Charge and protect
Seven million people became victims of identity theft in 2003—an 80% increase versus the prior year, according to the research firm Gartner Group. Further research shows that 55% of Americans plan to use the Internet to buy "stuff." Next Estate Communications (www.nextestate.com) provides prepaid debit card programs through i-Gen® Free & Clear™, Green Dot™ and other brands, but as identity theft became an increasing concern for consumers, it seized the opportunity with the launch of its latest product, WebSecret™.
WebSecret allows consumers to shop online confidentially without fear of identity theft or compromising their financial information. A MasterCard or Visa product, WebSecret is a non-reloadable prepaid product that requires no personal information for its purchase or use. At a cost of $14.95, the product can be loaded with up to $500.
The Pantry (Sanford, NC) had been experiencing great success with Next Estate Communications' Green Dot prepaid MasterCard for more than two years, so when WebSecret was launched, The Pantry didn't even need to test it. As of October, the chain has been selling WebSecret cards in all of its 1,355 stores, with favorable results.
"We saw WebSecret as a value we can offer our customers," says Bob Reale, vice president of human resources and support services for The Pantry. "As we continue our efforts to offer a broad range of products and services, WebSecret is ideal for our customers who don't want to share their personal information when making online purchases."
Margins for the product are typically controlled by the re-seller, but the global average is $5 per purchase, or 30%, according to Next Estate. While the inventory is active, customers pay to have the account loaded. Re-sellers provide the cards at no cost to the retailer, which then sells them on consignment. KB
Keep on chargin'
"It's a great product for people who live on their cell phones," says Poulard. "I use 2,000 to 3,000 minutes a month myself, and I'm my own customer. It's ideal for my product mix and I make a 45% profit margin on the 15 to 20 I sell a day. And because it's disposable, people come right back to buy their next one from me."
Poulard has two displays in each of his stores—one on his counter that carries 12 to 14 units, and another floor rack that carries as many as 40 units. Products come color-coded by phone and model. KB
Decked out to dial
Extend your brand
No one understands the importance of communicating "brand" like Wawa Inc. (Wawa, PA). With its 100-year-old dairy, the chain established brand credibility with its customers through its own line of milk, then expanded with its own teas, juices and other drinks. Over the years, the Wawa brand evolved to include products outside the beverage cooler, such as coffee, foodservice and gas. The next installment in Wawa's brand portfolio is its own branded spring water. It's a chapter the chain had been considering for five or six years, but it hadn't become feasible until about 18 months ago.
"We hadn't developed the water line because, as we were investigating the possibility, the economics weren't there," says Gus Durso, Wawa's director of category management. "We weren't able to source the product at a lower cost than the leading brands available in our stores at that time. While we would have been expanding our brand, we ran the risk of eroding our margins."
Wawa entered into a relationship with a private broker a year ago to help it source a water manufacturer that could provide the right economics to establish its own brand. At the same time, Wawa was willing to eliminate domestic national bottled water brands from its stores. It wasn't an easy decision for Wawa, but the chain needed to give its fledgling brand room to grow. Wawa retained only three SKUs of Evian for customers with a thirst for imported spring water.
"There's only so much room in a store, and nowhere is that more amplified than in the cooler," says Durso. "There are only so many brands we could carry. Rather than competing with national brands, we decided to focus on our brand. It wasn't an easy decision, by far, but it's what we had to do to give our brand a chance. It was very difficult decision to eliminate our relationship [with our national domestic water manufacturer], since they had served our account well and together we had built their brand in our stores. But we needed to focus on expanding opportunities for the Wawa brand."
Based on the movement it had seen from other leading water brands, Wawa decided on several sizes for its water SKUs: 1/2 liter flat cap, 1 liter flat cap, 1.5 liter flat cap, 24-oz. sport cap, 1/2 liter six pack flat cap, 1 gallon and 2.5 gallon, with pint and liter flat cap sizes available through Wawa's wholesale division. The 550-store chain prices its water on par with leading national domestic brands.
