Retailers spend a considerable portion of their budgets attracting and retaining customers. A retailer-branded credit card program is a critical growth strategy that can significantly increase customer loyalty, satisfaction, traffic and sales for a retailer, according to recent analyses sponsored by GE Capital’s Retail Finance business, the consumer lending unit of General Electric Company (NYSE:GE).
The GE Capital Retail Finance Retailer-branded Credit Program Study was conducted over a two-year period and encompassed internal and external data from five major retail chains of various sizes across three main segments, including specialty, big box and online. The analysis examined share of wallet and the shopping habits of thousands of consumers nationwide, using a retailer-branded credit card, as well as those customers using other payment methods, through data analysis and case studies.
“The study confirms that retailer-branded credit programs favorably influence share of wallet, as well as sales, loyalty, attrition, and satisfaction,” said Toni White, chief marketing officer of GE Capital’s Retail Finance business. “Retailers that understand their customers, better engage and retain them. This information provides a clearer picture of the value of credit and the impact of retailer-branded credit programs on growing incremental sales and building long-term customer loyalty.”
Among the findings, retail credit customers:
• Make more frequent store visits, increasing from 1.4 per month to 1.7 per month for nearly four extra trips per year. The higher traffic continues through normal retail and seasonal cycles, and translates into a 29% overall boost in store visits.
• Increase incremental retail sales between 39-86% than customers who pay with other methods.
• Result in greater lifetime value, as retail credit cardholders stay more engaged, and are 72% less likely to attrite or leave the retailer. After the larger initial purchase, customer transactions may return to the average ticket amounts observed before the acquisition of a store card (i.e., approximately $55 basket size, on average); however, increased foot traffic and sustained card usage drive retail sales, as store cards may provide compelling value propositions in the form of exclusive cardholder benefits and discounts and point programs.
• Save the retailer about 2% to 4% in interchange fees on every transaction processed on their store cards, contributing to greater profitability.
• Provide 100% traceable sales and a mechanism for retailers to capture information on high-ticket and special purchases and generate repeat store visits through enhanced, value-added card benefits.
“These insights can help retailers of any size build better businesses and strong credit programs, as well as more effectively direct their marketing efforts and budgets,” adds White. “Retailers can use data from branded payment options to build a unique customer experience across all channels and touchpoints, and better tailor loyalty offers that attract new shoppers and increase customer retention.”
For 80 years, GE Capital’s Retail Finance business has provided billions of dollars in consumer financing through major retailers and more than 200,000 small- and mid-sized businesses across the United States. GE Capital is a leading provider of consumer credit and helps clients build their business through proprietary online technology; service, marketing and sales tools; training resources; and retail and financing insights to better understand consumers and the market environment.
About GE Capital’s Retail Finance business
GE Capital’s Retail Finance business is among the country’s most successful retail lenders, with 80 years of experience in consumer financing. The business, with its lending entity GE Capital Retail Bank, provides customized credit programs to retailers and consumers in the United States and Canada that help drive sales. This includes private label and bankcard credit programs to major national, regional and independent retailers in the U.S., as well as private label credit programs, promotional and installment lending, bankcards and financial services for consumers through dealers; contractors; manufacturers; healthcare practices; and service providers across nearly 20 industries. More information can be found at gogecapital.com/.
GE Capital (gecapital.com) is one of the world’s largest providers of credit. For over one million businesses, large and small, GE Capital provides financing to purchase, lease and distribute equipment, as well as capital for real estate and corporate acquisitions, refinancings and restructurings. For our 100+ million consumer customers, GE Capital offers credit cards, sales finance programs, home, car and personal loans and credit insurance.
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