How do you get people to use store credit cards more? Personalized rewards and split pay services, says Synchrony CEO

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The retail loyalty landscape is changing, but a senior in-store credit card executive sees an opportunity, not a threat, in the new ways merchants are trying to build relationships with customers.

As stores expand their loyalty efforts beyond cards, Synchrony Financial SYF,
-2.61%
Managing Director Brian Doubles said his company was also changing its approach. A few years ago, store cards focused heavily on the big upfront discounts when cardholders first opened their accounts, but now the company is working on creating personalized rewards programs to encourage more usage. frequent of his cards.

“It’s not just the first buy discount,” Doubles told MarketWatch. Now Synchrony is focusing on “lifetime relationships” which can make people “cash out the card every time they make purchases,” including through Amazon.com cash back and savings programs. Inc. AMZN,
+ 0.94%
and Lowe’s Cos. LOW,
-1.57%
store cards managed by Synchrony.

The company also works with PYPL of PayPal’s Holdings Inc.,
-0.70%
Venmo on its new credit card, which automatically adjusts major reward categories based on where cardholders spend the most. The arrangement represents a further expansion into more digital channels, according to Edward Jones analyst Kyle Sanders.

See also: PayPal Takes on Square with US Card Reader Launch

Subsidiary of General Electric Co. GE,
-0.85%
in 2015, Synchrony is a leading private label credit card provider, and it earns money from interest and fees on its card wallet, including those it manages with Gap Stores Inc., GPS,
-1.56%
Dick’s Sporting Goods DKS,
-0.39%,
and Walmart’s Sam’s Club WMT,
-0.09%.
Synchrony has also added new health and pet care partnerships as it seeks to provide financing options for medical expenses that are not covered by insurance.


“Go back three or four years and you wouldn’t even think about financing before making a buying decision. Today’s task with data is to anticipate “what the customer wants before he even wants it”.


– Brian Doubles, CEO, Synchrony Financial

The company generated $ 3.4 billion in net interest income in the last quarter and had more than 16,500 full-time employees at the end of 2020. Synchrony renewed more than 40 key relationships and closed 25 new agreements in 2020.

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Stores have turned to means other than customer loyalty cards, including through membership programs like the one that Walgreens Boots Alliance Inc. WBA,
-1.62%,
a Synchrony card partner, works for buyers. Walgreens’ free membership program offers its own opportunities for buyers to earn rewards, but Doubles is betting that Synchrony can take advantage of these programs to find potential new cardholders.

Synchrony’s relationships with many of its partners allow it to tap into loyalty programs “to take advantage of very rich data about these loyalty members”, including how often they shop and whether they use the system. ‘mobile application, said Doubles. This may allow Synchrony to provide personalized offers for the corresponding store cards and better determine the appropriate credit line sizes, he continued.

“I see it as a pretty big opportunity, not a competing platform,” Doubles said.

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He is also optimistic that Synchrony can stay ahead of other emerging trends in the credit landscape. Younger shoppers have been the driving force behind the rapid growth of installment payment offerings like those from Klarna and Afterpay which allow them to split purchases into chunks and pay for items over time, often without interest. Synchrony offers its own remittance service, called SetPay, which had $ 15.1 billion in consumer balances at the end of last year.

While Synchrony offers installment payment options for interested merchants, Doubles expects more traditional forms of credit to continue to play a role in many purchases.

Doubles took over as CEO in April after more than two decades with Synchrony and GE, including as CFO during the period of Synchrony’s initial public offering. Since Doubles held the most senior position, the company has reorganized into five distinct verticals, from home to automotive to lifestyle with the idea that different categories of purchasing require different types of funding.

According to Doubles, large furniture purchases may be better suited to fixed-term installment loans, while purchases of consumer goods may lend themselves to traditional cards.

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And while digitally-focused merchants may look to add installment payment options, physical department store operators may try to streamline the in-person process for applying for point-of-sale credit through online applications and prequalifications. Doubles said consumers are interested in seeing fundraising information early in their shopping journey and that Synchrony uses its own data, partner data, and information on things like utilities, phones. laptops and rent payments to help partners deliver smarter, more personalized deals.

“Go back three or four years and you wouldn’t even think about financing before making a buying decision,” he said. Today’s task with data is to anticipate “what the customer wants before he even wants it”.


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