To see how new technology and changing consumer purchasing habits have informed payments industry leaders' partnerships, solutions and practices for the upcoming year-end holiday season, we asked members of The Green Sheet Advisory Board the following questions:
This article contains the second and final portions of their responses; the first group of answers appeared in our Oct. 10, 2022, issue. We appreciate the industry leaders who shared their views for this two-part feature.
The third question is most relevant to my work as an industry journalist and podcast host, so I'll share insights on ways ISOs and their sales partners can help merchants make the most of the upcoming holiday season.
The year-end holiday season is by far the biggest time of the year for retailers in terms of consumer spending. Total spending is expected to be down from last year—which, at 8.5 percent over 2020, was the largest increase in year-end holiday spending in nearly a generation, according to the consultancy Deloitte. But at a projected increase of 7.1 percent over 2021 spending, based on Mastercard data, consumer spending will continue at a healthy clip this holiday season.
Indications are that consumers were already getting a jump on shopping in September, seemingly so they could have more time to spread out their budgets and get deals. When all is said and done, Deloitte expects Americans to spend between $1.45 and $1.47 trillion this year on holiday gifts.
ISOs and their sales partners should be checking in with their retailers, ensuring they are well-positioned to compete for a share of this spending pie. One strategy that often gets overlooked is gift card sales. With supply chain issues likely to continue impacting product availability, 60 percent of consumers plan to purchase gift cards this year to fill the void, according to research from Fiserv.
Consumers are most likely to purchase gift cards from discount stores and online retailers, but not to the exclusion of smaller merchants. Fiserv found nearly a third (32 percent) plan to purchase gift cards from coffee shops, for example. One in four said they would spend $20 to $30 on each card gifted; one in five expect to spend $50 to $100, Fiserv reported.
There are several advantages retailers can gain by offering gift cards. Each gift card purchase is an interest-free loan a retailer can invest in generating more sales, for example. They also are great marketing tools that tend to generate sales in excess of the value loaded onto cards.
The draw for ISOs and agents should be merchant stickiness. Once you have set up a merchant to sell gift cards, it isn’t easy for them to switch providers, as it requires new, complex integrations of gift card files with payment processing hardware and software.
So, for those not offering merchants gift cards already, it may be time to start.
Don’t immediately suggest price as the only factor in selecting your company. Be creative and understand the needs of the members when developing a win/win/win program (first win, the association; second win, association members; third win, your ISO).
Speaking engagements at conferences and tradeshows always work. You must plan ahead whether you wish to be a keynote and/or speak in a break-out session on a specific topic. For those of you who are uncomfortable speaking in public, try it. Once you do it a few times, it becomes very enjoyable and a great way to earn new business and share your thoughts on the industry.
Most associations have either an online or physical newsletter, plus their website continuously updates relevant information with its members. Writing articles on current payment topics is a great way to demonstrate your authority and educate merchants (who otherwise would not be thinking about credit card processing and its effect on their bottom line profitability).
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The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.
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