the smart phone. For incentive programs, this means a new method of delivering rewards, especially for on-the-spot or micro awards. “The incentive could be delivered electronically—all of a sudden, a participant has a virtual wallet in her smart phone,” says Contardi. “It can be populated with funds, points, or certificates, along with messages to the recipient.” 12 | Incentive | December 2009 |

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

Incentive - December 2009
Editor’s Note: The Age of Friending
Cover Story: Social Media Can Engage Employees
Original Research: 2009 Corporate Gift IQ
Potentials: Here and Now
Travel News: Where to Go and How to Get There
Strategies: Morale-Boosting Leadership
Primer: Social Networking and Incentive Programs

Incentive - December 2009