Growth Through Consolidation
Updated: Feb 21, 2019
In the last 4 weeks, 3 major mergers have happened in the branded currency industry. Consolidation has become the name of the game for all of us. Generally it has been viewed as an annoyance: we lose our direct contacts, have yet another barrier to get through, it throws off our sales reports and shifts the B2B discounts we have spent time setting up. But what if these small annoyances are leading to a stronger place for branded currency among payments? Let's break down what has been going on:
January 16, 2019: Fiserv Acquires First Data
Many of us in branded currency have not worked with Fiserv before. They don't really touch the closed loop space. So joining forces with First Data, a company who has acquired small but powerful companies like Gyft and Transaction Wireless in the past, means these companies now have access to some great technology that has been built for banks.
We at K+H Connection and Flourish have said it before, banks and merchants have very similar issues; we just put different labels on them. If these companies can merge and bust down some silos, to take a look at the products they have built independent of each other, with a fresh perspective; we could see some very cool advancements for the gift card, loyalty, prepaid and promotional value spaces.
February 12, 2019 TangoCard Acquires GiftCertificates.com
This merger makes a lot of sense to me. TangoCard has been able to streamline and simplify the integration process for companies looking to have access to bulk gift cards. This has attracted new, tech savvy companies and opened up opportunities in the B2B marketplace. TangoCard has kept their service offerings clear and simple; which has allowed them to build quickly and grow. GiftCertificates.com was one of the companies that paved the way in B2B. They have long standing relationships and offer robust reward solutions that TangoCard did not. We are excited to see what this interesting combo creates in the future.
February 13, 2019 New Teraco and Archway Combine Businesses
Archway has been providing marketing logistics and fulfillment services for many years, in multiple industries, and has high value partnerships. If you work for a merchant in the US, you probably worked with Archway for one part of your business at some point. New Teraco has quietly been making moves for the last year now. They have been making investments in technology and re-branded from Teraco to New Teraco. This combination with Archway will make their new platform a truly one-stop shop for gift card or loyalty programs. We predict this will be very appealing to newer retailers who are looking for an all in one solution as they enter the gift card market.
So why the excitement about this?
As someone who has managed my fair share of B2B gift card portfolios, I used to roll my eyes and think, "great now my reporting is going to be off and yet another direct relationship is going away". But, the data is showing us that the gift card industry is not slowing down. We are in major growth mode.
The worst thing we can do is maintain the status quo. If we want to see growth, we have to go through the pains, adjust the way we measure our programs and understand that top line sales growth is the old way of thinking.
Gift card sales should be measured by marrying issuance and redemption data with POS data, with SKU numbers and loyalty program data. A gift card is only as powerful as we allow it to be. Gift card has to be a part of the customer experience; and this might mean our jobs as gift card, loyalty or promotions manager has to shift and become more collaborative- just like the mergers and acquisitions in the first 6 weeks of the year have shown.