New York—Seventy-four percent of responding business professionals reached by b-to-b media and live events are involved in purchasing decisions or supplier selections, according to American Business Media’s “Value of B-to-B” report, released Wednesday.

Of those, 87% use industry-related websites when researching such decisions; 65% use print magazines; 58% use industry conferences and trade shows; and 55% use e-newsletters.

The study also found that 74% of respondents used both digital and traditional media to learn best practices and gain information for their work, and 68% spend more time with industry-related print publications than with mainstream business or consumer publications.

Almost half of marketers surveyed expected to increase b-to-b advertising budgets over the next 12 months: 45% said budgets will increase somewhat while 3% said they will increase considerably.

The “Value of B-to-B” report was based on 6,682 responses from business professionals, 74 marketers and 111 business publishers. Three separate online surveys were conducted by Readex Research during March and April. The full report, with 30 pages of analysis and 380 pages of tabulated results, is now available for download at ABM’s website (abmassociation.com).

Originally posted on: 8/1/13

FILED UNDER:

American Business Media

EXECUTIVE SUMMARY

The Southern African-German Chamber of Commerce and Industry (SAGCC) conducted a 

survey of European enterprises in South Africa in the period February-June 2013. The 

survey includes member companies and other enterprises active in the South African 

market. The following participated in the survey:

 Austria : 13 companies,

 Denmark : 6 companies,

 Finland : 3 companies,

 France : 22 companies,

 Germany : 95 companies,

 Italy : 9 companies,

 Netherlands : 15 companies and

 Sweden : 1 company.

The total number of completed and returned surveys stands at 163. The below mentioned 

results refer to previous surveys, predominantly among members of the SAGCC, conducted 

biannually since 1993.

 The perception of the current economic climate has declined from +31 points in 2010 

to 

-35 points in 2013. About twice as many companies regard the climate as “bad” when 

compared to the previous survey. This has constrained decisions on new investments 

and job creations.

 The general political and economic climate is regarded as “continuously bad” or even 

“declining”.

 Concerns about Broad-Based Black Economic Empowerment have increased since 

2010. More than 60% of the respondents view B-BBEE as a costly exercise with no 

tangible benefits for their day-to-day businesses. 

 Respondents underline the lack of competence of the civil service (78% of negative 

opinions) and about the excessively high level of corruption (seen by 87% as 

“pessimistic” or “very pessimistic”).

 Violence and crime, labour conditions, productivity levels and electricity prices have also 

been growingly affecting the investment and business climates lately.

The SAGCC Index is an important tool in the analysis and portrayal of the current economic 

situation, and is interpreted in a manner similar to the “IFO Business Climate Index”. 

Based on the current trend, the SAGCC index will soon reach the level of 1998 (-57, data of 

members of the SAGCC only), its lowest point in 14 years. 

It must be noted that the survey did not take place under any specific political or economic 

circumstances, which could have influenced the results

Opening its own brick-and-mortar retail stores could help Google sell more of its Chromebooks, Nexus tablets and other hardware, analysts said Friday, reacting to online reports that Google may soon be coming to the local shopping mall.

Google is in the process of building its own retail stores and hopes to have the first stores open in time for the holidays in major U.S. metropolitan areas, according to a report Friday in 9to5Google, which cited an unnamed, “extremely reliable” source.

“Google feels right now that many potential customers need to get hands-on experience with its products before they are willing to purchase,” the website reported.

Google’s Android is already the dominant mobile operating system for smartphones, but the company is trying to make greater inroads with its laptop computers, known as Chromebooks, and its Nexus tablets.

The company is also developing Google Glass, a head-mounted augmented reality system that people would wear to give them real-time information throughout the day. And Google now owns Motorola’s handset business.

Online, Google’s products are currently sold through its Play digital storefront and through Amazon and some other retailers. Some products can also be bought in pop-up or smaller stores within Best Buy and Staples.

But having its own retail stores could increase consumer awareness around its growing line of physical products and potentially increase sales, analysts say.

“I wouldn’t put it past Google to do this,” said Ben Bajarin, principal analyst with Silicon Valley-based Creative Strategies.

Regardless of whether the products are actually bought in the store, the strategy could help demonstrate their value, he said. Google’s mobile devices are not pushed in physical stores like Best Buy as effectively as they should be, he said. “The stores’ sales teams push different products different weeks,” he said.

“Google does not have as many products as Apple, but it has enough to justify a physical retail presence,” agreed Greg Sterling, senior analyst with Opus Research.

Even if consumers don’t buy the product on the spot, they could get a better feel for it in a physical store staffed by Google employees than they could by reading about it online, Sterling said, especially for a cutting-edge product like Glass.

But Google will have to think carefully about its approach. After all, Gateway went the retail route to sell its personal computers and accessories, “but that largely failed,” Sterling noted.

 

http://www.networkworld.com/news/2013/021613-google-retail-stores-could-be-266787.html

(Reuters) – Michael Dell struck a deal to take Dell Inc private for $24.4 billion in the biggest leveraged buyout since the financial crisis, partnering with the Silver Lake private equity firm and Microsoft Corp to try to turn around the struggling computer company without Wall Street scrutiny.

The deal, which requires approval from a majority of shareholders excluding Dell himself, would end a 24-year run on public markets for a company that was conceived in a college dorm room and quickly rose to the top of the global personal computer business – only to be rendered an also-ran over the past decade as PC prices crumbled and customers moved to tablets and smartphones.

Dell executives said on Tuesday that the company will stick to a strategy of expanding its software and services offerings for large companies, with the goal of becoming a full-service provider of corporate computing services in the mold of the highly profitable IBM. They played down speculation that Dell might spin off the low-margin PC business on which it made its name.

Dell did not give specifics on what it would do differently as a private entity, angering some shareholders who said they needed more information to determine whether the $13.65-a-share deal price – a 25 percent premium over Dell’s stock price before buyout talks leaked in January – was adequate.

“This feels like the ultimate insider trade. Why weren’t the plans and projections that Michael Dell has going forward been shared with me and other shareholders?” said Frederick “Shad” Rowe, general partner of Greenbrier Partners and a trustee of the $22 billion Texas Employees Retirement System. Rowe said he dumped about 400,000 shares of Dell on Tuesday, adding, “I was so irritated I didn’t want to think about it anymore.

Dell spokesman David Frink said the board had conducted an extensive review of strategic options before agreeing to the buyout to ensure that the best interests of all stockholders were served.

Although Dell shares were trading at more than $18 a year ago, many analysts said they believed the majority of shareholders will accept the buyout because of pessimism over the growth prospects of the PC business.

“A private Dell is likely to more aggressively cut costs, in our view. But we think merely restructuring only postpones the inevitable, creating a value trap,” said Discern Inc analyst Cindy Shaw. “Dell needs to do more than reduce its cost structure. It needs to innovate.”

Dell was regarded as a model of innovation as recently as the early 2000s, pioneering online ordering of custom-configured PCs and working closely with Asian component suppliers and manufacturers to assure rock-bottom production costs. But it missed the big industry shift to tablet computers, smartphones and high-powered consumer electronics such as music players and gaming consoles.

As of 2012’s fourth quarter, Dell’s share of the global PC market had slipped to just above 10 percent from 12.5 percent a year earlier as its shipments dived 20 percent, according to research house IDC.

Some of Dell’s rivals took pot shots at the deal, in unusually pointed comments that reflect how bitter the struggle is in a commoditized PC industry that has wrestled to reverse a decline in sales globally.

Hewlett-Packard Co, which itself has suffered years of turmoil in the face of challenges in the PC business, said in a statement that Dell’s deal would “leave existing customers and innovation at the curb,” and vowed to exploit the opportunity.

Lenovo, which consists largely of the former IBM PC unit, referred to the “distracting financial maneuvers and major strategic shifts” of its rival while emphasizing its own stability and strong financial position.

The deal will be financed with cash and equity from Michael Dell, $1 billion cash from private equity firm Silver Lake, a $2 billion loan from Microsoft Corp, and between $11 billion and $12 billion in debt financing from Bank of America Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets.

The company said Michael Dell will contribute his 16 percent stake in the company but did not say how much cash he would inject. The company will now conduct a 45-day “go-shop” process in which others might make higher offers.

“Though we were hoping for a higher price, we trust that the Dell board has properly done its job by conducting a process open to any third-party offers and reviewing all strategic options,” said Bill Nygren, who manages the $7.3 billion Oakmark Fund and $3.2 billion Oakmark Select Fund, which have a $250 million position in Dell.

“Should we hear evidence to the contrary, we’ll raise a ruckus.”

Sources with knowledge of the matter said Dell’s board, advised by the Boston Consulting Group, had considered everything from a leveraged recapitalization to a breakup of the company before agreeing to the LBO.

Although the deal will load Dell with more debt, some Wall Street analysts said that was relatively low compared to the cash the company generates.

Bernstein Research analyst Toni Sacconaghi said that if Dell were to use 40 percent of its annual cash flow of about $2.5 billion to $3 billion to pay down debt, a sale of the company in about five years could net Silver Lake, Mike Dell and other investors close to $10 billion, or 5 times free cash flow at the time.

Helped by acquisitions, Dell has been building a business selling servers, IT services and other products for corporate clients that – while still dwarfed by IBM’s and HP’s – is growing at a near-10 percent clip. Critics say it will not be easy for Dell to beat IBM and HP in this area, no matter what its corporate structure.

Sales of PCs still make up the majority of Dell’s revenues. Dell said in a regulatory filing that no new job cuts were expected but it indicated more acquisitions down the road. The company has spent $13 billion since fiscal 2008 to acquire more than 20 companies including several large software and services companies as it seeks to reconfigure itself as a broad-based supplier of technology for big companies.

“We recognize this process will take more time,” Chief Financial Officer Brian Gladden told Reuters. “We will have to make investments, and we will have to be patient to implement the strategy. And under a new private company structure, we will have time and flexibility to really pursue and realize the end-to-end solutions strategy.”

Gladden said the company’s strategy would “generally remain the same” after the deal closed, but “we won’t have the scrutiny and limitations associated with operating as a public company.”

Shares of Dell closed 1.1 percent higher at $13.42.

FALL FROM GRACE

Michael Dell returned to the company as CEO in 2007 after a brief hiatus but has been unable to engineer a turnaround thus far. Analysts said Dell could be more nimble as a private company, but it will still have to deal with the same difficult market conditions.

There is little history to suggest whether going private makes such a transition easier. IBM’s famously successful transition from hardware vendor to corporate IT partner took place while it was trading on public markets.

Freescale, formerly the semiconductor division of Motorola, was taken private in 2006 for $17.6 billion by a group of private equity firms including Blackstone Group LP, Carlyle Group and TPG Capital LP. Analysts say the resulting debt load hurt its ability to compete in the capital-intensive chip business. Freescale cut just under 5 percent of its work force last year as it continued to restructure.

Microsoft’s involvement in the Dell deal piqued much speculation about a renewed strategic partnership, but the software company is providing only debt financing and Dell said there were no specific business terms attached to the transaction. Dell has long been loyal to Microsoft’s Windows operating system, which has been at the heart of its PC business since its inception.

Microsoft’s loan will take the form of a 10-year subordinated note with roughly 7 percent to 8 percent interest, a source close to the matter told Reuters.

The Dell deal would be the biggest private equity-backed leveraged buyout since Blackstone Group LP’s takeout of the Hilton Hotels Group in July 2007 for more than $20 billion and is the 11th-largest on record.

The parties expect the transaction to close before the end of Dell’s 2014 second quarter, which ends in July. News of the talks first emerged on January 14, although they reportedly started in the latter part of 2012. Michael Dell had previously acknowledged thinking about going private as far back as 2010.

J.P. Morgan and Evercore Partners were financial advisers, and Debevoise & Plimpton LLP was the legal adviser to the special committee of Dell’s board. Goldman Sachs was financial adviser, and Hogan Lovells was legal adviser to Dell.

Wachtell, Lipton, Rosen & Katz was legal adviser to Michael Dell. BofA Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets were financial advisers to Silver Lake, and Simpson Thacher & Bartlett LLP was its legal adviser. Lazard Ltd advised Microsoft.

(Additional reporting by Aaron Pressman in Boston; Writing by Ben Berkowitz and Edwin Chan; Editing by Tiffany Wu, Leslie Gevirtz and Cynthia Osterman)

Hagen court rules that it must be made clear that clone cartridge products are not remanufactured.

CRN carries the IT Law Kanlai’s Felix Bart’s report on the LG Hagen court’s ruling that a differentiation between cloned and remanufactured cartridges being sold must be made following complaints that wording on clone products can be misleading for consumers and cartridge suppliers.

The court’s decision means that it is prohibited for clone cartridges to be sold or distributed “without pointing out that this is not a remanufactured cartridge but (possibly infringing) newly manufactured replicas of toner cartridges”, stating that any other wording would be “misleading and therefore anti-competitive”. Violation of the ruling could result in a fine of up to €250,000 ($340,000), detention or imprisonment for up to six months.

The court used an example of an ambiguously labelled product, namely “Reusable Toner for HP LaserJet P 2050 Series P 2055”, which it pointed out was misleading due to the mention of the original cartridge. It was noted that it would not be clear to the public whether it was an original or compatible product and would run the risk of the supplier unintentionally misleading their product. Instead, it would be dependant on “the understanding of a reasonably well informed and circumspect consumer and the overall impression of the advertisement”.

Commenting on the court’s ruling, Vincent van Dijk, Director of ETIRA, said: “ETIRA welcomes this decision. We think it’s good for remanufacturers because it again clarifies the difference between rebuilding of OEM cartridges on the one hand, and new-built non-OEM models on the other.

“The judge in Hagen has given a strong warning to companies who sell those polluting new-built patent-infringing cartridges. His message is clear: don’t mess around with the word “remanufacturing”. In Germany, remanufacturing respects OEM patents and does something good for the environment. The Asian new-built cartridges do neither. The judge tells sellers of these products that the public has the right to know that they are at risk when they buy infringing clones.”

Meanwhile, Christian Wernhart, CEO of Swiss remanufacturer Embatex AG, added: “New-built cartridges have often a poor quality because the plastic and the injection moulding is not as good as an empty OEM cartridge.

“We test clones continously and many of them are leaking in the printer or break in the printer while it is printing. That’s the reason why the consumer must know if they are using a high quality remanufactured cartridge or a clone, because most of the consumers do not know the difference, they only know there exists an OEM cartridge and an aftermarket cartridge and we remanufacturers are put in the same pot as the clone producer.”

After The Post Office

It seems like every day now, a new Web poll asks readers whether they think the US Postal Service can survive, now that the magnitude of its financial hole is becoming more obvious to everybody.  Everywhere, the signs of the post office’s demise are evident.  But the slide has been going on for years: the old crusty guys working their beat at a stately pace in town here, the high rates for shipping, the poor (and expensive) tracking, and now the cutbacks in service.

A lot of people blame the unions, with their generous pensions and benefits.  In truth, these guys don’t seem overly anxious to please, as they give you the fish-eye stare while you’re buying stamps, each gesture as measured as a bartender’s in a dusty Western ranch town.  I’ve witnessed arguments among personnel behind the counter while a half dozen people, resigned to their fate, wait patiently in line.

Nonetheless, I will miss the post office when it’s gone.  Whatever replaces it — and it’s likely to be a variety of things — will surely be more efficient.  But somehow, the incipient breakup of the bedrock bond between citizen and postal service makes me a bit sad.

To indulge in the inventory of memories here for a bit, I recall when people wrote letters.  Like many people, I still have most of mine — love letters from girls I once knew; the imposing, outsized brown stationary my father used for a few years when I was a teenager away at school; a record of steady solid notes from grandma, who always sent money with them; missives from crazy pals out roaming the world — but they trail off in the late 1990s and stop abruptly in the mid 2000s, victim to my leading-edge adoption of electronic communications. 

Now, full disclosure here, my grandmother once suggested that I join the post office. Well before I managed to publish anything, I told her I wanted to be a writer.  She was quite practical in her analysis.  Writers don’t get paid much, at least most of them.  So, get a day job that’s not too mentally challenging, and write in the morning before you go off to do your sorting, delivering, or what have you.  As a daughter of early Marxists, she saw nothing wrong with a soft government job for those lacking in ambition or otherwise focused. 

But a practical view of the situation requires traffic analysis.  What is it, exactly that we get in our mailboxes?

Well, first and foremost, it’s a way for the government and legal establishment to get a hold of you, a so-called “fixed address,” an infrastructure requirement of modern civilization.  When that jury summons, subpoena, tax document, or divorce paper is looking for someplace to go, that someplace is your mailbox. 

Except when it isn’t.  Some of these documents are so sensitive that they have to be delivered by hand.  A policemen may have to serve a warrant for someone’s arrest personally.  Certification of delivery is required in certain legal actions.  And subpoenas sent to reluctant witnesses may have to be conveyed directly.

It just so happens that the major package delivery services, UPS and FedEx, do that all the time every day: deliver things to people at their door personally.  It would take some institutional alternations, but these drivers could be empowered to deliver legal documents.  There remains a sticky issue about just how reluctant certain recipients might be, but some jobs could be left to the police, if the bulk were done through the services.  Call it a sweet government contract, it would still probably cost less than the post office, with all its pension obligations and other fixed costs.

And you should see these delivery folks rock on their rounds.  Unlike the post office truck, which I often see parked by the river during the mandatory one-hour lunch break, the UPS driver is literally trying to run me down if I’m merely hitting the speed limit on a local road.  They are all about getting to their next location, product of the difference in incentive systems.

Okay, so what about the love letters?  Not much an issue for me, long-time married guy that I am, but those personal missives that used to cause such longing, what happens to them?  People are still writing on those thin, blue aerogrammes that have been around forever, but that’s mostly back to Ouagadougou.  Here in the connected world, all that love is going through Facebook — or at least email —these days. 

Which brings us to email.  To what degree could the electronic form of mail replace the paper one?  My guess is about 100%.  Even most of those legal documents could go by email. 

Now, it’s true, both my lawyer and my accountant still want paper.  The thing about a paper document is that it came into existence at a particular time.  A stack of paper catalogs a history.  Arguably, archived email, handled the right way, could perform the same function, essentially, a certification that a document was created at a certain time and has not been altered.  But the Internet in general is a great place for history to get rewritten.  Take the updating of Wikipedia, or the mere fact that any arbitrary string of bits can be written, copied, and rewritten with full fidelity.  Electronic certification workarounds notwithstanding, the surety of a paper record is comforting.  Still, even paper documents get forged.

So, what else comes in the ol’ physical box? 

Paper spam?  No need to preserve this institution, although I do feel once in a while — when separating the sheets appropriate for fire starter from the heavily recycled and glossy stock — for the poor salesman who has to call on the actual local supermarket each week to get the specials for the Friday circular.  Yelp, foursquare, and AmazonLocal are all trying to reach the local advertising market, and could over time fill this gap.

Acceptances to college?  Email would do.  It’s probably fair to say that 99% of college applicants already have email addresses that they check every day during the season.

Invitations to events?  OpenTable and similar services, if not an email from the hosting party, could easily take care of that. 

Grandma’s notes?  A videoconference is so much better than letters in this case.  Kids are reluctant to write back to that smelly old person who keeps pestering them.  Old folks sometimes have difficulty seeing, much less holding a pencil and writing, let alone walking to the mailbox or the post office itself.  But a videoconference gives everyone, including the parents, an opportunity to chat for a bit, see non-verbal cues, and visit for a while.  A great improvement.

Still the mailbox can provide an excuse for the housebound to get outside at least once a day, unless that person lives in Manhattan, and then it’s not much of an outing.  Best just take a walk for its own sake.

Birthday cards?  A plethora of online services offer animated gizmos, these days with the sender’s voice, photos, and even video, all much faster than mail, a boon in particular to those inclined to forget these obligations until the last second.

Bill payment?  Set the $0.44 cost of a first class letter — and the potential of late payment — against online banking, which is cheap, reasonably safe, and secure these days, and it’s hard to see why anyone would clutch onto the former. 

Still, paying bills by hand has its charms.  Writing out physical checks keeps the hand muscle memory active.  Who knows when you might need to actually write something?  Like in cursive.  You might want to stay in shape.  And avoiding the electronic banking system does reduce one’s attack profile, something all Internet users should be thinking about.  But many individuals and businesses already use bill payment services provided by many merchants and financial institutions such as Wells Fargo, Chase, Bank of America, and others.

Signing documents, contracts, and agreements?  Services such as DocuSign have already processed hundreds of millions of electronic signatures, and DocuSign’s Ink service, an easy-to-use, free, cloud-based version of its base offering, extends to anyone the ability to sign (with a legally binding signature) and return any document via email.

In home movies?  Netflix, Hulu Plus, and others deliver electronically the most recent movies and television shows for a monthly fee.  One can argue that Reed Hastings, the most hated CEO of the year, planned to deep six physical DVDs all along.

So, summing it up after a nice wander down memory lane, I think we could do without the post office. 

In some cases, high cost services will have to replace certain elements, but in the vast majority of instances, less expensive — and often better — alternatives will replace their current mail-friendly equivalents.  I predict that the shift will be a net benefit to the overall system, despite the loss of jobs for more than a half million postal workers.  I hope they don’t “go postal” on me for saying so.

Disclosure: Endpoint has a consulting relationship with DocuSign.

© 2011 Endpoint Technologies Associates, Inc.  All rights reserved.

Twitter: RogerKay

Source:

http://www.forbes.com/sites/rogerkay/2011/12/15/after-the-post-office/

As an M&A investment banker focused on the e-commerce sector, and creator of the Web-only RetailIndex, a diverse group of constituents have asked me to comment on the macro environment for the office products category and outlook for mobile commerce in particular.

Amazon Supply

On April 23rd Amazon (AMZN), the largest consumer e-commerce site, announced that it intends to shower attention on corporations and business with the launch of AmazonSupply.com, a business-to-business e-commerce site.  One product category targeted in particular is office products.

If stock returns over the past two years (StaplesOffice Depot and OfficeMax down by -35.0%, -62.4% and -73.2% respectively) are predictive of future performance, all eyes are focused on each competitors strategic plans.


Staples Goes all-in with Mobile Commerce

During his keynote address to the Mobile Workshop June 8 at the IRCE 2012, Brian Tilzer, Vice President of Global e-Commerce said, “Mobile is a constantly evolving space and you have to be continually thinking about your next move.”

“More and more shoppers are turning to their mobile devices as a way to research and shop whenever and wherever they want.  Staples is thinking ahead and anticipating customers’ needs, providing an offering that not only serves as an m-commerce tool but listens to, and solves, customers’ pain points.”

To these ends Staples focuses on saving time for small business owners, so they have more of it to dedicate to their businesses.  Time savers incorporated into the latest mobile app include an optimized ink & toner finder, access to Staples Rewards, list building functionality and batch scanning.

Moving forward Brian Tilzer says that, “Staples Velocity Lab in Cambridge, Mass will become home to some of the world’s best e-commerce talent with the goal of rapidly bringing breakthrough new ideas to market in emerging online technologies like mobile commerce and social media”.  Staples expects to the triple the size of its e-commerce team over the next three years.

In regard to why Staples’ strategic plans will set it apart from its competitors, Mr. Tilzer says, “If we focus on the customer good things should be in store (pun intended).”

Facebook’s Problem May be the Real Opportunity

More than half of Facebook’s (FB) users access the social network through a mobile device.  Since the vast majority of revenue currently comes from advertising, the company is focused on how to monetize its mobile offering.

In my opinion Facebook’s problem may be the real opportunity.  Companies that bet big on mobile commerce and don’t focus on helping Facebook make money in the process, may lose their 1st mover advantage to (Facebook’s market) and be forced to double down later.

What are your thoughts and how will this impact your investing decisions in the sector?

FOCUS Investment Banking Web-only Retail Index

Opportunities galore on the EXPO floor

It just keeps getting bigger
  Shop.org Annual Summit
 

PROFESSIONAL DEVELOPMENT DONE RIGHT. PASS IT ALONG TO YOUR TEAM!

 

This year’s EXPO features 200+ of the best solution providers for digital and multichannel retailers and tons of educational and networking opportunities, too:

There’s no way one person (even you) can take in all that the Annual Summit offers, so you’ll want to bring a team. For junior team members, exploring the EXPO is an education in itself—and it’s FREE for all retailers (like you).

 

  28 Days Until the Summit - Register Now

Retailer Free
Enjoy the exhibits, educational opportunities and tours — all for free.
More
 
 
 
 
 
     
 
Shop.org 325 7th Street, NW, Suite 1100 Washington, DC 20004
Facebook Twitter LinkedIn Blog

To unsubscribe from this email communication, click here.
To unsubscribe from all NRF email communications (including ARTS, LP Information, NCCR, NRF Foundation,
RAMA, Shop.org, and STORES Magazine) click here.

325 7th Street NW, Suite 1100, Washington, DC 20004

Retail gift card programs saw rapid customer acceptance and usage almost immediately after being launched in the mid 1990s. In recent years, however, card use has grown at a slower pace.

Now proponents of gift card programs are talking about them in a different light: Rather than a substitute for a gift certificate, entirely new applications are being considered. Some retailers are looking to tie gift cards to store loyalty and rewards programs; others are looking to move the product into digital, where gift cards reside on cell phones and the phone can be tapped or scanned at the point of sale for redemption.

“We’ve seen steady growth despite the recession,” says Bryan Wang, director of marketing for gift card company Givex. “Nearly every retailer realizes that gift cards are essential to their business, and customer loyalty is a big part of that.”

Gift card purchases are no longer tied to holidays and special occasions. A recent study by First Data, a payments processing company that also operates gift card programs for retailers, found that nearly 20 percent of gift cards were purchased for no particular reason.

“More people are purchasing the card to say thank you to a friend … [or] for themselves to use as spending cards,” says Mike Hursta, vice president of prepaid solutions for First Data.

One sign that more customers are purchasing gift cards for themselves is the fact that more cards are being reloaded after the original value runs out. In 2011, customers put an average of $211 on gift cards, compared with $161 in 2010, according to First Data.

Incentivizing
“Some stores and restaurants are telling their customers that they will give them an extra $5 if they go online and register their cards,” Wang says. “Once they can track their purchasing behavior, they can notify the customers of specific promotions and offer rewards that are likely to fit the customers’ wants and needs.”

First Data has also seen more interest in tying gift cards to rewards.

“Our research found that 71 percent of people who have a gift card spend more money in a store than the amount retained on their card,” Hursta says. The desire to get customers into the store and have them buy has retailers looking to add value to their card programs. “Savvy retailers want to be able to create incentives to get customers to … reload their cards,” he adds.

Extending customer usage after the original card value has run out is usually accomplished by offering financial rewards, such as dollar bonuses or free products, or special events or information available only to cardholders.

Hursta says a recent study by his company found that two-thirds of consumers surveyed said they would reload value onto a gift card if there was some type of reward tied to the action.

Added benefit
Smaller retail chains are also beginning to offer gift cards. Many previously believed their operations were too small to support a gift card program, but new offerings by gift card companies and payments processors have been geared specifically to smaller retailers.

“There is a greater recognition now that it does not matter what size a retail operation is: It has to be prepared to offer gift cards because customers will ask for then,” Wang says. “The newer programs for smaller retailers are less complicated to run.”

First Data’s Hursta says challenges remain for smaller retailers offering gift cards. Many card purchasers want to get their cards from national chains, so recipients can redeem the card if they live far away from the purchaser. And small retailers can have a more difficult time promoting their card program, often relying on word-of-mouth. That is another reason why offering rewards tied to gift card purchasers can have an added benefit, Hursta says.

Digitizing cards
Another major development is digital gift cards, which customers receive via text message on their mobile phone. When retailers are equipped with near field communications (NFC) technology, customers can simply tap their phones near the POS system to redeem the card value.

But the reality is that few retailers have such systems in place today. Some have scanners that can read a barcode displayed on a phone; in such cases, retailers can put barcodes on their digital gift cards. A clerk then scans the customer’s phone to get the information required for redemption.

While digital gift cards hold a lot of benefits — especially among those consumers eager to find new uses for cell phones — there are some obstacles. “Digital gift cards are waiting for mobile payments to take off,” Wang says. “Customers may want to transact via their mobile phones but the systems are not quite ready yet.”

Complicating matters are multiple operating systems for mobile payments; retailers want to be sure one standard applies before they make the investment. “All the players need to get in line for mobile payment first,” Wang says. “Once mobile payments take off, we expect everyone will want to jump into the market and offer digital gift cards.”

 

Source: http://www.stores.org/STORES%20Magazine%20July%202012/just-because?adid=ST_Weekly

Walmart Q2 Global Round-Up

“We’re expecting another solid quarter with further signs of a domestic recovery bolstered by strong growth from overseas. Despite setbacks in Mexico and South Africa, Walmart International remains the company’s growth engine and we are anticipating strong numbers coming from the UK and Latin America in particular.

 

A continuation of the positive comp trend in the US is also to be expected, which would mark four consecutive quarters of comparable sales growth and indicate stability in Walmart’s domestic strategy. That said, we remain doubtful over the longevity of Walmart’s back-to-basics approach. Low prices are no longer a USP, but an expectation from shoppers. The recent closure of an Express store indicates that the format, despite being profitable, is a long way from perfection. Walmart needs to accelerate its multi-channel initiatives in order to sustain the current positive momentum.” 



Natalie Berg, Global Research Director


Download full PDF

Follow us on social media: 

               

View our magazine archives: 

                       


My Office News Ⓒ 2017 - Designed by A Collective


SUBSCRIBE TO OUR NEWSLETTER
Top