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Retailer Cards in Europe: Co-Branded, Loyalty and Private Label Programs
Finaccord, June 2010, Pages: 300
Retailer Cards in Europe: Co-Branded, Loyalty and Private Label Programs is a report, based on a survey of 3,175 prominent retail brands in 32 countries, about the provision of payment cards and loyalty programs by major retailers across Europe. Retailer participation in coalition loyalty schemes is also considered.
Countries covered are Austria, Belgium, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Netherlands, Norway, Poland, Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, UK, and Ukraine.
In total, the research identifies over 800 retailer payment cards,1,100 proprietary retailer loyalty programs and 50 coalition loyalty schemes, thereby providing a definitive analysis of retailer co-branded, loyalty and private label programs in Europe that goes far beyond the scope of previous published research. Moreover, the PartnerBASE™ database that accompanies the report details each of the many initiatives for retailer credit, deferred debit, debit and rechargeable pre-paid cards traced by Finaccord, specifying the operating models used by retailers, the payment networks to which the cards are affiliated and the identity of the ultimate card issuers in each case.
This report and the PartnerBASE™ that accompanies it can be used in one or more of the following ways: gain rapid access to a unique pan-European source of intelligence covering virtually all significant retail brands across an extremely wide range of geographies; monitor the activity of key national and international competitors in the retailer payment card sector including the many European subsidiaries of Barclays, BNP Paribas, Citibank, Crédit Agricole, Deutsche Bank, GE Capital, HSBC, IKANO, Santander and Société Générale; evaluate the potential for acquiring the existing cardholder portfolios of retail groups by purchasing equity stakes in captive card issuing entities; understand the potential in each country for converting existing proprietary retailer loyalty cards into fully-fledged payment cards; learn more about the growing number of coalition loyalty programs across Europe including the payment cards that have been launched as a result of their popularity: coalition schemes researched include AIRMILES, Bonus Card, Deutschland Card, Maximiles, Multipont, Nectar, PAYBACK, Pika, Plussakortti, Supercard, Trumf and Webmiles.
What is the rationale?
A number of factors, some of which are specific to co-branded and private label or store cards and some to retailing, provide the rationale for the development of this report. With reference to cobranded and private label or store cards, in particular, the following assertions can be made:
- the credit, deferred debit and pre-paid card markets of many countries are continuing to grow and retailers can take advantage of this through co-branded or store card programs;
- the experience of card issuers is that the profitability of successful co-branded card schemes, including retailer programs, usually exceeds that of standard credit cards;
- indeed, in terms of the outright number of schemes worldwide and, probably, as measured by the pure number of cards issued, retailing is the most important co-branding arena for card issuers;
- once private label store cards have built up a substantial customer base, these can be converted into general purpose, international payment cards;
- the customer information gathered from co-branded or store cards can be used to cross-sell banking, insurance and other services;
In addition, proprietary and coalition loyalty schemes that amass a significant number of members can eventually be converted into cards with a payment function, thereby providing justification for their inclusion in this publication. Indeed, coalition loyalty programs can be particularly important in terms of the number of members that they accumulate and the number of active programs in Europe is continuing to increase each year. These encompass a variety of initiatives including bank-owned schemes, online programs and propositions oriented primarily to travel rewards. Furthermore, dynamics in the retailing market itself also give rise to increasing rationale both for cobranded and private label or store card programs and a comprehensive pan-European study on the subject.
Key developments in the retailing sector include:
- increasing usage of payment cards, generally, as a payment mechanism in preference to cash, cheques and other traditional alternatives, thereby encouraging retailers to develop their own cards in order to capture a share of the payments market;
- retailer consolidation in both more and less developed markets which helps to produce national champions with the branding, muscle and general profile needed to succeed in the payment card sector in these countries;
- retailer growth in the less developed markets as an increasing proportion of consumers allocate their expenditure to formal retailing concepts as opposed to informal street markets and the like;
- a mature environment for retailing in the more developed markets which signifies that retailers need to investigate new means of achieving revenue growth which can include financial services, in general, and co-branded or store cards, in particular;
- increasing internationalization which potentially paves the way for cross-border alliances between retailers and mainstream card issuers as epitomized, for example, by the link between Carrefour and BNP Paribas Personal Finance.
What methodology has been used?
The main research input into this study is Finaccord’s on-going investigation of the involvement in financial services, in general, and payment cards and loyalty schemes, in particular, of 3,175 major retailing brands across 32 countries in Europe. In the specific context of this report, the aim of the investigation is to gather top level data concerning the development of co-branded, loyalty and private label card programs by the organisations in question, the operating models that they use and the card issuers with which they work in this context.
Naturally, given that there are literally millions of smaller retailers in total in the territories reviewed, the majority with just a single outlet, Finaccord has sought to focus on the very largest entities that are likely to be of most strategic interest to organisations involved in the payment card and loyalty scheme sectors and wider financial services markets. Indeed, the 3,175 major retailers break down by category and by country as illustrated in the graphic overleaf.
What is the report structure?
0. Executive Summary: providing a concise evaluation of the principal findings of the report.
1. Introduction: offering rationale, description of methodology and other related notes.
2. European Overview: comprising a pan-European overview of the activity of major retail brands in co-branded and private label payment cards, proprietary loyalty programs and coalition loyalty schemes. In addition to a comparative analysis of operating models used by retailers in the area of payment cards, this section also analyses the extent to which retailer cards are affiliated to American Express, Diners Club, MasterCard, Visa and other international payment brands in each country and provides a comprehensive listing of retailers operating through captive or joint venture card issuing arms. Consumer research data illustrating the importance of retailers as distributors of credit and pre-paid cards in Germany and the UK is also included in this section.
3. Austria: an in-depth analysis of the market for retailer co-branded, loyalty and private label cards in Austria. Key partnerships between major Austrian retail chains and card issuers are identified and commented upon for both co-branded and private label cards while detailed commentary is also provided for both proprietary retailer loyalty programs and coalition loyalty schemes.
What are the key features of the research?
Key features of this report include:
- definitive coverage of the involvement in co-branded, loyalty and private label card schemes of 3,175 major retail brands in 32 countries across Europe;
- focus on over 800 schemes for retailer credit, deferred debit, debit and pre-paid cards: which card issuers and networks are strong in which countries and with which retailers do they collaborate?
- comprehensive p listing of retailers using captive or joint venture card issuing divisions or subsidiaries for their co-branded or store card schemes;
- identification of over 1,000 proprietary retailer loyalty programs including the split by country according to whether they run in parallel to a payment card or remain unaccompanied by such a card;
- identification of over 50 coalition loyalty schemes with which major retail chains have affiliated including AIRMILES, Bonus Card, Deutschland Card, Maximiles, Multipont, Nectar, PAYBACK, Pika, Plussakortti, Supercard, Trumf and Webmiles.
How can the research be used?
You may be able to use this report and the PartnerBASE™ that accompanies it in one or more of the following ways:
- gain rapid access to a unique pan-European source of intelligence covering virtually all significant retail brands across an extremely wide range of geographies;
- monitor the activity of key national and international competitors in the retailer payment card sector including the many European subsidiaries of Barclays, BNP Paribas, Citibank, Crédit Agricole, Deutsche Bank, GE Capital, HSBC, IKANO, Santander and Société Générale;
- evaluate the potential for acquiring the existing cardholder portfolios of retail groups by purchasing equity stakes in captive card issuing entities;
- understand the potential in each country for converting existing proprietary retailer loyalty cards into fully-fledged payment cards;
- learn more about the growing number of coalition loyalty programs across Europe including the payment cards that have been launched as a result of their popularity.
Who can use the research?
1. Payment card companies: this study is an up-to-date and comprehensive source of information about co-branded and private label / store cards in 32 countries and represents an indispensable guide to over 800 retail brands that operate payment card programs;
2. Banks and insurance companies: retailer payment card p p y schemes can form an effective basis either for developing broader retailer banking and consumer finance operations or for marketing a range of insurance products to large and well-defined groups of consumers;
3. Retailers: co-branded and private label / store card programs represent an important activity for numerous retail brands in Europe but what types of card do they offer and with which partner organisations do they collaborate in this field?
4. Loyalty management companies: the research offers a thorough guide to over 1,100 proprietary retailer loyalty schemes and over 50 coalition loyalty programs in Europe;
5. Management consultancies: are you either assisting a retailer with the development of its payment card scheme or advising a card issuer with respect to partnership opportunities with major retail brands? This research will help you to evaluate the options in retailer co-branded, loyalty and private label programs, saving time and effort on researching the subject yourself.
** To view the reports full table of contents, please see the sample provided **
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