Retaile Payment, Gift and Loyalty Cards in North and Latin America

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Retailer Payment, Gift and Loyalty Cards in North and Latin America is a report, based on a survey …

Retailer Payment, Gift and Loyalty Cards in North and Latin America is a report, based on a survey
of over 1,400 prominent retail brands in 12 countries, about the provision of co-branded and
private-label payment cards, gift cards and loyalty cards by major retailers across the Americas.
Retailer participation in coalition loyalty schemes is also considered.

Countries covered are Argentina, Brazil, Canada, Chile, Colombia Costa Rica, Ecuador, Mexico,
Paraguay, Peru, Uruguay and the USA.

In total, the research identifies close to 600 retailer payment cards, a similar number of closed-loop
gift cards, almost 400 proprietary retailer loyalty programs and coalition loyalty schemes, thereby
providing a definitive analysis of retailer co-branded, loyalty and private-label programs in North
and Latin America that goes far beyond the scope of previous published research.

Moreover, the PartnerBASE™ database that accompanies the report details each of the many
initiatives for retailer credit, deferred debit, debit and rechargeable pre-paid cards traced by
Finaccord, specifying the operating models used by retailers, the payment networks to which the
cards are affiliated and the identity of the ultimate card issuers in each case.

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  • 1. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 1 Retailer Payment, Gift and Loyalty Cards in North and Latin America Report prospectus March 2014
  • 2. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 2 Prospectus contents What is the research? What is the rationale? What methodology has been used? How do retailers surveyed break down? Which specific retailing groups have been researched What is the report structure? What are the key features of the research? How can the research be used? How can the PartnerBASE™ be used? Who can use the research? What are some of the key findings? What is the cost and format? What other reports are available? How can the research be purchased? 3 4-6 7 8-9 10 11 12 13 14 15 16-19 20 21 22 Page
  • 3. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 3 What is the research? Retailer Payment, Gift and Loyalty Cards in North and Latin America is a report, based on a survey of over 1,400 prominent retail brands in 12 countries, about the provision of co-branded and private-label payment cards, gift cards and loyalty cards by major retailers across the Americas. Retailer participation in coalition loyalty schemes is also considered. Countries covered are Argentina, Brazil, Canada, Chile, Colombia Costa Rica, Ecuador, Mexico, Paraguay, Peru, Uruguay and the USA. In total, the research identifies close to 600 retailer payment cards, a similar number of closed-loop gift cards, almost 400 proprietary retailer loyalty programs and coalition loyalty schemes, thereby providing a definitive analysis of retailer co-branded, loyalty and private-label programs in North and Latin America that goes far beyond the scope of previous published research. Moreover, the PartnerBASE™ database that accompanies the report details each of the many initiatives for retailer credit, deferred debit, debit and rechargeable pre-paid cards traced by Finaccord, specifying the operating models used by retailers, the payment networks to which the cards are affiliated and the identity of the ultimate card issuers in each case.
  • 4. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 4 What is the rationale? A number of factors, some of which are specific to co-branded and private-label or store cards and some to retailing, provide the rationale for the development of this report. With reference to co- branded and private-label or store cards, in particular, the following assertions can be made: - the credit, deferred debit and prepaid card markets of many countries are continuing to grow and retailers can take advantage of this through co-branded or store card programs; - the experience of card issuers is that the profitability of successful co-branded card schemes, including retailer programs, usually exceeds that of standard credit cards; - indeed, in terms of the outright number of schemes worldwide and, probably, as measured by the pure number of cards issued, retailing is the most important co-branding arena for card issuers; - once private-label store cards have built up a substantial customer base, these can be converted into general purpose, international payment cards; - the customer information gathered from co-branded or store cards can be used to cross-sell banking, insurance and other services.
  • 5. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 5 What is the rationale? (continued) In addition, proprietary and coalition loyalty schemes that amass a significant number of members can eventually be converted into cards with a payment function, thereby providing justification for their inclusion in this publication. Indeed, coalition loyalty programs can be particularly important in terms of the number of members that they accumulate and the number of active programs in the Americas is continuing to increase each year. These encompass a variety of initiatives including bank-owned schemes, online programs and propositions oriented primarily to travel rewards. Furthermore, dynamics in the retailing market itself also give rise to increasing rationale both for co- branded and private-label or store card programs and a comprehensive pan-American study on the subject. Key developments in the retailing sector include: - increasing usage of payment cards, generally, as a payment mechanism in preference to cash, cheques and other traditional alternatives, thereby encouraging retailers to develop their own cards in order to capture a share of the payments market; - retailer consolidation in both more and less developed markets which helps to produce national champions with the branding, muscle and general profile needed to succeed in the payment card sector in these countries;
  • 6. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 6 What is the rationale? (continued) - retailer growth in the less developed markets as an increasing proportion of consumers allocate their expenditure to formal retailing concepts as opposed to informal street markets and the like; - a mature environment for retailing in the more developed markets which signifies that retailers need to investigate new means of achieving revenue growth which can include financial services, in general, and co-branded or store cards, in particular; - increasing internationalisation which potentially paves the way for cross-border alliances between retailers and mainstream card issuers as epitomised, for example, by the link between Carrefour and BNP Paribas Personal Finance.
  • 7. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 7 What methodology has been used? The main research input into this study is Finaccord’s on-going investigation of the involvement in financial services, in general, and payment cards and loyalty schemes, in particular, of over 1,400 major retailing brands across 12 countries in North and Latin America. In the specific context of this report, the aim of the investigation is to gather top level data concerning the development of co-branded, loyalty and private-label card programs by the organisations in question, the operating models that they use and the card issuers with which they work in this context. Naturally, given that there are literally millions of smaller retailers in total in the territories reviewed, the majority with just a single outlet, Finaccord has sought to focus on the very largest entities that are likely to be of most strategic interest to organisations involved in the payment card and loyalty scheme sectors and wider financial services markets. Indeed, the major retailers break down by category and by country as illustrated in the graphics overleaf.
  • 8. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 8 How do retailers surveyed break down? (1) Fashion, 218 BY TYPE BY DISTRIBUTION MODEL Supermarket / hypermarket, 288 Consumer electronics, 236 DIY / furniture / home, 133 Health and beauty, 85 Speciality, 107 Fuel, 79 Department store / variety, 148 Sporting goods, 74 Books and media, 45 Offline only, 631 Online only, 156 Mixed, 626
  • 9. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 9 How do retailers surveyed break down? (2) BY COUNTRY US,501 Canada,212Brazil,211 Argentina,98 Mexico,83 Chile,69 Colombia,54 Peru,47 Ecuador,46 Costa Rica, 34 Paraguay,30 Uruguay,28
  • 10. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 10 Which specific retailing groups have been researched? Among the major retailing groups included in the research are: Abercrombie & Fitch Aeon Ahold Aldo Alpargatas Amazon American Apparel AmerisourceBergen Ann Taylor Associated Wholesale Grocers Berkshire-Hathaway Retail Best Buy Canadian Tire Caro Cuore Carrefour Casa & Ideas Casino Group Cencosud Charming Shoppes Chedraui Chico's Controladora Comercial Mexicana Corporación El Rosado Corporación La Favorita Costco D'Avó Din Empresas Ripley Expert International Extreme Retail Exxon Mobil Falabella Famsa Furniture Row Companies Gessa Grupo Carso Grupo Deib Otoch Grupo Elektra Grupo Exito Grupo Gigante Grupo Inditex Grupo Pão de Açúcar Grupo Vierci Home Depot Home Hardware Houchens Industries Hudson's Bay Company IAC IFH Peru IKEA Katz Group Kering Kroger L'Oreal Luxottica Group Macy’s Mango McKesson Pharamceuticals Men's Wearhouse Metro Mimo & Co Office Depot Olímpica Overwaitea Petrobras PetSmart Pintuco Raley's Reitmans Repsol Safeway Salcobrand Savemart Sears Seven & I Shell Shoppers Drugmart SHV Makro Soriana Staples Sun Capital Partners SuperValu Tengelmann The North West Company TJX Transworld Entertainment Walmart Weston Whole Food Markets Williams-Sonoma
  • 11. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 11 What is the report structure? 0. Executive Summary: providing a concise evaluation of the principal findings of the report. 1. Introduction: offering rationale, description of methodology and other related notes. 2. Regional Overview: a pan-American overview of the activity of major retail brands in co-branded and private-label payment cards, gift cards, proprietary loyalty programs and coalition loyalty schemes. As well as a comparative analysis of operating models used in the area of payment cards, this section also analyses the extent to which retailer cards are affiliated to American Express, Diners Club, MasterCard, Visa and other international payment brands in each country. 3. Argentina: an in-depth analysis of the market for retailer payment, gift and loyalty cards in Austria. Key partnerships between major Argentine retail chains and card issuers are identified and commented upon for both co-branded and private-label cards while detailed commentary is also provided for both proprietary retailer loyalty programs and coalition loyalty schemes. 4 - 14: chapters for all other countries are structured along similar lines to that for Argentina. 36. Appendix: this final section provides a comprehensive listing of retailers operating through captive or joint venture card issuers with xx such entities identified in total.
  • 12. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 12 What are the key features of the research? Key features of this report include: • definitive coverage of the involvement in co-branded, loyalty and private-label card schemes of over 1,400 major retail brands in 12 countries across North and Latin America; • focus on close to 600 schemes for retailer credit, deferred debit, debit and prepaid cards: which card issuers and networks are strong in which countries and with which retailers do they collaborate? • comprehensive listing of retailers using captive or joint venture card issuing divisions or subsidiaries for their co-branded or store card schemes; • identification of almost 400 proprietary retailer loyalty programs including the split by country according to whether they run in parallel to a payment card or remain unaccompanied by such a card; • identification of important coalition loyalty schemes with which major retail chains have affiliated including Aeroplan, CMR Puntos, dotz, Multiplus Fidelidade, Ripley Puntos, Súper Puntos, Supermaxi and Upromise. •.
  • 13. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 13 How can the research be used? You may be able to use this report and the PartnerBASE™ that accompanies it in one or more of the following ways: • gain rapid access to a unique pan-American source of intelligence covering virtually all significant retail brands across an extremely wide range of geographies; • monitor the activity of key national and international competitors in the retailer payment card sector including the many subsidiaries in the Americas of BBVA, BNP Paribas, Citibank, Falabella, Itaú Unibanco, Santander, Scotiabank and Walmart; • evaluate the potential for acquiring the existing cardholder portfolios of retail groups by purchasing equity stakes in captive card issuing entities or taking over internally-managed schemes; • understand the potential in each country for converting existing proprietary retailer loyalty cards into fully-fledged payment cards; • learn more about the growing number of coalition loyalty programs across North and Latin America including the payment cards that have been launched as a result of their popularity.
  • 14. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 Retailer Type Country Product type Product Operating model Partner(s) Network offered? Plaza Vea Supermarket / hypermarket Peru Credit card Yes Captive partner Interbank IFH Peru Plaza Vea Supermarket / hypermarket Peru Debit card No Plaza Vea Supermarket / hypermarket Peru Prepaid card Yes Captive partner Interbank IFH Peru Primax Fuel Peru Credit card Yes External partner Banco de Crédito BCP Credicorp Primax Fuel Peru Debit card No Primax Fuel Peru Prepaid card No 14 How can the PartnerBASE™ be used? Filter by type of retailer Choose operating model Identify card issuers Look up specific retailers Filter by type of card Select country Identify card networks
  • 15. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 15 Who can use the research? 1. Payment card companies: this study is an up-to-date and comprehensive source of information about co-branded and private-label / store cards in 12 countries and represents an indispensable guide to close to 600 retail brands that operate payment card programs; 2. Banks and insurance companies: retailer payment card schemes can form an effective basis either for developing broader retailer banking and consumer finance operations or for marketing a range of insurance products to large and well-defined groups of consumers; 3. Retailers: payment, gift and loyalty card programs represent an important activity for numerous retail brands in North and Latin America but what types of card do they offer and with which partner organisations do they collaborate for co-branded and private-label / store cards? 4. Loyalty management companies: the research offers a thorough guide to almost 400 proprietary retailer loyalty schemes and coalition loyalty programs in North and Latin America; 5. Management consultancies: are you either assisting a retailer with the development of a payment card scheme or advising a card issuer with respect to partnership opportunities with major retail brands? This research will help you to evaluate the options in retailer co-branded, loyalty and private- label programs, saving time and effort on researching the subject yourself.
  • 16. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 16 What are some of the key findings? 1. The operating models used for retailer payment cards vary from country to country in North and Latin America Source: Finaccord PartnerBASE 0% 20% 40% 60% 80% 100% Argentina Brazil Canada Chile Colombia Costa Rica Ecuador Mexico Paraguay Peru Uruguay USA Total % split of operating models used for retailer payment cards Other JV partner Captive partner Multiple external partners External partner Internal
  • 17. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 17 What are some of the key findings? (cont.) 2. Whether viewed in unweighted or weighted terms, with the latter taking into account the size of the retailers, private-label retailer card schemes occur most frequently within the total UNWEIGHTED SHARE OF PARTNERSHIPS WEIGHTED SHARE OF PARTNERSHIPS Source: Finaccord PartnerBASE Private, 39.9% Visa, 26.6% MasterCard, 25.2% CMR, 1.1% other, 3.9% Private, 48.7% Visa, 23.7% MasterCard, 21.4% American Express, 3.7% CMR, 0.7% Cencosud, 0.5% other, 1.3%Cencosud, 1.3% American Express, 1.3%
  • 18. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 18 What are some of the key findings? (cont.) 3. A majority of major retail brands in the US provide or are involved in a loyalty program with rates of activity highest among department store and variety retailers % provision rate by category of retailer 0% 20% 40% 60% 80% 100% Books and media Consumer electronics Department store / variety DIY / furniture / home Fashion Fuel Health and beauty Speciality Sporting goods Supermarket / hypermarket Online only Offline only Mixed Source: Finaccord PartnerBASE 75.0% 29.8% 82.8% 45.8% 76.1% 80.8% 75.9% 67.2% 76.7% 75.8% 64.3% 63.8% 70.5%
  • 19. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 19 What are some of the key findings? (cont.) 4. Key findings from the executive summary include: • with respect to the penetration of co-branded and private-label / store cards by category of retailer, Finaccord’s research shows that across North and Latin America as a whole, cards achieve the highest penetration among fuel retailers (69.6%), department store / variety retailers (58.8%) and supermarket / hypermarket chains (52.8%); • 23.9% of the retailers with co-branded or private-label credit card schemes promote cards that are linked to more than one network - this can occur either by means of the fact that they offer two separate cards or, in a few cases, because a single card carries more than one marque; • Alliance Data (via Comenity Bank) and GE Capital are the largest competitors in the pan- American market for retailer payment cards when measured by their number of exclusive card- issuing relationships, albeit the vast majority of these are concentrated in the US; • as far as coalition loyalty programs are concerned, the survey ascertains that across the 12 countries investigated in North and Latin America, 341 major retailers were found to take part in such schemes, equivalent to a penetration rate of 24.1%.
  • 20. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 20 What is the cost and format? Retailer Payment, Gift and Loyalty Cards in North and Latin America is available as a standard PDF document. The PartnerBASE™ that accompanies it at no further charge is in format. Costs for this research set and selected other comparable, international titles are as follows: * For UK-based clients, VAT at the prevailing rate will be added to the basic price. Costs quoted are for a single site user licence only. For a corporate user licence, please see the final slide for further details. Invoices can be paid in EUR or USD, at the prevailing exchange rate, if preferred. For acquisition of multiple reports, please contact Finaccord - discounts may be available. Retailer Payment, Gift and Loyalty Cards in North and Latin America GBP 1,295 Global Retailer Consumer Finance and Banking GBP 2,495 Global Retailer Insurance and Assistance GBP 2,495 Global Retailer Online Payment Acceptance GBP 3,495 Global Retailer Payment, Gift and Loyalty Cards GBP 3,495 Retailer Consumer Finance and Banking in the Asia-Pacific Region GBP 995 Retailer Consumer Finance and Banking in Europe GBP 1,295 Retailer Consumer Finance and Banking in North and Latin America GBP 995 Retailer Insurance and Assistance in the Asia-Pacific Region GBP 995 Retailer Insurance and Assistance in Europe GBP 1,295 Retailer Insurance and Assistance in North and Latin America GBP 995 Retailer Online Payment Acceptance in the Asia-Pacific Region GBP 1,295 Retailer Online Payment Acceptance in Europe GBP 1,995 Retailer Online Payment Acceptance in North and Latin America GBP 1,295 Retailer Payment, Gift and Loyalty Cards in the Asia-Pacific Region GBP 1,295 Retailer Payment, Gift and Loyalty Cards in Europe GBP 1,995
  • 21. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 21 What other reports are available? Australia GBP 795 France GBP 795 Malaysia GBP 795 South Korea GBP 795 Brazil GBP 795 Germany GBP 795 Mexico GBP 795 Spain GBP 795 Canada GBP 795 India GBP 795 Poland GBP 795 Turkey GBP 795 Chile GBP 795 Italy GBP 795 Russia GBP 795 UK GBP 795 China GBP 795 Japan GBP 795 South Africa GBP 795 USA GBP 795 Retailer Payments, Banking, Insurance and Assistance in... A variety of country-specific reports and associated PartnerBASE™ datasets about retailer payments, banking, insurance and assistance are also available from Finaccord, as listed below. These are based in part upon the same research programs as the multi-country titles but focus instead on particular countries. * The same notes apply here as on the previous page
  • 22. Expertise in financial services Web: www.finaccord.com. E-mail: info@finaccord.com Retailer Payment, Gift and Loyalty Cards in North and Latin America © Finaccord Ltd., 2014 22 How can the research be purchased? Simple. Just go to the relevant area of the Finaccord web site available at www.finaccord.com/order_global_rfsr.htm and fill in the online order form, clearly indicating: • report required • type of corporate user licence, if required * • billing name • address and e-mail address • purchase order number, if applicable Please allow up to one working day for the delivery of electronic copy by e-mail. * For the corporate user licence please choose one of the following options: 1. One office, one country: no supplement over and above basic cost of reports ordered 2. Multiple offices, one country: additional 20% over and above basic cost of reports ordered 3. Multiple offices, two to ten countries: additional 50% over and above basic cost of reports ordered 4. Global (unlimited offices in unlimited countries): additional 100% over and above basic cost of reports ordered VAT at the prevailing rate will be added to the price of any corporate user licence acquired by UK-based buyers.