Examining the Application of Private Label and Co-Branded Credit Cards in Retail Management: Strategies for Successful Execution
In the world of specialty retail, the transition to co-branded credit cards can be a complex endeavour, involving intricate coordination of technology, partnerships, and customer experience. A recent example of a successful implementation is the collaboration between a national fashion retailer and Clarkston Consulting, a leading industry player.
The project, spanning over a year, faced various challenges, but Clarkston kept it on track throughout the entire engagement. The retailer aimed to improve customer support and extend the card's usability beyond its stores, and Clarkston was instrumental in achieving this goal.
The project began with a clear definition of objectives and stakeholders. Key stakeholders, including specialty retail management, financial institutions, IT teams, marketing, and compliance/legal departments, were engaged to ensure a comprehensive understanding of the business goals. These goals included increasing customer loyalty, improving payment processing efficiency, and unlocking exclusive rewards through co-branding.
A comprehensive program plan was then developed, outlining all phases from requirements gathering to post-launch support. This included timelines, milestones, resource allocation, and risk management, as well as plans for customer education and marketing efforts tied to the new co-branded card offering.
Clarkston played a pivotal role in coordinating with payment networks and issuers. Aligning with payment network standards and working closely with the issuing bank ensured compliant integration and seamless transaction authorization and settlement. The technical integration of card processing platforms with the retailer’s point-of-sale (POS) systems and ecommerce infrastructure was overseen by Clarkston, ensuring the inclusion of features like installment billing options or automatic billing updaters.
Optimizing rewards and loyalty alignment was another key focus. Clarkston worked with partners to design rewards that leveraged the co-brand’s value, such as exclusive redemption options or status benefits that drive card adoption and usage. Mechanisms that kept points active and encouraged ongoing card usage were also considered, enhancing customer retention.
End-to-end testing across all transaction types was conducted to ensure smooth authorization and settlement. Clarkston validated integration with loyalty and rewards systems and addressed fraud mitigation and authentication requirements as per regional compliance.
The launch management was coordinated by Clarkston, who ensured a smooth rollout in stores and online. Retail staff and customer service teams were provided with training, and marketing campaigns emphasising co-brand benefits and features were implemented.
Post-launch monitoring and continuous improvement were crucial for the program's success. Clarkston used transaction and usage data to track program performance, worked with merchant services providers to optimise interchange fees and payment acceptance economics, and gathered customer feedback to adjust rewards or technical features to enhance user experience.
Compliance and risk management were also prioritized. Clarkston ensured all transaction processing complied with applicable regulations and payment network rules, and monitored for fraud or security risks, adapting program controls accordingly.
Clarkston led executive steering committees for the project and developed strategic materials for the co-branded credit card program. Their role included designing the program, gathering requirements, overseeing development and quality assurance (QA), and ensuring a smooth product launch. They also facilitated vendor collaboration during the project.
A case study detailing the project is available for download, focusing on Project and Program Management and Specialty Retail services. For more information about Clarkston’s services, contact details are provided.
[1] https://www.clarkstonconsulting.com/resource-library/white-papers/payment-processing-strategies-for-specialty-retail [2] https://www.clarkstonconsulting.com/resource-library/white-papers/rewards-program-optimization-for-specialty-retail [4] https://www.clarkstonconsulting.com/resource-library/white-papers/merchant-services-optimization-for-specialty-retail
- To achieve their aim of improving customer support and expanding the card's usability, the retailer partnered with Clarkston Consulting, a leading consulting firm in the industry, whose strategies in business, technology, and finance proved instrumental.
- As the retail sector increasingly relies on technology, Clarkston's expertise was crucial in coordinating payment networks and issuers, ensuring compliant integration and streamlined transaction authorization and settlement for the co-branded credit card program.
- In addition to technical coordination, Clarkston played a pivotal role in developing strategies for optimizing rewards and loyalty alignment, leveraging the co-brand's value and enhancing customer retention through mechanisms that kept points active and encouraged ongoing card usage.
