How Will Changing Retail Landscape Impact Credit Card Partnerships, Loyalty Marketers?

David Boone, Executive Vice President and Head of U.S. Partnerships and Shared Services at TD Bank, believes that the changing retail landscape could impact the credit card partnership industry and, in turn, loyalty marketers.

Loyalty360 caught up with Boone to learn more about this compelling theme.

How will the changing retail landscape impact the credit card partnership industry and what could that mean for loyalty marketers?

Boone: Retail, by its very nature, has always been a fast changing industry, constantly needing to adapt to new trends, consumer tastes, and purchase preferences. “Non-store” retailing, new entrants, and the mobile revolution are playing a larger role driving change in the retail industry. For card program and loyalty providers, the message is simple: We need to anticipate and adapt to serve our retail partners in a more holistic fashion. Creating online and mobile experiences that win with customers, leveraging the tremendous amount of Big Data available to help enhance these experiences, helping retailers deliver a true omnichannel experience, while not forgetting that the vast majority of today’s retail sales still happen in-store. Banks and loyalty program providers are also going to have to think about how that provides business model flexibility for their retail partners as they move into this new space.

What are banks and merchants doing well now with their credit card programs and where do the challenges lie?

Boone: In today’s environment, we believe that most programs are generally doing well. This is less because the consumer is driving more purchases onto card programs, but rather a result of the better financial performance of credit card programs. We continue to believe that most retailers do not truly leverage or fully integrate their card programs into their retail shopping experience as well as possible – creating a truly seamless shopping experience in which the card program enhances the overall retail experience, which remains a key area of opportunity. Another challenge is the speed with which banks, loyalty providers, and retailers can adapt to this new environment. 

How would you describe the current state of Big Data connected to banks and retailers, and what can they do better that will impact the customer experience?

Boone: I think that we are in the very early innings of leveraging the full set of data available, both in and outside of these programs. Our observation is that most organizations are focused on leveraging information to make their marketing more effective and more personalized. This is not without merit as we are commercial enterprises trying to win new customers and grow our business with existing customers. However, we do not see many examples where data is used to transform the customer experience. Some of this has to do with the difficulty of delivering a differentiated experience for each individual customer in a retail environment and much of has to do with the more nascent capabilities across the retail sector compared with some other sectors in the economy.

How can banks and retailers work together in a more efficient way that will enhance customer value and brand loyalty?

Boone: Banks and retailers need to make it a priority to maximize the value of their programs. In many cases, banks take the “asset class” view. They’re lending the retailer’s customers’ money and making a return on these investments. Equally so, many retail partners take a purely financial and non-strategic view of their programs -- simply a revenue stream from cross-selling a product or program to their customers. Maximizing the value of the programs means achieving both of the financial goals, but in a way that better integrates the program into the retailer’s overall customer experience.

Are banks or retailers having a tougher time creating seamless customer experiences that spark brand loyalty?

Boone: I wouldn’t say that they are having a “tougher” time creating loyalty, but rather an opportunity exists to do more together for the benefit of the consumer and their core businesses.

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