Taking a slice of restaurant gifting
With a strong commercial relationship in place for a number of years, Barclaycard saw an opportunity for Tragus to increase the visibility and value of its existing paper voucher programme and approached the brand in 2011 to assess the fit of a gift card programme in Tragus’ overall marketing programme.
In September 2011, Tragus launched three distinct gift card programmes, one for each of its brands, in over 8,000 gift card mall locations across the UK including Sainsburys and WH Smith.
Each brand had its own card design and can only be redeemed in that chain of restaurants. The company plans to extend its mall programme to include Tesco and ASDA, in-store and online sales to benefit even further from the multi-channel reach and capability of Barclaycard’s prepaid platform.
Gift vouchers – ‘available on request’
Like many restaurants and retailers, Tragus’ restaurant chains each had an existing paper gift voucher programme but, like many others, these vouchers weren’t treated like a product and weren’t actively marketed to customers – they were simply available if a customer requested one. As a result, the company wasn’t capitalising on the very significant potential of the restaurant gifting market.
“The fact that Barclaycard had the ability to sell and redeem gift cards via our existing point of sale terminals was a huge plus.”
Barclaycard had a commercial relationship with Tragus for many years. In the previous 12 months Barclaycard noted a number of restaurant gift cards had started to appear, many of which were direct competitors of Tragus. These restaurant gift card programmes were experiencing positive and visible results for their organisations.
When, in April 2011, Barclaycard approached the Tragus marketing team with its prepaid offer, the response was very positive. Commented Derek Risk, IT Director at Tragus, “We had noted the launch of gift card programmes by key competitors and indeed the expansion of their programmes across multiple restaurant brands. We knew they were having commercial success, so Barclaycard’s approach around the same time we were actively considering our options, was perfectly timed.”
So what did Tragus consider to be the key reasons for adopting a gift card programme?
They saw it as a great opportunity to drive sales
They recognised that gift cards are a great way to get their brand in front of the consumer and to help recruit new customers to the brand.
It addressed a product gap against competitors who had deployed successful gift card programmes
A quick & simple gift card solution
Given that Tragus already had a commercial relationship with Barclaycard for card processing across all 295 restaurants; and that many of the point of sale terminals in their restaurants were already ‘gift card ready’, the activation of their gift card programme was very straightforward.
“The fact that Barclaycard had the ability to sell and redeem gift cards via our existing point of sale terminals was a huge plus,” said Derek. Barclaycard engaged the specialist support of its prepaid partner Savvy during the early stages of negotiation with Tragus. Given that there were few technical barriers to deployment, the conversation quickly moved to customer engagement, broadening distribution channels, programme launch planning, go to market strategy and day-to-day operational implications.
“Barclaycard were extremely helpful during the presale process which helped to establish a positive working relationship before; during, and now after project completion.”
In addition, the team had to consider brand protection – although they were deploying a single programme, it was essential to Tragus that its three brands – Bella Italia, Strada, and Café Rouge – maintained their own unique identities and positioning.
Following several meetings and ongoing discussions between Tragus, Barclaycard and Savvy, the rollout plan was finalised and, key to it, Tragus’ go-to-market strategy, which would initially take advantage of third party channels including gift card malls and the B2B sector (which accounted for 55% of all gift card and voucher sales in 2011*).
According to Derek Risk, “Barclaycard were extremely helpful during the presale process which helped to establish a positive working relationship before; during, and now after project completion”.
A ‘Hub’ strategy – one prepaid programme deployed across multiple sales channels
Tragus wanted to deploy three separate giftcard programmes but under a single prepaid master programme and Barclaycard’s prepaid solution allowed them to do just that. In effect, although managed centrally, Tragus was able to deploy distinct gift card programmes for each of its brands, in terms of both card design and restaurant acceptance.
Through its online portal, Barclaycard’s solution allows Tragus to easily breakdown sales performance by both restaurant brand and individual sales channels (allowing them to control how well gift card malls and B2B agencies are performing and assess if discounts offered are appropriate to the level of sales delivered).
The Tragus gift card programme went live in September 2011, on schedule and to budget. Key programme highlights included:
- Over a period of just eight weeks while the card production process was underway, terminals in all 295 Tragus restaurants were enabled for gift card transaction processing, allowing them to communicate securely and in real-time with Barclaycard’s prepaid host
- Tragus negotiated with the gift card malls to sell gift cards for each of its three restaurant brands in over 8,000 outlets across the UK including WH Smith and Sainsburys
- Tragus created a unique and distinctive gift card design for each of its three restaurant brands and passed them to Savvy who managed the entire card procurement process
- The rollout of the cards to the gift card malls included an extensive testing and certification process (managed by Savvy)
- Savvy carried out staff training on the programme control and reporting portal, Card Manager, including the creation of several bespoke reports required by Tragus
- Tragus rolled out eGfit in 2013 on Cashstar’ digital gift platform
Since its launch in September 2011, the gift card programme’s sales performance has exceeded Tragus’ expectations. While the B2B channel is still in development, performance in the current gift card malls started well and has continued to grow since. With Tragus gift cards launching in malls in Tesco and ASDA stores and with the introduction of in-store and online sales channels, the organisation will be able to maximise the multi-channel reach and capability of Barclaycard’s prepaid platform.
In summary, Derek Risk, IT Director in Tragus stated, “Having a provider like Barclaycard who can support you every step of the way was vital. I also feel that getting early product sign-off and executive buy-in helped us get early momentum which was critical to getting to market ahead of the peak Christmas trading period”.
What advice would Barclaycard offer to other retailers?
“The Tragus story is an excellent example of the right product at the right time for the right customer. We were able to address challenges across technical, commercial and operational areas in a collaborative fashion and did so at a competitive cost in a swift timeframe. The biggest lesson for retailers from the Tragus story is that gift cards can play a key part in your quest for recruiting and retaining customers and that we will work with our customers to deliver the appropriate gift card solution for their needs”.
Corin Flett, Product Manager
Barclaycard Payment Acceptance