According to PYMNTS Intelligence, despite over half of card users possessing a store card, only 12% have utilized these cards for making purchases in the last 30 days.
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GLOStore cards, also referred to as retail cards or private-label cards, are credit cards issued by individual retailers or stores.
These cards are crafted for use exclusively at the store that issues them or within a network of affiliated stores. By providing discounts, special promotions, and exclusive offers on specific products, store cards aim to foster customer loyalty and boost sales. Simultaneously, rewards programs associated with store cards offer cardholders special perks like cash back, points, or discounts on future purchases.
During periods of sustained inflation and heightened economic uncertainty, such as the current situation, consumers tend to be more strategic in their spending, seeking options that can result in savings at the end of the month. One approach may involve maximizing the benefits offered by their store cards.
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According to PYMNTS Intelligence, despite over half of card users possessing a store card, only 12% have utilized these cards for making purchases in the last 30 days. Furthermore, 87% express interest in employing card-linked offers associated with specific products, yet only 40% have utilized such offers in the past 12 months. This indicates an underutilization of store cards by consumers. The primary reason for this underuse is a lack of familiarity, with many store card owners citing this as the main factor for not utilizing card-linked offers in the past.
These are some of the insights found in “Leveraging Item-Level Receipt Data: How Personalized Card-Linked Offers Drive Store Card Usage,” a PYMNTS Intelligence and Banyan collaboration.
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Merchants have the potential to enhance consumers’ utilization of store cards by introducing additional benefits. According to the study, rewards (preferred by 50% of respondents), discounts, bundled offers, and coupons (equally favored by 50%), along with free shipping (preferred by 44%), rank as the top benefits that card users would most appreciate in store cards as part of a card-linked, product-specific offer program.
A noteworthy finding from these results is that, despite current economic uncertainties and a decline in purchasing power, consumers place equal value on direct discounts and rewards. They exhibit a preference for earning points and miles through loyalty programs (in 42% of cases) rather than exclusive offers (at 34%) or free gifts (at 29%).
In the fiercely competitive retail landscape, store cards and loyalty programs play a pivotal role in attracting and retaining customers over the long term. The disparity between the number of store card owners and the utilization of associated offers highlights untapped opportunities for store card providers to enhance customer engagement. Through strategic design and management of these programs, businesses can distinguish themselves from competitors and cultivate a loyal customer base.
