Tuesday, February 23, 2010

Panel Discussion: State of the Market Open Loop Programs

Jeff Johnson, Senior Vice President, First Data
Mark Troughton, President, Cards & Network, Green Dot Corporation
Todd Brockman, President, Galileo Processing
Jon Round, Senior Vice President & General Manager, Prepaid i2c
Greg Waltz, Vice President & General Manager, Payment Products, Moneygram
Martin Ferneczi, CEO, Americas Region, Oberthur Technologies
Patrick Brown, Executive Vice President, Emerging Markets, NetSpend

Jeff Johnson began the presentation by mentioning that the state of the market closed-loop gift cards declining. Gift cards are the best burn option for consumers and so a lot of innovation in the supply chain is expected. The biggest growth and innovation in prepaid is expected in digital channels which include social media outreach and publication. Here are a couple of questions asked to the panel and their answers below.

What changes or developments have you seen in your gift card programs over the past year?
The biggest development is in the loyalty space by using the Dunkin’ card and giving consumers rewards and incentives by giving them points. There is a lot of money to be made by franchisees. In the beginning a lot of consumers were afraid of bankrupticies but BestBuy focused on changing their messaging to “buy with confidence.” Outside of the industry there’s still g a lot going on with consumer confidence when there is over 10% unemployment.

What was the most innovative program utilized?
The number one technology was the augmented reality technology. Consumers went online to homedepot.com and held the card in front of the web cam and the box and product would shake. The goal was to bring the customer a more interactive experience to the brand and shopping. It was used to create a bond with the consumer brand the home depot brand. Best Buy launched a national recycling product and developed a process where the cards are recycled into smaller pieces of plastics that come back as gift cards and the other half go into recycling centers.

Where are the opportunities for growth?
The number one focus for BestBuy as a strategy is to go for comScore growth followed by 3rd party extension. International is also a huge focus because ¾ of the marketplace is outside of the U.S. Mobile and loyalty solutions also creates an interesting concept that not many have ventured into yet.

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