Retailers look for new-product potential and growth at Prepaid Expo
ORLANDO, Fla. -- International reloadable cards, prepaid WiFi and online gaming may emerge as larger pieces of the overall prepaid mix, said retailers speaking at this year's annual Prepaid Expo. Though accounting for somewhere in the range of 1%-1.5% of sales, the prepaid category is a "small but valued" category because of its small footprint but major growth potential, according to three convenience retailers and two suppliers on a panel discussion convened at the conference held in Orlando, Fla., last week.
When asked which new-product trends they would be watching, [image-nocss] panelists mentioned a wide range. David Taylor, category director, ExxonMobil Corp., Fairfax, Va., said the American Express and Visa gift cards are becoming more dominant, eclipsing the initial trend of so-called mall cards. (See related story elsewhere in today's CSP Daily News.) Additionally, he said one of the next products they'll place focus on is international reloadable cards, which allow customers to add options such as wireless phone minutes for international calling.
Another emerging area is with online gaming. "When two years ago, there was nothing, we're looking at a quarter-billion in sales this year," said Frank Squilla, senior vice president of sales for Atlanta-based InComm. "It's one of the fastest-growing categories, having started on the coasts and now hitting areas like Dallas."
He said that digital content, inclusive of music and eventually movies, has seen "tremendous" spikes.
For Scott Burslem, other income manager, TravelCenters of America, Westlake, Ohio, recent growth has come with reloadable debit and credit cards, mostly due to their demographic being made up of high numbers of the "unbanked" population. The company has also been marketing a proprietary prepaid WiFi product and has seen a "significant increase" in sales for its efforts.
Though most of its business is in prepaid cellular, Gibsonia, Pa.-based Handee Marts Inc.'s Michael Triantafellou, the 7-Eleven licensee's president and CEO, said he's looking at online gaming and iTunes music as upcoming options.
Still, despite the obvious need to prepare for future trends, other panelists refocused the discussion on current strengths. Mike Skinner, general manager, Coinstar E-payment Services, Bellevue, Wash., said, "We don't see anything game-changing like prepaid wireless. We can't take our eye off the ball in that there's not anything [new that will] immediately translate to c-stores."
Between 1,500-1,600 attendees were at the three-day Prepaid Expo, which concluded Wednesday. The figure was below the typical 2,200, mostly due to the economy.
"People are spending less on travel," said Keith Kirkpatrick, conference director, 2009 Prepaid Expo USA. "So instead of sending 30 people, they're sending their five to 10 top decision-makers."
This year's conference discussion centered on innovation, said Kirkpatrick, but not just with new products. "It goes beyond the big bells and whistles," he said. "It's about making products easier to use or marketing issues so that all parties understand what prepaid is and what it's not."
Panelists in other conference sessions agreed. Laura Kelly, senior vice president of global prepaid debit & credit card solutions for MasterCard Worldwide, Purchase, N.Y., said infrastructure and innovation were specific focuses for the company. She noted developments in both Italy and the United States, where government-issued cards saved millions of dollars.
Echoing Kirkpatrick's ideas, Steve Streit, founder and CEO of Green Dot Corp., Monrovia, Calif., said, "We like the old-fashioned approach; we look at innovation as how do you educate your consumer and [examine aspects] like distribution and pricing."