Category Archives: Deals

Yiftee Sees Opportunity in eGift Cards for SMBs

Coupons, pre-paid deals and card-linked offers have established themselves in the local digital promotion ecosystem. But what about gift cards?

Leading Gift Card companies like BlackHawk Network and Incomm provide dozens of gift card slots in retail establishments for hundreds of national brands, from Amazon to Starbucks. On the Internet, First Data’s Gyft and Transaction Wireless provide card-to-online registration for many of the same national brands.

Local merchants don’t really have the same capabilities, however, and are mostly limited to issuing check-like gift certificates. One SMB gift card solution was provided several years ago by Adility. It has since been folded in with Incomm and focuses on validated coupons. A current candidate is Yiftee, a three- year-old startup launched by Donna Novitsky, who previously launched BigTent, a social groupware provider for women currently owned by Care.com.

Yiftee provides online promotion and gift card capabilities to both national and local businesses – the former acting as a traffic draw, and a validation point. “SMBs are more comfortable when they see brands like TGIF or Sephora doing the same as they are about to do,” says Novitsky. She notes that the inspiration for Yiftee came from a deal that BigTent ran several years ago with Groupon. “We wanted to a better job of generating profitable business for SMBs, not bargain hunters with no margin for the SMB.”

The company currently supports 55,000 locations, with 5,000 of those local brands. Ultimately, independent stores and local chains are expected to represent the bulk of the company’s activity, giving consumers the ability to “shop local” for gift cards on mobile and online.

Independent stores pay Yiftee $30 a month (or $240/yr) to put a button on their website and FaceBook and sell unlimited, customized eGift Cards. They also get to take part in the Yiftee network, which is used by both consumers and enterprise customers to find local businesses and purchase eGifts. No setup fees or technology integration or training is required. National players pay $12 per location when they sign up 10 or more. Up to now, chains with up to 300 locations, such as Schlotzsky’s Bakery Cafe, have been the company’s sweet spot.

One additional advantage of using the card is it provides a set of user analytics. Plastic cards don’t provide much data on the purchaser, recipient or occasion, unlike digital cards, notes Novitsky. If advertisers include a TXT link to their ads to “win” a card, they can complement TV, cable TV, radio, social and print campaigns and see what is really working. eGift Cards are frequently used as “Thank You’” presents, for customer recovery, and as marketing incentives by local merchants and community members, such as real estate agents, to drive local business.

Some of the sales for Yiftee come from direct requests by consumers and companies who see a listing on Yiftee.com and want to get a card. (I requested one from “A Little Shop of Bagels” in my hometown). Most, however, are being sold on the merchants’ websites and social media channels, bringing more customers into their stores. Yiftee also signs up merchants via payment processor partners, such as Global Payments.

Groupon Gets $250 M from Comcast Fund: Synergies with Instacart, Next Door, Closely?

A Comcast-supported fund has plowed $250 million into Groupon, possibly leading to a broader role for the Cable and TV network giant, which could seek to leverage its enormous national and local reach from NBC/Universal and Comcast cable franchises to really make Groupon’s transition to a local marketplaces service work.

There are also possibilities to develop Groupon in the Hispanic market with the Univision Network – the mobile-driven ecommerce Hispanic martketplace is poised to take off. Several options also lend themselves via Comcast Ventures, which holds portfolio investments in Closely (loyalty services), Next Door (hyperlocal neighborhoods) and Instacart (delivery). The latter could play off Groupon’s recent focus on restaurant delivery services.

The investment comes from Arairos, which is headed by former Comcast CFO Michael Angelakis. Comcast funded the effort with $4 billion last year.

if there were any doubt that Comcast was contemplating a hands-on role, the companies said in a statement they would be working together to “identify and implement potential strategic partnership opportunities.”

Comcast is not exactly a newcomer to local marketplaces. In addition to selling advertising, typically at the large SMB level, it has sought to develop several local media properties, from local city guides to Daily Candy, a women’s consumer newsletter that ceased operations in 2013. NBC also has a history with the city guide-and-deals marketplace.

Cardlinx San Francisco: The Drive to ‘Incremental Spend’ by Consumers

The evolution of the card linked space is happening in unexpected ways, as we saw this week at Cardlinx’s San Francisco conference. It was the association’s largest event in its two year history. Basically — the table has been set; a number of early arriving guests have arrived; and we are now waiting for real momentum and numbers to come in.

The first to come on board have been the larger companies, which thrive on the analytics – they want to know who their customers are, and how to market to them. The smaller merchants are more impacted by the direct impact of offers that drive store traffic and are still using their traditional options (ads, dm, coupons, etc.)

The event’s large attendance –130+ — reflected the rollout of several key card-linked based projects, such as Plenti from Amex, Macy’s, AT&T, Enterprise Rent a Car, Exxon Mobile and others; and a major card linked rollout from Whole Foods. Living Social has added a card linked element in dining rewards; and Groupon is tentatively preparing one as well, with 15 percent off as a constant feature.

Card linking is also seen as being deeply integrated with payment and messengering programs that are more directly driving commerce. Facebook, for instance — a Cardlinx member –appears to be studying a role for card linking on its growing Messenger platform, which is already set to provide shipping updates, book rides and send money.

Widely used, well-subscribed platforms are expected to add scale to card linked concepts as well. Speaking at the event, Empyr CEO Jon Carder said he could see 20 million active consumers building a $10 billion annual business –with $750 million in revenues going to the participating card linked offer companies. “It is a network effect,” he said. “The more participants, the more consumers you have, the more revenue you get. “

Whole Foods has whole-heartedly embraced its card linked program – which is a bit of a surprise for a company that has historically been “discount reluctant.” Payments Marketing Director Marushka Bland said card linking will give it an edge as the company faces serious competition in the organic grocery space from Kroger, Costco, Walmart and others. The company is now “much more open to worrying about its customers and eager to focus on things like loyalty.”

Whole Foods started rolling out its affinity program on a small scale in 2014. It is currently rolling out digital coupons. “It is about our customers and how they shop with us,” said Bland. “Execution, targeting and attribution” are the keys to the program, with a target goal of 10 percent incremental spend.

Incremental spend is also the chief goal for Excentus President and CEO Brandon Logsdon, who stressed that the key is not to focus on Card Linked Offers, but on getting participation in card linked programs. (He’s right: I’m going to phase out my own references to CLOs.)

Excentus rolled out its Fuel Rewards program in 2012. More than 6.5 million cards have been registered, and there is an active group of 1.4 million linked cards. Customers have spent $450 million on a growing list of affiliating merchants, and gotten $3.6 million back on fuel costs (roughly 5 cents a gallon). Logsdon adds that the merchants are seeing brand new spending from the programs. Fifty percent of those coming in are new customers; and 65 percent of promoted sales are incremental.

Empyr CEO Jon Carder

Empyr CEO Jon Carder

The Failure of ‘Gimmick Commerce’ Brands

Graphic from Recode

“Gimmick Commerce” is one way to look at the sites that entice people to buy things online via promotions, flash sales and subscriptions. Mostly, it represents things that people don’t need.
But it has almost totally failed, per Recode’s Jason Del Rey in a provocative piece this week. In the deals space, Groupon has pivoted to a marketplace focus (i.e. normal shopping) and is trading at just $3 a share. Living Social is publicly struggling and experimenting with new models, like card linked offers.

The other deal sites are gone or totally pivoted. Just yesterday, Nimble Commerce, the last of the major independent deal aggregators, announced it was selling out to BlackHawk Network, a leading gift card company.

Other “gimmick commerce” models have also failed to gain traction. The flash sales space is basically gone, with Fab, Gilt, Ziulily bowing out at fire sale prices, and One Kings Lane positioning itself to do the same. Del Rey concludes that none of these companies have been able to cut into the Amazon behemoth, which accounted for 50 percent of all ecommerce growth last year (although Amazon surely engages in its own Gimmick Commerce).

The only companies that are growing and safe from Amazon are the specialty subscription services. With the exception of some of the high loyalty food delivery companies (Blue Apron) and subscription razor companies (Dollar Shave) most of these probably aren’t keeping their customers.

It’s a big, brave thesis. Rey points to the difficulty of building new brands and creating consumer habits from scratch – and the never receding desire to buy everything from a single source. But it is kind of broad — I don’t know that all these companies should be lumped together. And it shouldn’t be inferred that the new technologies and features like big data analytics, buy buttons, card linking and targeted offers that act as a foundation for these sites are being rejected. They remain transformative and will probably account for a big percentage of the next generation of impulse buying, if not shopping altogether.

Does Email Still Drive SMB Marketing? Privy Says ‘Yes’


We’re said to be in a post-email generation, as Millennials increasingly rely on messaging and other channels. There will need to be a lot of adjustment for marketing strategies.

But email is still the most reliable connection for most consumers. It remains the primary input for customer lists, which are now being collected by 80 percent of SMBs, per BIA/Kelsey. In fact, no other SMB marketing feature ranks as high.

Are SMBs doing enough with their email lists? The obvious answer is “no.”

Optimizing email for leads and engagement is the role that Boston-based Privy has given itself. Founded in 2012 as an offers company during the Groupon boom, Privy has remade itself as a freemium/premium email marketing enhancer that is tightly integrated with more than 10 top email programs (Mail Chimp, Constant Contact, Fishbowl etc.)

The 10 person company currently has a base of 14,000 SMBs under its email marketing efforts, and is now growing by 3,000 to 4,000 new small businesses every month. It hopes to enlist 50,000- 60,000 SMBs by the end of the year.

CEO and Founder Ben Jabbawy tells us that the company’s initial focus on offers and then “closed loop marketing systems” was an effective way to acquire consumers, but businesses were slow to adopt. The new focus on email list growth has given the company a period of rapid new growth – even though much of the leads- based functionality (attaching offers etc.) remains pretty much the same.

Two types of campaigns are typically run, says Jabbawy. “The first is a generic, ‘Hey , welcome to the website’ type effort. They may see a 1.5 – 2 percent conversion. The second is offer-based. “Join our list and get X% off.’ Offer driven campaign can see conversion rates jump to 5-15 percent. Offers are (still) a great carrot to incentivize customers to establish relationships.,” he says.

While the core email programs provide a lot of services, Jabbawy says Privy’s ability to provide more sophisticated targeting, offer tracking and redemption fully complement them. “When businesses sign up for Constant Contact or Mail Chimp, they typically have (few) email contacts,” he suggests. “The majority have sub 100 email contacts, or sub 500 contacts.”

Privy is offering a feature-rich freemium tier, with paid plans costing either $19 a month, $79 a month and higher (which is mostly for Enterprise players.) Given the expense of cold calling and acquiring SMBs in general, Jabbawy says it is an attractive offering.

And while email is the focus, a Privy campaign just as easily leads in to website-based marketing. Privy simplifies getting SMBs onto Websites, he says. SMBs that have Shopify, WordPress and Weebly.com accounts are the company’s fastest growing channels.

American Express Cuts Back: Big Impact on SMB Digital Marketing Support?

American Express is under the knife, as it cuts $1 billion in spending with the end of its Costco and JetBlue co-branded cards. The cutback will probably cut into many of the forward looking promotion and marketing projects that Amex underwrites with Facebook, Twitter, Foursquare, Uber, Pinterest and others.

It will also lead to the departure of many executives – Leslie Berland, EVP, Global Advertising, Marketing and Digital Partnerships, for one, is rumored to be headed to Twitter as CMO – where she would be able to work with Buy Buttons, coupons and other promotions to fan commerce that would supplement or compete with Amex efforts. In this case, the use of Twitter and other social media to fan commerce will seem a whole lot easier than directly fulfilling sales and ecommerce.

For Amex, however, it is not all bad. If we want to be cheerful about it, the looming cutbacks also represent a great “focusing” opportunity for the company, which is perhaps the most aggressive digital marketer in the field with mobile-oriented initiatives for deals, loyalty, prepaid cards and wallets.

The company and its premium model have actually been under stress for some time — even before the loss of the two reseller deals (Costco alone represented 10 percent of Amex revenue). While there is Apple-like seamlessness in Amex as the acquirer, the issuer and the network, many merchants have been hesitant to pay the .5 percent Amex premium over other credit card issuers – especially after Amex moved away from its exclusive emphasis on the wealthy and rolled out the Bluebird debit product with Walmart and other value cards to compete for the high volume of underbanked customers.

Given the cutbacks, we wouldn’t be going too far out on the limb to predict that Amex won’t be underwriting major promotions from major merchants in the near future. This past holiday season, we already saw Amex end its subsidy of Small Business Saturday purchases (which went from $25 in 2013 to $10 in 2014 to zero in 2015).

One could argue that Amex has already incubated its digital offerings, which launched in 2011-12 out of a distinct business unit designed to “challenge the status quo.” Indeed, these efforts may not really require additional financial support. We know that a good promotion these days still results in tens of thousands of sales – Amex definitely remains an inviting publisher for deals . But they are no Super Bowl.

As for the focusing opportunity? That would be for Amex to reimagine itself as a marketing machine for its merchants – something that is well underway. That could mean a series of acquisitions (I might speculate that could mean one of the SMB loyalty plays, Big Data companies – Amex was an initial investor of Radius Intelligence–, or even a social media power, such as Twitter, Yelp or Foursquare).

At Money2020 in 2014 – more than 14 months ago — CEO Kenneth Chenault telegraphed the company’s next moves. When it comes down to payment innovation, it all comes down to one thing: Merchants want to grow sales. Does the innovation “help merchants meet customer needs?” he asked. “Do they provide incentives for changing customer behavior?”

Amex CEO Ken Chenault at Money2020 2014

My Podcast Predictions for 2016: I’m on ‘The Digital CMO with Mike Orren’

Can the daily deals model recover? Will beacons be big in retail? Why is the home services space set to soar? How will custom deals be more sophisticated in the new year? And how can marketers decide which “unicorns” to bet on and which to ignore?

Speakeasy CEO and social and hyperlocal media pioneer Mike Orren interviews me — The Local Onliner — about what’s happening in local and media in 2016 for his new show, The Digital CMO. It runs about 34 minutes….Here’s the podcast link.