Visa Goes Mobile
Visa USA kicked off a test of coupon offers via cell-phone text messaging in November at its headquarters in San Francisco. The move represents the next stage in Visa’s mobile strategy of delivering convenient and innovative payment products and services.
The pilot, involving 500 Visa employees, enables users of any cell-phone product or service to receive weekly offers by text message that may be used at cafes on Visa’s corporate campus. The offers are being tested in three formats: text, graphic and barcode coupons. An example of an offer is a $1 lunch discount. To redeem the coupon, the employee shows a worker at a campus cafe the mobile offer on the phone. Either the barcode is scanned or the worker inputs a promotional code associated with the coupon.
“We think of this as an enhanced delivery channel,” said Pam Zuercher, VP of product innovation and coordination at Visa USA.
“We now have a more convenient way to deliver offers to consumers that they are able to redeem at the point of sale.”
Mobile coupons may become an even hotter trend this year, with more companies testing such programs. Another example is Cellfire, which offers a downloadable application for Cingular Wireless customers enabling the user to download coupons from retailers such as T.G.I. Friday’s and Hollywood Video.
After an estimated three-month test, Visa plans to expand its coupon pilot to public trials. Other mobile applications Visa intends to test in 2007 include money-transfer and Visa-account alerts, both via text messaging. Last year, Visa completed yet another cell-phone pilot involving using phones as payment devices at Philips Arena in Atlanta.
Getting Personal With Gift Cards
Just in time for the holiday season, American Express in late November launched specialized gift cards tailored to specific themes and audiences. The cards not only offer a specific monetary value, but they also include value added features in the form of discounts.
The “Especially For” series includes cards for kids, teens, birthdays, dining, movie lovers, and newlyweds. Participating retailers and restaurants feature free or discounted coupons that the user can access and print out on line by inputting the gift card’s serial number. For example, the gift card for kids includes downloadable discounts from KB Toys, Kids Foot Locker, f.y.e., Build-A-Bear Workshop and AMF bowling centers.
“Gift cards are more popular than ever, and American Express is constantly looking to make giving and receiving our gift card a more enjoyable experience,” said Valerie Soranno Keating, president, American Express travelers cheques and prepaid services.
The gift cards can be purchased on line or at participating retailers, banks and American Travel Service offices. Other special-offer partners in the program include: 1-800-flowers.com; Bed Bath & Beyond; Blockbuster Video; California Pizza Kitchen; Champs Sports; Gateway Computers; Kosta Boda; hutterfly; McCormick & Schmick’s; Omaha Steaks; Papa John’s Pizza; Pier 1 Imports; Regis Salons; Cinemark Theatres; The Palm; and Ticketmaster.
Web Payment Options Expanding
Paying for on-line purchases with credit or debit cards may be the most popular choice by far, but growing concerns about identity theft and fraud keep some from completing a sale. In response, retailers are starting to embrace alternative payment options.
Adoption has been slow, however, according to a study of 100 on-line retailers completed in October by interactive solutions provider Brulant. Of the retailers surveyed, only 9% offered alternative payment methods (APMs) such as Bill Me Later, PayPal and CheckFree. The study examined a cross-section of large Web-only and multichannel retailers.
“By our estimates, companies who offer APMs find that approximately 6% of all on-line sales are paid for via APM,” said Stephen Morris, principal with Brulant. “The argument for implementing APMs is very persuasive when you consider the amount of revenue retailers are leaving on the table by not offering customers without credit cards—or who are afraid to use them on line due to security concerns—a way to make on-line purchases.”
Obstacles to greater adoption, Morris said, include fees and some APM providers’ requirement that users navigate away from the retailer’s site to make a purchase. However, many retailers find the benefits of APMs outweigh the drawbacks, especially when taking into account that 40% of the U.S. population does not own a credit card.
“As we see Google and others enter the APM arena, it’s conceivable that the percentage of retailers we examined in our study who offer some form of APM will grow to approximately 40% over the next 18 months,” Morris predicted.
An unrelated survey by Quality Research Associates last year showed that of on-line retailers that offered an APM, 80% of site visits were converted into sales—an impressive 20% higher than the average for retailers not offering alternative payment choices.
Ahold U.S. to Accept Bids on Foodservice Unit
Columbia, Md., Royal Ahold is expected to start accepting bids on its U.S. foodservice division, which has been plagued by financial woes in recent years, in early 2007. Among the companies expected to show an interest in the division are Kohlberg Kravis Roberts & Co. and Clayton, Dubilier & Rice.
Nine West Opens International Flagships
New York, Nine West Group, a division of Jones Apparel Group, opened flagship locations this December in Tokyo, Moscow and Vietnam as part of a global expansion initiative that began in early 2006. The new stores marked the debut of the company’s updated store format, which is designed to strengthen the brand’s fashion presence in footwear, accessories and handbags.