Private Label Credit Cards in the U.S., 9th Edition

May 13, 2015
123 Pages - Pub ID: LA5552943
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Private Label Credit Cards in the U.S., 9th Edition



Packaged Facts provides a concise overview of trends shaping the private label credit cards market, giving you efficient insight into themes and topics taken up in thorough detail. Private Label Credit Cards in the U.S., 9th Edition covers the U.S. market for private label credit cards, emphasizing retail credit card program features and benefits analysis, retail card strategies and growth trends among bank and non-bank issuers, and trend and opportunity spotting.


Trends & Opportunities in the Private Label Credit Cards Market

The retail industry is shifting quickly to mobile, premised on the customer's expectations of getting what they want in an immediate context. These growing demands for consumers convenience are readily apparent in the private label credit card market. The shift to mobile in the private label credit card industry is brought about by a mixture of mobile app technology, customer relationship management advances, geolocational marketing initiatives, and closed loop virtual card payments. 

 For retailers, private label credit card platforms are increasingly essential for growth (and, sometimes, survival) as part of digital- and mobile-forward customer relationship and loyalty strategies.  As tabulated in this report, private label card usage trends are positive, and our proprietary consumer survey research findings indicate that the cards can meaningfully influence in-store payment decisions, retail purchasing, and personal information sharing. Per our analysis of the retail card landscape, Victoria’s Secret credit card and loyalty program exemplifies the movement to social marketing tactics, while New York & Company is upsetting the apple cart with a mobile app that can transact in-store payments. Technological advances will continue to drive retailer interest in private label card programs, as the movement to virtual private label cards housed within retailer mobile apps foretells the eventual demise of the physical card.

Private Label Credit Cards in the U.S., 9th Edition provides a wealth of actionable insight on trends shaping this resurgent industry sector.  The competitive intelligence in this report specifically includes:
  • Assessing the leading private label credit cards from the following retailers: Best Buy, Express, GameStop, The Gap, J.C. Penney, Kirkland’s, Kohl’s, Lowe’s, Sears, Shell, Target and Victoria’s Secret—to gauge program differentiation and related features and benefits; rewards and loyalty program structure; and online/mobile positioning.
  • Tracking the industry shift to mobile and digital, including mobile credit applications, the central role of mobile apps, mobile payments, multi-tender loyalty programs and enhanced data analytics.
  • Assessing the degree to which a variety of private label credit card features and benefits would incentivize consumers to sign up for a new private label credit card and to use a private label credit card more often.
  • Analyzing consumer shopping behaviors; social media brand & product engagement; and relationship between store card use and retail purchasing & information sharing.
  • Assesses the impact store cards have on the type of payment used at the point of sale; receptivity to promotional marketing; and tendency to act on that marketing.
  • Estimating loans outstanding and purchase value for the U.S. private label credit card market by issuer for 2014, and a receivables and volume forecast for 2015-2017.
  • Analyzing the U.S. private label card programs operated by North America’s leading financial institutions, including Alliance Data Systems, Citi Retail Services, Capital One, Synchrony Financial Services and Wells Fargo, including growth strategies, private label card purchase value and loans outstanding by retailer, number of retail partners.
  • Trending branded credit card and store card usage penetration, usage in past 30 days, and monthly usage frequency during 2004-2014, including demographic analysis for these metrics.
Executive Summary
Report Scope
Market size and forecast
Trends & opportunities
Transitioning to a digital world
The card fades into the background
Private label retail card landscape
My Best Buy Credit Card differentiation: robust rewards; major omni-channel loyalty push
ExpressNext Credit Card Differentiation: hitting Millennials were they live
GameStop PowerUp Rewards Credit Card differentiation: aggressive loyalty platform
GapCard: steady as she goes
JCPenney Credit Card: strong incentive to spend now and return quickly
Kirkland’s Credit Card: rewards program kicks it up a notch
My Kohl’s Charge: easy to understand, simple
Lowe’s Consumer Credit Card Differentiator: card customization
Sears Card differentiator: Strong loyalty program association; weak rewards
Shell Drive for Five Credit Card: part of a larger credit puzzle; straightforward pitch
Target REDcard: ongoing upfront discount and novel approach to mobile
Victoria’s Secret The Angel Credit Card: targeting the customer and social media
Private label bank issuers
Alliance Data Systems
Capital One Financial
Citi Retail Services
Synchrony Financial Services
Wells Fargo
Private label non-bank issuers
Nordstrom
Signet Jewelers
Private label credit card usage trends
Trends over time
General-purpose and store credit card usage & usage in past 30 days
Demographic analysis
Private label credit card usage motivators
Influence on point of sale payment method & customer receptivity to promotions
Private label card signup & usage frequency influencers
Shopping frequency, shopping & social media attitudes
Men vs. women
Chapter 1: Overview
Major retailer benefits: usable data and customer loyalty
Major cardholder benefit: buying power
Chapter 2: Market Size and Forecast
Loans outstanding and purchase value by issuer
Table 2-1: U.S. Private Label Credit Card Loans Outstanding & Purchase Value, by Issuer, 2014
Private label issuer loan and purchase value trends
Table 2-2: U.S. Credit Card Loans Outstanding & Purchase Value: Synchrony Financial Services,Citi Retail Services & Alliance Data Systems, 2012-2014
Private label issuers’ cobrand share
Table 2-3: U.S. Private Label & Co-brand Credit Card Loans Outstanding & Purchase Value: Alliance Data Systems, Citi Retail Services & Synchrony Financial Services, 2014
Private label cards market forecast
Post-recession private label usage rebound
Chapter 3: Trends & Opportunities
Transitioning to a digital world
Shift to mobile
What it all means
Mobile customer acquisition
Private label customer acquisition strengths
Adapting to mobile trend
For your best customers: A remote control to the entire brand
JCPenney & Sephora
Table 3-1: Share of JCPenney Online Traffic, by Device, 2012-2014
Location-based marketing is here
Alliance Data beating PayPal Beacon and Apple iBeacon to the punch?
Interactive in-store experiences
Shoe Carnival mobile app
Digital cards = mobile payments?
Alliance Data systems’ take on virtual cards: no thanks, Apple
Macy’s My Wallet
Does Samsung Pay have the edge over Apple Pay?
The card fades into the background
Building loyalty
Multi-tender loyalty programs
Case in point: My Best Buy loyalty program an omnichannel play fueled by Big Data
Alliance Data Systems exhibits CRM and loyalty program leadership
To co-brand or not to co-brand?
Chapter 4: Private Label Retail Card Landscape
My Best Buy Credit Card
Differentiation: robust rewards part of major omni-channel loyalty push
Rewards: the nuts and bolts
Program enhancements and changes
My Best Buy: Not just a change in name
Three tiers
Online and mobile
An omnichannel play fueled by Big Data
ExpressNext Credit Card
Differentiation: hitting Millennials were they live
Rewards
The name’s the thing
The fine print
Online and mobile
Information is power
GameStop PowerUp Rewards Credit Card
Differentiation: bare-bones card; aggressive loyalty platform
Loyalty program: nuts and bolts
Scoring points works in real life, too
Basic Rewards or Pro Membership?
The weak spot: redeeming points
The marketing makes a mark
Online and mobile
GapCard
Differentiation
Solid signup and rewards mix
Spend $800 and get upgraded to Gap Silver
Online and mobile
JCPenney Credit Card
A rich mix of incentives and rewards
With a catch
Differentiator: strong incentive to spend now and return quickly
Tiered rewards
Online
Kirkland’s Credit Card
Differentiation
Rewards made easy
Online and mobile
Spin To Win
My Kohl’s Charge
Differentiation
Key incentive
More spending, more savings with the Most Valued Card
Yes2You Rewards
The fine print
Online and mobile
Lowe’s Consumer Credit Card
No-interest financing at sign up
The fine print
Differentiator: card customization
Online and mobile
Rewards in Name Only
Sears Card
Differentiator: Strong loyalty program association
Shop Your Way Rewards
Table 4-1: Sears Card Shop Your Way Rewards
Table 4-2: Sears Card VIP Tiers
Online and mobile
Shell Drive for Five Credit Card
Differentiation
Rewards
Earning Points
Redeeming Fuel Rewards
The fine print
Online and mobile
Target REDcard
Differentiator
Everyday discounts emphasized
Charity in the name of marketing
Online and mobile
Cartwheel takes novel approach to mobile
Victoria’s Secret Angel Credit Card
Differentiation
The nuts and bolts
Table 4-3: Adults Who Shopped at Victoria’s Secret in Past Three Months & Past Four Weeks, by Demographic, 2014
Embracing social with a passion
Information is power
Chapter 5: Private Label Bank Issuers
Alliance Data Systems
Competitive positioning
A private label card player . . .
. . . Disguised as a digital-forward loyalty and CRM expert—or it is the other way around?
Approaching $20 billion in purchase value
Retail partner momentum
Portfolio acquisitions
More than 125 private label credit card brand relationships
Table 5-1: Alliance Data Systems: Q1 2013 Private Label Credit Card Retailers
Key private label credit card retailer accounts
Ascena Retail Group, Inc.
Bon-Ton
HSN
J. Crew
PayPal Credit
Pier 1 Imports
Victoria’s Secret propels L Brands to top purchase value and loans outstanding spot
Table 5-1: Alliance Data Systems, Purchase Value & Loans Outstanding by Major Retail Partner, 2014
Performance analysis
Robust volume, receivables and account growth
Cobrand share
Table 5-2: Alliance Data Systems Private Label Revenue, Volume, Receivables and Account Trends,2009-2014
A look inside Alliance Data’s subsidiary banks
Table 5-3: Alliance Data Systems: Comenity Bank & Comenity Capital Bank Card Metrics, 2014(in millions of dollars)
Capital One Financial
Competitive positioning
Acquisitions and sales
Retail partnerships
Hudson’s Bay
Kohl’s
Neiman Marcus
Performance analysis
Table 5-4: Capital One Financial Corporation: U.S. Credit Card Purchase Value and Loans Outstanding, 2011-2014
Private label share
Table 5-5: Capital One Financial Corporation: U.S. Private Label Credit Card Purchase Value, Selected Programs, 2014
Citi Retail Services
Retailer partnerships
Table 5-6: Citi Retail Services Retail Private Label & Co-brand Partners, 2015
Signings and acquisitions
Key retailers
Best Buy
Macy’s
Sears
Performance analysis
Table 5-7: Citibank North American Card Purchase Value & Loans Outstanding: Retail Services vs. Citi-Branded, 2010-2014
Spend and loans outstanding per account on the upswing
Cobrand share
Table 5-8: Citi Retail Services: Credit Card Purchase Value, Loans Outstanding and Open Accounts,2010-2014
Synchrony Financial Services
Overview
Table 5-9: Synchrony Financial Services Synchrony Financial Purchase value, Loan Receivables,Accounts and Revenue, by Segment, 2011-2014
Table 5-10: Synchrony Financial Services Purchase value, Loan Receivables, Accounts and Revenue,by Segment, Q1 2014 vs. Q1 2015
Payment Solutions
Payment Solutions partners
Major source of partner sales
Graph 5-1: Synchrony Financial Services: Payment Solutions Segment: Purchase value and Loan Receivables, by Retail Partner, 2014
Retail Card
Table 5-11: Synchrony Financial Services: Major Private Label/Co-brand Retail Partners, 2015
Partner movement and segment growth
Wins, renewals and losses
Growth strategies: grow private label share of partner sales & grow partners
Own-branded card on the way
Key private label credit card retailer accounts
Table 5-12: Synchrony Financial Credit Card Trust Loan Receivables & Account Share, 2015 (in millions of dollars and of accounts)
Walmart tops in Retail Card receivables
Table 5-13: Synchrony Financial Private Label Credit Card Receivables, by Retail Partner, 2015
Lowe’s
PayPal
Performance analysis
Positive loan growth and account growth trends
Sizeable cobrand share
Table 5-14: Synchrony Financial Retail Card Purchase Value, Receivables & Partners, 2011-2014 & Q1 2014-2015
Synchrony Bank income, credit card loans and credit card lines outstanding
Table 5-15: Synchrony Bank Credit Card and Loan Metrics, 2014 (in millions of dollars)
Wells Fargo
Table 5-16: Wells Fargo Retail Private Label & Co-brand Partners, 2015
Chapter 6: Private Label Non-Bank Issuers
In-House Programs: Nearing Extinction
Nordstrom
Nordstrom Rewards
Big changes
Multi-tender program launch
Portfolio sale?
Program metrics
Revenue growth trends
A prime portfolio, with more prime borrowers
Saving on interchange
And making money on interchange
Private label receivables lag cobrand but are growing at higher rate
Card program charge volume nears $10 billion, most of which occurs in-house
Table 6-1: Nordstrom Credit Card Metrics Analysis, 2010-2014
Nordstrom FSB income, loan and unused credit line analysis
Table 6-2: Nordstrom FSB Net Income and Credit Card Interest & Noninterest Income, 2014(in millions of dollars)
Signet Jewelers
Table 6-3: Sterling Jewelers U.S. Credit Program Metrics, 2011-2015
Chapter 7: Private Label Credit Card Usage Trends
Introduction
Credit card usage trends over time
Percentage of credit card users on the upswing
Department store card usage growth outstrips branded credit card usage growth
Figure 7-1: Credit Card, Branded Credit Card & Department Store Card Usage Penetration, 2004-2014
Active department store card rebound much stronger than general-purpose card increase
Figure 7-2: Credit Card Usage Past 30 Days: General-Purpose Cards vs. Department Store Cards,2004-2014
Table 7-1: Credit Card Usage Past 30 Days: General-Purpose Cards vs. Department Store Cards,2004-2014
But usage frequency among active general-purpose cared users leads department store cards
Table 7-2: Credit Card Usage Frequency Share, Department Store Cards vs. General-Purpose Cards,2004-2014
General-purpose and store credit card usage & usage in past 30 days
Store card engagement trails branded counterparts
Table 7-3: General-Purpose & Store Card Usage, Active Usage & Engagement Rate, 2014
Demographic analysis
Women continue to drive private label credit card use
Table 7-4: General-Purpose & Store Credit Card Usage & Active Usage, by Demographic, 2014
Women dominate higher-frequency monthly store card use
Table 7-5: General-Purpose & Store Card Monthly Usage Frequency, by Demographic, 2014
Chapter 8: Private Label Credit Card Usage Motivators
Store credit card used most often: payment preferences at retailer
Store credit card is preferred method of payment
Figure 8-1: Store Card Used the Most: Forms of Payment Used at Store Retailer, 2015
Preferences by demographic
Table 8-1: Store Card Used the Most: Forms of Payment Used at Store Retailer, by Demographic, 2015
Store credit card influence on shopping frequency
Table 8-2: Store Card User Tendency to Shop More Often at Retailer, by Demographic, 2015
Views on receiving promotional information from store credit card merchant
Table 8-3: Store Card User Views on Receiving Promotional Information from Retailer, by Demographic, 2015
Acting on receipt of promotional information from store credit card merchant
Table 8-4: Store Card User Tendency to Act on Receipt of Promotional Information from Retailer,by Demographic, 2015
Private label card signup & usage frequency influencers
Motivator roundup
Points & everyday discounts most prevalent signup influencers
Interest rate teasers also relevant
Special savings days trump other savings promotions
Motivators more likely to influence sign up than increased usage
Table 8-5: Private Label Credit Card Motivators to Apply for Card & Use Card More Often: Users & Active Users, 2015
Gender rules
Table 8-6: Private Label Credit Card Usage Motivators: Non-Active Users, by Gender, 2015
Age
Table 8-7: Private Label Credit Card Usage Motivators: Non-Active Users, by Age, 2015
HH income
Table 8-8: Private Label Credit Card Usage Motivators: Non-Active Users, by HH Income, 2015
Chapter 9: Shopping Frequency, Shopping & Social Media Attitudes
Shopping frequency, shopping & social media attitudes
Men vs. women
Women are core department store shoppers and purchasers
And more engaged with brands and products on social media
Table 9-1: Shopping Frequency and Shopping & Social Media Attitudes, by Gender, 2014
Female store card usage correlation to retail purchasing and information sharing
Table 9-2: Shopping Frequency and Shopping & Social Media Attitudes Among Female Store Credit Card Users, 2014
Appendix
Methodology
Consumer survey methodology
Market size and forecast
Report table interpretation
Terms and definitions

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