NEW YORK, June 2, 2016 (GLOBE NEWSWIRE) — As shifts in consumer preferences mete out consequences for retail stores, one segment is investing heavily in brick-and-mortar locations to generate new sales: co-brand programs.
Retailers that offer co-brand and private-label credit cards are ramping up direct marketing efforts through the physical point of sale and investing in technology, employee incentives, and other initiatives to modernize that channel and maximize its growth potential. According to a survey conducted by ACG, 57 percent of brand partners with physical, online, and mobile commerce footprints are forecasting in-store account acquisitions growth through end of year and planning to increase investments in the near term.
“Retailers are doubling down on store-centric strategies as a tool for increasing cardholder acquisitions,” said Diana Middleton, Director of ACG’s Brand Partner Roundtable, an information-sharing group for senior retail payment executives. “Brand partners are well aware that customers are changing the way they shop, and deploying tactical investments to boost what has historically been the best-performing channel.”
In fact, retail stores remain a leading outlet for card sales: physical locations generated 71 percent of account acquisitions in 2015, according to ACG’s Brand Partner Roundtable Benchmark Study, and tend to have higher applicant approval rates.
Planned investments reflect a bullish outlook on stores as part of larger cardholder acquisition strategies, despite slipping comparable sales and declining foot traffic. While retailers begin trimming their physical expansion plans and closing under-performing stores, and as consumers increasingly migrate to online and mobile environments, physical locations are expected to remain a key driver of account openings. Many brand partners still view store associates as the most effective means for communicating the value proposition associated with card products and delivering relevant information and offers to customers.
Still, retailers are adapting their techniques to reflect a growing digital audience and the reality of declining brick-and-mortar store visits. Increasingly, investments are designed to promote greater integration with omni-channel strategies for branded card programs.
“Brand partners are taking proactive steps to maximize the potential of this existing and very formidable channel,” Middleton said. “Program managers are identifying better and more personalized ways to serve customers, preserve face-to-face relationships, and bring the point of sale into the digital era.”
These methods include equipping stores with more sophisticated technology, identifying migration patterns between physical and digital customer touch points, and analyzing how shifting behavior affects customers’ lifecycle value. A key part of this strategy is identifying highly-active omni-channel shoppers in-store and delivering pre-approved offers at the point of sale.
New technologies, including tablets and other mobile devices as an acquisitions tool and more sophisticated customer relationship management (CRM) systems, could open an avenue for instant pre-approval, reduce application times, and eliminate friction.
A more fundamental long-term challenge will be sustaining leads in the absence of store footprint expansion, which has traditionally generated large sums of new customers and accounts. With fewer new store openings, brand partners will need to identify new potential cardholders within their physical footprint, as well as maximize the performance of digital channels.
“Today, brand partners have to be more strategic in how they target customers in their existing stores,” Middleton said. “Identifying that white space – customers that don’t have the card product – is critical.”
As efforts to optimize the in-store acquisitions channel continue, brand partners are also turning attention to online and mobile in particular. Program managers are investing equally in stores and more cost-efficient digital channels with a high perceived return on investment – especially as cost-per-acquisition in stores is expected to increase over time. However, challenges abound – from maintaining clarity of message and cutting through competing offers to improving opt-in rates and online targeting.
About the Brand Partner Roundtable
Open exclusively to retailers, the Brand Partner Roundtable focuses on designing and executing card programs that benefit members’ core retail business. Discussions give participants the tools and information they need to improve their program’s value proposition and acquisition strategy, eliminate fraud, and fine-tune mobile and digital enhancements. For information on membership, contact diana.middleton@acg.net.
About Auriemma Consulting Group
About Auriemma Consulting Group
ACG is a boutique management consulting firm with specialized focus on the Payments and Lending space. We deliver actionable solutions and insights that add value to our clients’ business activities across a broad set of industry topics and disciplines. Founded in 1984, ACG has grown from a one-man shop to a nearly 50-person firm with offices in New York and London. For more information about ACG’s Industry Roundtables, please contact Tom LaMagna at 212-323-7000 or tom.lamagna@acg.net.
CONTACT: Tom LaMagna
212-323- 7000
tom.lamagna@acg.net
Source: Retail