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Using private label credit cards as a loyalty tool

Using private label credit cards as a loyalty tool 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Consumer Marketing Emerald Publishing

Using private label credit cards as a loyalty tool

Journal of Consumer Marketing , Volume 23 (7): 5 – Dec 1, 2006

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0736-3761
DOI
10.1108/07363760610712885
Publisher site
See Article on Publisher Site

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.

Journal

Journal of Consumer MarketingEmerald Publishing

Published: Dec 1, 2006

Keywords: Marketing strategy; Customer loyalty; Loyalty schemes; Credit cards; Customer relations

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