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| Subject: Sears, Roebuck & Co., Target Corp., and Circuit City Stores Inc.Co branding | |
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Author: G.E.Capital have shares CAT under different company names. |
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Date Posted: 05:25:27 01/28/03 Tue Posted By Subject Post Time Post ID pourquoi5 (ID#: 224751) Banker-Target Visa Growth "Dramatic" 28/1/03 11:16:32 PM 5971869 « Previous Message Next Message » Well folks-this is the industry "bible " saying it-American Banker-but as far as dramatic goes this is only Act 1 Scene 1-and points to the value which Geoffo spoke of today.Some research recently pointed to the fact that if Target is successful there will be 65 million smart cards out there by 2006 in the good ole USA-protector of the free world-policemen of the universe.And also note the reference to the growth of coalitions which is the big sleeper here in my opinion because that is where all the action will come from and Catuity will be smack bang in the centre of the loyalty wagon wheel when(not if)it comes.Loyalty is the tie that binds these coalitions together. Keep on selling guys-love it!$3.45 today. Retail Card Industry Faces a New Landscape This Year American Banker Friday, January 24, 2003 By John C. Grund and Robert F. Lime Last year was a landmark one in the retail card market, as various changes set the wheels in motion for a new competitive environment. Here are some of the highlights: Cobranding gains traction. It was a breakthrough year for retail cobranding, particularly as it relates to card partnerships. After mediocre success in the mid-1990s, many retailers were reluctant to cobrand and chose private-label instead. But last year there were partnerships formed by the likes TJX Cos. Inc.'s T.J. Maxx division, BJ's Wholesale Club Inc., Amazon.com Inc., and quasi-retailers like Walt Disney Co. and Universal Studios Group. The recent activities of retailers with captive card banks such as Sears, Roebuck & Co., Target Corp., and Circuit City Stores Inc. are partially responsible for ushering in a new era of cobranding. Retailers shift issuing strategies. The two most prominent strategy shifts were clearly the private-label decisions of both Saks Inc. and Home Depot Inc. Saks, whose captive program has more than $1 billion of loans outstanding, selected Household International Inc. as its new credit program partner. The deal continued the slow the migration of in-house programs to third-party providers, it also was a significant boost to Household's retail partnership strategy, because it provided an entry into the department store sector and let Household distance itself from its roots as a pure-play consumer finance company. Of no less importance was Home Depot's decision to move its program, believed to have more than $4 billion of loans outstanding, from GE Capital Corp. to Citigroup Inc. The transition is targeted for mid-2003. New strategies bring new scrutiny. Last year the investment community woke up to the reality that certain retailers had built - or were building - a meaningful financial services operation. As a result, unprecedented levels of scrutiny was put on practices such as corporate disclosure and subprime lending. Sears' earnings miss, which was driven by poor credit quality, unleashed questions about the prudence of its Sears MasterCard strategy, and its stock price was punished. Target, after basking in praise for being the first retailer to introduce a smart card, has begun to draw more attention for the dramatic growth in its Target Visa program. Market repositioning. The entire retail card market is clearly in transition. The lines separating general-purpose and private-label issuers have blurred. With traditional account acquisition channels oversaturated, retail partnerships are on many strategic agendas, thereby intensifying competition. Issuers such as Capital One Financial Corp., MBNA Corp., Bank One Corp., and American Express Co. have encroached upon the retail turf once held solely by traditional private-label issuers. On that note, the private labels, already few in number, are undergoing much change. Household, pending its acquisition by a well-capitalized HSBC Holdings PLC, will soon be able to draw on the global resources of a new parent company. Citigroup, with the Home Depot program being integrated, is looking to maintain momentum and expand its stable of partnerships. GE Consumer Finance still has an enviable client roster, is likely to defend its market position, and will benefit from the streamlining of GE Capital. What's next? This year will be pivotal in validating many of the strategies that gained momentum in 2002. Cobranding will remain in the spotlight, with the not-so-distant memories of prior mishaps characterized by misaligned partners, overambitious goals, and unmet expectations. As issuers ramp up their retail partnering efforts, the jury is still out on the evolving cobranding strategies. The retail market is experiencing moderate growth, and there are few start-up opportunities. To achieve above-average growth, retailers must either turn their in-house programs into cobrand partnerships or try to steal share by converting programs managed by a competitor. The Saks and Home Depot decisions will be viewed as models as other retailers weigh their alternatives. Discipline and effective marketing will cull the winners from the losers. Issuers and retailers alike are all too eager to rush to market and sacrifice long-term sustainability for a near-term product launch. Issuers must discipline themselves to filter retail programs for potential size, stability, and profitability. Finally, all eyes will be on the marketing effectiveness of the new retail-based programs. Private-label programs still capture a significant share of retail purchase volume, and that is their primary purpose. In their zeal to land or launch the next program, issuers and retailers must not lose sight of the fundamental objectives. Time will tell if the major decisions of 2002 set the retail card market on a new growth trajectory or become yesterday's news. « Previous Message Next Message » This message has been viewed 9 times Report a BullBoards Violation Ignore pourquoi5 Post Reply View Threads [ Next Thread | Previous Thread | Next Message | Previous Message ] |
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| Re: Carlson Marketing(i.e. Radisson Hotels, www.goldpoints.com, etc.)CAT | interesting kiosk in the front of the storesGeneral Mills | 17:13:39 01/28/03 Tue |