Everywhere Merchants Want to Be

Posted on by Chief Marketer Staff

Visa USA will give its retail partners magic for Christmas this year, part of an aggressive slate of consumer promotions designed to drive purchases in stores that accept the credit card.

San Francisco-based Visa has also begun to deepen its promotional ties with grocers, signing with Ralphs Grocery Co. this spring for a series of promos in Ralphs’s 260 California stores.

The Visa Magic Moments holiday campaign declares a random moment every week a “magic moment,” and all purchases made at that minute are free. The estimated $50 million campaign runs Nov. 1 through Dec. 31, a key season for Visa as well as its retail partners. Winners are notified by a special credit on their monthly statement. There’s no limit to the number of winners, or the amount of purchase eligible to win. National radio, print, mall posters, and Internet ads will support. Frankel & Co., Chicago, handles the promo.

Visa’s consumer research shows that 78 percent of consumers said Magic Moments would encourage them to use their cards more often. The campaign builds on the longtime Visa Rewards program that randomly chooses cardholder purchases for free. Rewards is slated for July and November; it already has run in February and May this year.

Ready-made for Ralphs Visa also is laying the foundation for tailored quarterly promotions in supermarkets. The Ralphs deal extends Visa’s promotion push beyond generic grocery campaigns to more retailer-specific efforts. “Supermarkets are such a fragmented business that [Visa] promotions have been turn-key. Now we’re trying to form stronger relationships with top merchants – mostly for marketing, but we’ll look at new-product opportunities as well,” says Bruce McElhinney, Visa’s senior vp-merchant development and acceptance.

Supermarkets are “an enormous area of new growth” for Visa, he says. Visa’s supermarket sales hit $22 billion in 1997, up from $600 million in ’91, the year Visa began supermarket promos. The company projects supermarket sales will hit $28 billion this year, about 7 percent of Visa’s total sales.

Supermarkets “came from nowhere in ’91 to become the largest merchant category we have,” McElhinney says.

That’s good news for package goods companies. Visa is partnering with them as well, directly and via retailers. Ralphs brought Coca-Cola to the table for the inaugural joint promo in April: Shoppers who spent $75 or more got a free 12-pack of Coke. An earlier sweeps with Colavita Oil gave shoppers in 1,500 supermarkets an automatic entry for every Colavita purchase. Grand prize was a trip to San Francisco, Visa’s hometown.

“We can provide a thematic umbrella for manufacturers,” McElhinney says. “We’re an NFL sponsor, so grocers could run a tailgate party theme, with a Visa-driven sweeps overlay. Our software lets us administer such a sweepstakes without additional entry forms.”

Visa also is eyeing grocers’ loyalty cards. “I think we’ll see a convergence of payment and promotion in the future, probably with a computer chip card,” McElhinney says. With 30 percent of grocers running a loyalty program and 30 percent more planning one, “how can they get people to carry another card? We can take grocers’ built-in reward program, add a payment component, and increase the chance people will carry that card.”

Beyond the Market Basket Visa also is reprising two promotions that were popular with retailers and consumers last year. The Read Me a Story program will run from August through December to raise money and awareness for non-profit literacy foundation Reading Is Fundamental (RIF). Visa will donate a minimum $250,000 to RIF this year, with donations pegged to card usage. Frankel handles the campaign, which won the PMA’s Super Reggie in 1997.

This summer, Visa will re-run its Famous Streets of America sweepstakes awarding a $25,000 spree in one of nine tony shopping districts, including Beverly Hills Rodeo Drive, Midtown Manhattan, and Chicago’s Michigan Ave. Merchants on each of the nine streets also will have gift-with-purchase and special deals for Visa cardholders. Highway One, San Francisco, handles the campaign.

The posh setting for Famous Streets reinforces Visa’s image of ubiquitous acceptance while elevating it beyond being a workhorse card for grocery shopping and the like.

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