The retail industry has shifted quickly to mobile, bringing the private label credit card market right along with it, according to market research firm Packaged Facts in the new report Private Label Credit Cards in the U.S., 10th Edition.
The fact is for more and more app users, the physical card that for so long embodied the face of this industry no longer exists. In its place stands the retailer app, capable of meeting shopping management, rewards, and general browsing needs, much like a physical location once did. Payments are increasingly part of the background, buried beneath rewards discounts and other promotional tools that may save customers money on a specific purchase but are also intended to reward increased spending and purchase frequency.
Encouraging online and in-store engagement with apps
In addition, the app has become a private label credit card usage driver and retailer engagement engine. The app can function as an engagement driver among cardholders and non-cardholders alike, and can also help in the process of converting non-cardholders to cardholders.
"Today, retailer apps increasingly champion online engagement while promoting – and even rewarding – in-store engagement," says David Sprinkle, research director, Packaged Facts. "It's a potent mixture of mobile app technology, customer relationship management data analytics advances, geolocational marketing initiatives, and closed loop virtual card payments that is creating a retailer app landscape that increasingly delivers on simplicity, holistic engagement, and even fun in the pursuit of loyalty and increased sales."
Apps important for younger users
Packaged Facts' proprietary national consumer survey data reveal that retailer-specific mobile apps have been downloaded by a majority (53 percent) of smartphone users, and 42 percent have used them in the past 30 days. Among private label credit card users, these rates are even higher – albeit slightly. Packaged Facts also found that almost half of active private label credit card users actively engage with retailer-specific apps.
In addition, age is a determining factor as Millennials between 18-34 years old are more than three times as likely as adults age 55 and over to have used a retailer-specific mobile app in the past 30 days. Among private label credit card users, the gap expands to 3.5 times. Further, some 71 percent of private label credit card users age 18-34 have used a retailer app in the past 30 days, a higher rate than among 18-34 smartphone users generally. This underscores the importance of these apps among younger card users.
The report Private Label Credit Cards in the U.S., 10th Edition, covers the U.S. market for private label credit cards, with an emphasis on retail credit card program features and benefits analysis, retail card strategies, growth trends and opportunity spotting.
