CHICAGO -- As the slumping housing industry drags down the earnings of the home improvement retailers, the big box players will be embroiled in a game of grabbing each other’s market share. Home Depot will try to gain an edge going into the holiday shopping season through a broad gift card initiative that includes rectangular plastic that double as DVDs and holiday themes.
Starting next month, consumers can purchase the pre-paid cards that also feature 25-minute how-to-videos of home improvement tasks like how to hang a ceiling fan, the basics of painting, and installing a faucet. Graphics on the cards will flag one of seven do-it-yourself projects demonstrated by an employee donning the familiar orange Home Depot apron. These cards can cost the vendor about $1.50 each, not including the production expense for the content, compared to about 20 cents for a regular plastic card.
“Consumers know that in-store demos are the cornerstone of our brand so this is not a promotion; it’s a strategic offer that we’re making to our consumers with no up-charge,” said Manish Shrivastava, president of Home Depot Incentives. “We wanted the (gift card) to be a fit for what we stand for and from a brand perspective, it’s a great theme.”
POP designed by MSI, Chicago, will support, and additional advertising is being considered. Richards Group, Dallas, is the agency of record.
Circuit City was among the first national retailers to use the interactive gift cards last year. The store-branded card offered music downloads, a video game, screen savers and a link to a product catalog at circuitcity.com. In May, Circuit City partnered with Disney and rolled a collectible pre-paid card that included a Pirates of the Caribbean: At World’s End movie trailer and a pirate aptitude test.
Serious, a digital publisher with operations in New York, London and Singapore, makes the proprietary cards that have the magnetic stripe for storing value on the front and a hole in the center so it can be played on DVD players, Windows and Mac drives, and game consoles. The cards also feature scratch-off bars with PIN codes on the front to deter fraud.
Home Depot‘s gift card rack also will include Coca-Cola’s Polar Bears. Once activated, the cardholder can redeem the plastic at the store for a free 20-ounce bottle of Coke products. The pre-paid card lineup also will sport religious themes such as a manger scene for Christmas, a menorah for Hanukah and the three wise men for Hispanic customers who celebrate the Epiphany on Jan. 6. Also Uniworld, New York, designed a “Cool Yule” card targeting African American consumers featuring a snowman in a lawn chair.
Although pre-paid cards—a $76 billion business last year, according to the National Retail Federation—have been knocked as the impersonal gift, Shrivastava contends the branded DVD demos and the themes will change that perception for Home Depot cards. Besides, the cards tend to be used rather than sit in a drawer. Homeowners spend 43% of their disposable income on home improvement.
Source: Brandweek, 9/27/07
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