What is the value of gift cards and vouchers in your house?

gift cards

Do an audit and add up the total value of gift cards and vouchers in your possession. Some will be generous gifts from friends and family, some will have been earnt as part of loyalty schemes and some will have been free gifts with purchase. I even found one in my house which had been won in a sailing race!

If we just consider the traditional gift voucher or card which someone has actually paid the retailer full face value for, this is excellent business for the retailer for a number of reasons:

• there will almost certainly be a delay between purchase and spend when the retailer can earn interest on the money
• a proportion of vouchers and cards will be lost or simply never spent – pure profit
• many customers when they come to spend the voucher will exceed the value – increased sales
• customers who do not usually shop in a particular store may be encouraged in – increased customer base

Technologically there are three main approaches:

• traditional paper pre-printed vouchers – many will have serial numbers and scanable barcodes and stolen vouchers can be cancelled
• vouchers printed at the till with scanable barcodes – these don’t look as pleasing but are easily tracked by EPOS systems and don’t exist before issue so therefore cannot be stolen
• gift cards which can be charged with money at the till, the value usually being stored in a central database – these arguably look the most pleasing and are certainly marketing as being superior for presents. Gift cards can also be precharged to be sold away from the till, most often in so called “gift card malls”, where a retailer offers a selection of other retailers’ cards in return for commission.

I used all three types this weekend with equal success.

The third annual Retail Gift Cards Europe Conference lasting two full days in London in September is testament to how big this business is and considers the details and challenges of setting up a scheme. It also reports on creative ways of marketing gift cards. Even retailers with successful schemes might find some new ideas.

In the meantime, clear out your house, find out what you’ve got and go on a spending spree !

Retail IT and private equity

So, what is the press saying about what IT can do for venture capitalists investing in retailers? Here is Christopher Field writing in June’s edition of Retail Techology, particularly with reference to systems upstream of the point of sale.

“While there is no shortage of relevant solutions, most retailers are still running their stores off paper; managing communications using a mixture of CDs, forms and telephone calls ……
Private equity companies generally don’t care that IT can solve most of these problems; they have their eyes on the balance sheet, but I do think that the IT vendors could get better at demonstrating how good technology well applied can shave months or even years off the exit.”

This is exactly the area that our store management system, RAPID, addresses and we would love the opportunity to demonstrate how RAPID could hasten the exit to any interested venture capitalists!

Retail Solutions 2008

Who scheduled Retail Solutions against Wimbledon? Despite all the tennis excitement, I did manage to pop in to the new look Retail Solutions at Excel.

To pick a couple of highlights:

Profimetrics Price Optimisation system recently acquired by Itim looked interesting. It has been designed by the team behind Arthur Planning and has some impressive quantified benefits based on a case study from the US. It is being marketed as the first, second generation price optimisation system. Improvements on generation one (systems like Demandtec and ProfitLogic) include visibility of the formulae and rules behind the results.

The Magic Mirror from RetailCam is at the opposite end of retail technology – right at the customer facing end. Just speaking from personal experience, excellent customer service in the changing room can make the difference between buying a pile of clothes and withdrawing from battle exhausted and empty handed. A lot of incremental sales can be made in the dressing room just by having a reliable method to ask staff to fetch a different size – not quite so glamorous as the Magic Mirror, but makes a huge difference to customers.

The magic mirror can email pictures and videos of the customer wearing the clothes to friends for a second opinion.  You would need to be very sure that this is only going to happen when you request it – malfunctions could be embarrassing! See this Retail Solutions press release for more details.

Overall though, the show was smaller and it was hard to spend all day there due to the lack of free seminars. The conference running alongside could have worked well but the conference programme was a full day allowing little time to go round the show in one day. Perhaps half day conferences are the answer?

I wonder what the plans for next year are?

Sports Sponsorship – Extending the Benefit

Well, the tennis excitement at Retail Answers has died down. While Chris is getting down to hard tennis practice to consolidate his progress I am planning how to keep the benefit going, how to retain some of our doubled website traffic and how to convert the excitement to relevant marketing for Retail Answers. I have yet to file the press cuttings. The PR file will have more than doubled!

We sent our first marketing email on the day Chris played his second round – a new experience for us and we got great coverage on the back page of Retail Week. A photo of Chris with a light hearted piece about Mike Eaton (Managing Director of Retail Answers) being the father of a Wimbledon sex God.

I also need to get back to other marketing such as announcing that Borders have recently selected our store management system, Rapid.