From September 2007

By Faye Brookman

When Stage Stores wanted to make its gift card display a one-stop shop, it turned to specialty gift package and promotion supplier Seastone.

A stepped-up effort for holiday 2006 resulted in solid sales gains in both gift cards and the Seastone-supplied enhancements for Stage Stores, which operates stores under the Stage, Bealls, Palais Royal and Peeples banners. All elements of Stage’s marketing ties together the colors and schemes carried out in the gift cards, a strategy that helps complete the sale, according to Jennifer Grammar, the retailer’s gift card marketing manager.

Gift cards have emerged as one of the brightest categories for retailers. According to the National Retail Federation, sales reached $24.81 billion last year, an increase of nearly one-third from 2005, and some predictions have gift card sales nearly quadrupling to $97 billion in 2007. Not surprisingly, retailers want to create more of an impact at the point of sale.

Seeing a need in the market for attractive methods for consumers to present the cards, Seastone revved up its specialty packaging four years ago. From a presentation standpoint, “there were very few things you could do with the cards,” company president Eric Child says. “You could put them in a greeting card or a bag, [but] we didn’t want consumers to have to go to another store for something to put the card in. There was pent-up demand.”

Offering the Seastone merchandise helps ignite multiple sales at a nice profit margin, he says. “We have data that suggests one in three shoppers buy some kind of package or decorative item to dress up a gift card.”

Provo, Utah-based Seastone offers everything from tins and wood boxes to plastic and paper at prices ranging from $1 to $3. The firm shipped more than 50 million units in 2006.

Grammar says she tosses themes out to the Seastone team, which then responds with concepts. “They will keep working until they give us what we want,” she says.

The enhancements work across numerous trade channels. Safeway, for example, used the program for the 2006 holiday season and realized a 93 percent sell-through on the gift card holders.

Wet Seal uses a Seastone tin in conjunction with its loyalty program: coupons and other value incentives are presented in a tin when a customer joins the program. According to Wet Seal, use of the tin has boosted program sales 50 percent over a previous offer.

Most merchants house the merchandise near the cards, often on peg displays. Stage Stores used two different display types last holiday season. The company was “very pleased with the results” from the use of a special gift card fixture tested in 200 stores, Grammar says.

Flying purses
Another 450 stores sported a cardboard fixture, placed at counters, which highlighted all the gift card enhancements. This also stimulated sales, Grammar says. Among the most popular choices were mini quilted purses and purses with pompoms. “They just flew out,” she says.

Seastone also works with manufacturers and licensees, and was recently awarded the license for the beloved Peanuts characters. Under the agreement, Seastone designs, manufactures and distributes Peanuts-branded gift cards for retailers like Wal-Mart.

Child foresees opportunities for the sale and marketing of gift cards outside the typical holiday selling season. “We see strong growth for year-round offerings such as baby showers or Valentine’s Day,” he says. “Retailers are learning how to promote the category and the importance of dedicated space all year.”