Blackhawk Network Brings Its One-Stop Shopping Gift Card Mall Program to Kroger Stores

Implications: Blackhawk Network teams up with Kroger Stores to afford consumers to shop conveniently for prepaid gift cards while picking up groceries, filling  prescriptions or other retail items. Blackhawk Network will offer Kroger's customers the variety, selection and convenience consumers seek, which are the key elements to implementing a successful Gift Card Mall Program. From leading brands in every category; grocery, drug, convenience stores and speciality stores, Blackhawk will distribute more than 100 retailers' gift cards in Kroger Stores. The Prepaid Card market is projected to reach $421.5 billion by 2010, representing a CAGR of 17%. This includes closed loop (store branded cards) and open loop (network branded cards - Visa, MasterCard, etc.). Funds loaded onto distributed in-store gift cards grew by 88% from 2005 to 2006, to $3.7 billion, which is up from $500 million in 2003. Kroger is banking on its partnership with Blackhawk Network to capture some of this market share.

Analysis: Kroger Stores has teamed up with one of the largest Gift Card Mall Networks, Blackhawk Network, to rollout Blackhawk's Gift Card Mall Program in its grocery stores and affiliate stores. Blackhawk Network developed the Gift Card Mall concept which involves one permanent in-store display that is equipped to carry major branded cards in all the categories consumers want, including gift, sports, telecommunications, open loop gift cards, (Visa, MasterCard, AmEx & Discover), tickets and reloadable products. Blackhawk's Gift Card Mall Program may create a win-win for consumers, retailers and card partners.

1.  Consumers enjoy a variety of choices with Blackhawk's Network one-stop shopping concept, retailers may experience an increase in foot traffic in their stores which could generate incremental revenue and card partners may gain new customers, who typically spend more than the face value of the gift card(s) received when redeeming the cards


2.  Gift cards continue to grow in popularity during the holiday season and gift cards is one of the most desired holiday gifts. Convenience and variety may make gift cards appealing to consumers, who have either given or received a gift card and enjoyed their experiences with them and they often become repeat customers, which is what Kroger and Blackhawk Network hope to achieve

Takeaway:  Consumers can shop at a single location, the Blackhawk Gift Card Mall and pick-up a different gift card for everyone on their holiday list and Blackhawk's one-stop shopping mall may help consumers relieve some of the stress of holiday shopping and choosing what to buy for everyone on their holiday list and the recipient of the gift card(s) can choose the gift of choice from their favorite store. Blackhawk Network is an innovator in the Prepaid industry with its Gift Card Mall concept and Kroger will utilize Blackhawk's expertise to potentially increase foot traffic in its stores, gain market share and could provide Kroger Stores with a viable and growing revenue stream from gift card sales.