Thought Leaders in Mobile and Social: David Stone, CEO of CashStar (Part 4)

SM: Oh, I see. So, the electronic gift card can be used at a store.

DS: Exactly. We’re connecting the online and physical world. In fact, most of the cards – and there are millions that we’ve done – can be used in the physical world. It has a bar code on it, and you walk into CVS or BestBuy or wherever, and it gets scanned just like a coupon or anything else. Or you can bring it in on your mobile phone. Some retailers, like Starbucks, scan it instantly off the phone.

SM: So, the bar code is on the phone and gets scanned by the bar code reader?

DS: Exactly. So, not only can you be walking into Starbucks and looking at the image of the card and the personal message, like “here’s a pick-me-up on me” or a Valentine latté with my picture on it. But you can then put that image of the bar code on the scanner and get it scanned right off the phone. How cool is that?

SM: And how does it work when you’re trying to use the card in an online store, let’s say BestBuy online or Williams Sonoma online?

DS: It has a 19-digit number.

SM: Okay, so it’s number-based at that point.

DS: Exactly.

SM: Okay. That’s great. Now, let’s step back. Give me an evolutionary look at what has been going on in this industry. We effectively started with the Internet as a consumer tool in the mid ‘90s. If you trace from there, what have been some of the steps in the evolution of the gift card, the prepaid card, digital loyalty programs? What have been some of the major trends that you have seen through that timeframe?

DS: First, we started with paper products. There were gift certificates that retailers had. That was the old fashioned way, and a lot of them still do. You go to the store, and they fill out a piece of paper and give it to you, and you bring it home and, hopefully, remember you still have it. Then we created the American Express Gift Cheque, which also was a paper product. And then, as we came to the end of the century, plastic started to become more in vogue. It’s what I call the plastic card era. I now call this the post plastic card era or A. P. for after plastic. So, as the digital age, sort of the third act, emerged – and it’s still emerging – first with the PC and the Internet being the drivers, as you well know. Now, the age of mobility and potentially social activity are additional forces that we’re trying to figure out.

Those things all generate fundamental changes in the way consumers are gifting and the way retailers are building loyalty. We see plastic as anachronistic. The bank card industry and the gift card industry are so dominated by plastic still. We’re all living on our digital devices more and more. So, the emergence of digital gifting and loyalty is coming, and it’s coming fast. We see a wealth of opportunity here for innovation. We’re, obviously, part of that and just see tremendous opportunity around a number of different not only channels but form factors.

If you think about mobile for a second, which I think is a potentially major catalyst, mobile changes everything. I’ll give you two examples how. We introduced mobile Web gifting this year, and all of the Gap brands – the Gap  brands are Old Navy and Banana Republic and Athleta and a couple others –  and all of the Williams Sonoma brands – Pottery Barn and West Elm and some others –adopted it. In the Gap’s case, they were smart. They put up QR codes in their stores, and when you brought your mobile phone in and put it next to a QR code, it brought you to the mobile Web. As you probably know, there are two ways people use mobile for purchasing:  They either use an app, or the use the Web. In this case, with our product, if you were in the Gap and you were looking to buy a sweater or piece of costume jewelry or whatever for your friend or a family member, and they didn’t have it in stock, or it was the wrong color, you could actually go on your phone, pull up the mobile Web gift card site and send your friend an instant e-gift. It certainly changes the game of distribution.

The second use case, which I really get excited about, is I’m driving up to a friend’s house for a birthday party or special event or anniversary, and I see people carrying gifts in. I say, “Oh, my God, I forgot to bring something.” So, I go on mobile phone, order the gift, send it to my friend. And I say, “Did you check your phone, Matt?” And Matt checks his phone or iPad and there’s his gift with a very personal message on it. For me, that is just a fundamental, dramatic change in the way people gift.

This segment is part 4 in the series : Thought Leaders in Mobile and Social: David Stone, CEO of CashStar
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