Loyalty Gets Personal
Vibrant loyalty programs are a crucial part of another prepaid trend: customers increasingly purchasing gift cards for personal use.
If you have a rewards program in place, “a customer who needs to buy a new window for their house will come in and buy a $300 Home Depot gift card from you and then use it to buy the window for themselves,” says Frank Squilla, senior vice president of sales for Atlanta-based InComm. They get points toward free gas and you get a high giftcard sale.
If you, as a retailer, can create a reason why people would buy a product for personal use,” Squilla says, “you’ve changed the entire model.”
$155.43
The average total amount shoppers will spend on gift cards in 2012, representing a 6.7% increase, according to a National Sales Federation survey. Shared by Mintel International, the survey says men will spend an average of $164.24, while women are expected to spend an average of $147.06.
Taking It Online
There’s been some talk about prepaidwireless customers migrating online, but according to Squilla, that’s not quite right. “It’s not that customers are migrating online,” he says.
“It’s that there’s a new prepaid customer developing. Former post-paid, credit-worthy customers are now converting because the deals and offers are becoming so compelling [that] it’s worth it to not have a longterm commitment with a contract.”
This new online customer base is opening up an opportunity for retailers to create a Web presence around their loyalty programs. “You’ve got to give online customers incentive to connect to you online,” Squilla says. “Loyalty points are the way to do that.”
GPRs are H-O-T
New banking rules are paving the way for general-purpose reloadable (GPR) market expansion.
“All the major banks and even the government is getting involved,” Squilla says. “And PayPal has developed a GPR program launching this year that allows people to access their PayPal account and now pay for offl ine goods in retail stores.”
But with hundreds of new products in the marketplace, how do c-store owners take best advantage of the opportunity? Retailers need to have their POS systems equipped with swipe reload technology that allows customers to reload variable denominations—any amount to any card. 62 % The percentage of general-purpose reloads that are estimated to originate from retail-store locations, according to Mercator Advisory Group. This can translate to upsell opportunities and increased foot traffi c for retailers who focus on this segment.
Bad Allergies = Sales Opportunity
With an unseasonably mild winter behind us, many doctors are predicting the worst allergy season in more than 10 years.
“Proactive retailers and wholesalers will want to be prepared and increase their inventory of allergy-related products to include counter displays, clip strips and recommended allergy over-thecounter (OTC) medication within their health and beauty care (HBC) set to optimize sales,” says Tom LaManna, director of marketing for Convenience Valet, Melrose Park, Ill. Beth Noteman of Lil’ Drug Store Products, Cedar Rapids, Iowa, reminds retailers that in cases like this, secondary displays are a great way of generating incremental business.
“Whenever anyone says ‘secondary display’ to a c-store owner, they all cringe and say, ‘I don’t have space!’ ” Noteman says. “But there are compact solutions out there.”
One to six times
According to a consumer survey by Mintel, most respondents who take allergy, sinus, cold and fl u remedies say they have used them one to six times in the past 12 months. Nearly one-third of respondents say they use allergy remedies 13 or more times a year.
Going Private
In the past two years, product recalls and supply/shipping issues have been rampant, leaving c-stores and other retailers with empty shelves and lost sales. Looking forward, category mangers must find ways to protect themselves against such losses. C
onvenience Valet’s executive vice president of sales, Jim Blosser, emphasizes that national OTC brands are powerful and worth the hassle.
“We’re still very hopeful that the manufacturers are going to come through,” he says. “They are reviewing operating procedures and making necessary changes to processes to ensure they’ve done everything possible to avoid supply interruptions in the future.”
Noteman says keeping in close contact with suppliers may seem like elementary advice, but it’s also extremely important. “Certainly, it’s best to have information from the source about an out-of-stock or recall situation,” she says. She also points out that these supply issues, compounded by the economic recession, are creating an opportunity for private-label growth
“When the right national brands are available, as a category manager, certainly that’s the way to go,” Noteman says. “But in the absence of those brands, something has to fi ll the void.”
Condoms’ Continued Growth
C-store unit sales of male contraceptives rose 5% in the 52 weeks ending Dec. 25, 2011, according to figures from SymphonyIRI, while Nielsen shows sales up 1.7% in the 52 weeks ending Dec. 24. Much of this is being driven by new products; according to Dave Harrington, vice president of special markets for Ansell Sexual Wellness Division USA, Red Bank, N.J., non-latex products are a growth area for the segment. Consumer research fi rm Mintel reports that more than 30% of condom users say they would like to try new or different types, with men and younger respondents the most likely to make this claim.
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