By Larry Weissbach, Vice President, Client Success
At CashStar Innovate 2015 innovators in prepaid commerce gathered and shared the challenges and opportunities facing their businesses. They expressed their thoughts and ideas for new ways to interact with consumers in the ever-changing world of retail. On the Executive Panel, The New Paradigm of Prepaid Commerce, moderated by Ben Jackson of Mercator Advisory Group, we heard from Subway’s Erin Wood, Sephora’s Johnna Marcus and Spafinder Wellness 365’ Steve Kane. Together, they discussed the complex issues surrounding retail and the important role prepaid commerce is playing in the market.
The top five key considerations for driving successful prepaid commerce in 2015, as highlighted by the panelists, include:
- The continued importance of the consumer: Much like the first shopper who ran a price check on their mobile phone in-store, initiating the omni-channel revolution, consumers – through their actions – will tell retailers what they want. That means retailers need to listen and remain ready to move fast. Panelists agreed that retailers should not pursue technology unless it solves a practical problem for consumers.
- Mobile, mobile, mobile: With emergence of Apple Pay, the newly announced Android Pay and continued evolution of PayPal, the prepaid ecosystem, which includes consumers and retailers, is starting to think more broadly about payment options. Mobile wallets are definitely part of this rapid evolution, but they need to evolve to provide more value to consumers to become more relevant. Retailers also need to understand which wallets to support and for what reasons. It’s unclear when the “tipping point” of adoption will occur, which payment options will prevail and how to meet market needs. Retailers need to have a defined strategy for mobile payments, that spans across devices and channels throughout the customer lifecycle and identify how gift cards, loyalty rewards and promotions are managed in the app environment, whether it be their own or a third-party app such as Apple Passbook, MCX and Google Wallet.
- Expansion of digital gifting use cases: In addition to mobile wallets and payment considerations, prepaid commerce is now touching loyalty, marketing, CRM, ecommerce, mobile and social teams. For example offering bonus gift cards that create an incentive for purchase is becoming favored over coupons and discounts. Success with this type of experience requires management across existing systems and alignment of internal stakeholders who manage different functions to create a seamless experience for the consumer. While a lot of new use cases are evolving for digital gifting in the world of prepaid commerce, the traditional offering of gift cards online continues to deliver terrific growth for business – in one case 85% year-over-year growth.
- Engagement throughout the customer lifecycle: Delivering an eGift should represent just the beginning of a relationship with the recipient – the best brands will figure out how to engage with each recipient in new and interesting ways throughout the consumer’s interaction with their company, creating value for both the consumer and the brand.
- B2B prepaid commerce is on the rise: Direct-to-consumer prepaid commerce is only one growth opportunity in retail. Another includes B2B prepaid commerce, or the distribution of digital gift cards through a network of partners. B2B allows retailers to extend their reach, cultivate new consumer relationships and, ultimately, scale and grow their business. B2B prepaid commerce through a digital format also promises speed and efficiencies.
As retailers look to make prepaid commerce an integral part of their strategy, they should factor in these key considerations to drive success.