Using private label credit cards as a loyalty tool
Abstract
Purpose
The purpose of this paper is to examine the effectiveness of retail private‐label credit cards in a crowded marketplace. It offers ideas, citing examples from successful retailers, for improving the effectiveness of credit cards as a loyalty tool.
Design/methodology/approach
The paper examines the strategy behind Gap Inc.'s private label credit card, which allows customers to earn rewards for shopping at Gap, Banana Republic and Old Navy stores. It also examines other retail card programs, including quotes from program leaders who share their ideas.
Findings
Statistics are cited which indicate how crowded the marketplace currently is for private label credit cards. By closely examining successful credit card programs, and by interviewing industry leaders, the importance of competitive differentiation in this marketplace is proved.
Practical implications
The reader will walk away with some specific ideas for improving the effectiveness of their private label credit card program. Armed with the knowledge of the scope and size of the private label credit card market, readers should gain insight that will improve their decision making about their own program.
Originality/value
The paper takes a look at how private label credit cards are currently used as loyalty marketing tools, and follows with suggestions on how to incorporate the strategies of some major retailers into existing programs.
Keywords
Citation
Ferguson, R. (2006), "Using private label credit cards as a loyalty tool", Journal of Consumer Marketing, Vol. 23 No. 7, pp. 374-378. https://doi.org/10.1108/07363760610712885
Publisher
:Emerald Group Publishing Limited
Copyright © 2006, Emerald Group Publishing Limited