Food Gifting in the U.S., 2nd Edition
The U.S. market for food gifting continues to expand in sales and product offerings, and is one of the few areas of gifting that is doing so in the current challenged economy. Consumer interest in food gifts continues to increase, with sales up 9.6% from 2007 to 2009. This market is driven by many factors, including consumers wishing to save themselves agony over gift decisions while desiring to give a gift that is unique, personal, indulgent, convenient, fun to share and sure to please. The corporate food gifting sector, although considerably smaller in total sales, grew 3.8% between 2007 and 2009.
During the Christmas/Hanukkah holiday season of 2009, consumer purchases of food gifts increased 12% over sales during the same period in 2008. Candy and food spending was up about $10 per person and was the only category that rose among gift items, with shoppers overall diminishing their gift purchases by an average of 3.2% from 2008.
According to CES data, average annual per-person expenditures on food gifts increased from $93 in 2007 to $97 in 2008, and were estimated at $105 in 2009. The average annual per-person expenditures spent on food gifts as a percentage of expenditures for all gifts increased from 7.8% in 2007 to 8.3% in 2009, and is projected at 8.5% in 2010.
Although the trend of self-gifting has decreased overall, it has increased in food gifts.
During the first half of 2010, holiday food gift sales increased from the previous year, indicating a promising year of growth in this sector. A rising interest in gourmet, natural/organic and specialty demographic food gifts (food gifts for kids, food gifts for sports fans, ethnic food gifts, etc.) is fueling demand.
Gift-boxed chocolates remain a mainstay of the food gifting market in the United States, with sales totaling $227.4 million in 2008 and $223.3 million in 2009, a 1.8% decrease.
The continuing expansion of the market for food-gifting is remarkable in that it comes at a time when Americans are reducing spending on gifts overall. Food gifting combines practicality (a consumable item and one that does not require an intimate knowledge of the recipient's lifestyle, needs or tastes). Although clothing remains the most popular Christmas holiday gift, it is also the most likely item to be returned.
Despite the increase in the price of gas over the past few years, brick-and-mortar retailers remain the leading venue for food gifts. Brick-and-mortar retailers held approximately 47% of the food gifting market in 2009, while non-traditional retailers (which includes direct marketers and online food gift retailers) had approximately 53% of the market. Sales of food gifts at brick-and-mortar retailers increased 11% from 2007 to 2009, while online and direct market sales of food gifts increased 5.7% during this period.
Food Gifting in the U.S., Second Edition, focuses on the U.S. market for consumer and corporate food gifts, with a focus on this sector as part of the total gift-giving market. The report analyzes the highly fragmented market by channel, including brick-and-mortar retailers (representing nearly half of all food gift sales), online and direct marketers, and independents, franchises and distributorships. Trends in food gifting are examined, along with factors driving the food-gifting market. The report also reviews the results of an exclusive Packaged Facts online poll, along with marketing, retail and consumer trends and growth opportunities.
Report Methodology
The information in Food Gifting in the U.S., Second Edition, is based on both primary and secondary research. Primary research involved interviews with industry experts and food-gifting business managers. Secondary research entailed gathering data from relevant trade, business and government sources, including the U.S. Bureau of Labor Statistics, Unity Marketing, the National Retail Federation, BIGresearch, IRI InfoScan, company reports, retail audits, trade associations, etc. Consumer data were obtained from Simmons Market Research Bureau’s Fall 2009 National Consumer Study. In addition, Packaged Facts conducted its own online poll of 1,800 adults in May 2010 to measure the spending and attitudes of shoppers.
What You’ll Get in This Report
Food Gifting in the U.S., Second Edition, makes important predictions and recommendations regarding the future of this market, and pinpoints ways current and prospective players can capitalize on current trends and spearhead new ones. No other market research report provides both the comprehensive analysis and extensive data that Food Gifting in the U.S., Second Edition, offers. The report provides extensive data presented in easy-to-read and practical charts, tables and graphs.
How You Will Benefit from This Report
If your company is already doing business in the food-gifting market, or is considering making the leap, you will find this report invaluable, as it provides a comprehensive package of information and insight not offered in any other single source. You will gain a thorough understanding of the current market for food gifts, as well as projected markets and trends through 2014.
This report will assist:
During the Christmas/Hanukkah holiday season of 2009, consumer purchases of food gifts increased 12% over sales during the same period in 2008. Candy and food spending was up about $10 per person and was the only category that rose among gift items, with shoppers overall diminishing their gift purchases by an average of 3.2% from 2008.
According to CES data, average annual per-person expenditures on food gifts increased from $93 in 2007 to $97 in 2008, and were estimated at $105 in 2009. The average annual per-person expenditures spent on food gifts as a percentage of expenditures for all gifts increased from 7.8% in 2007 to 8.3% in 2009, and is projected at 8.5% in 2010.
Although the trend of self-gifting has decreased overall, it has increased in food gifts.
During the first half of 2010, holiday food gift sales increased from the previous year, indicating a promising year of growth in this sector. A rising interest in gourmet, natural/organic and specialty demographic food gifts (food gifts for kids, food gifts for sports fans, ethnic food gifts, etc.) is fueling demand.
Gift-boxed chocolates remain a mainstay of the food gifting market in the United States, with sales totaling $227.4 million in 2008 and $223.3 million in 2009, a 1.8% decrease.
The continuing expansion of the market for food-gifting is remarkable in that it comes at a time when Americans are reducing spending on gifts overall. Food gifting combines practicality (a consumable item and one that does not require an intimate knowledge of the recipient's lifestyle, needs or tastes). Although clothing remains the most popular Christmas holiday gift, it is also the most likely item to be returned.
Despite the increase in the price of gas over the past few years, brick-and-mortar retailers remain the leading venue for food gifts. Brick-and-mortar retailers held approximately 47% of the food gifting market in 2009, while non-traditional retailers (which includes direct marketers and online food gift retailers) had approximately 53% of the market. Sales of food gifts at brick-and-mortar retailers increased 11% from 2007 to 2009, while online and direct market sales of food gifts increased 5.7% during this period.
Food Gifting in the U.S., Second Edition, focuses on the U.S. market for consumer and corporate food gifts, with a focus on this sector as part of the total gift-giving market. The report analyzes the highly fragmented market by channel, including brick-and-mortar retailers (representing nearly half of all food gift sales), online and direct marketers, and independents, franchises and distributorships. Trends in food gifting are examined, along with factors driving the food-gifting market. The report also reviews the results of an exclusive Packaged Facts online poll, along with marketing, retail and consumer trends and growth opportunities.
Report Methodology
The information in Food Gifting in the U.S., Second Edition, is based on both primary and secondary research. Primary research involved interviews with industry experts and food-gifting business managers. Secondary research entailed gathering data from relevant trade, business and government sources, including the U.S. Bureau of Labor Statistics, Unity Marketing, the National Retail Federation, BIGresearch, IRI InfoScan, company reports, retail audits, trade associations, etc. Consumer data were obtained from Simmons Market Research Bureau’s Fall 2009 National Consumer Study. In addition, Packaged Facts conducted its own online poll of 1,800 adults in May 2010 to measure the spending and attitudes of shoppers.
What You’ll Get in This Report
Food Gifting in the U.S., Second Edition, makes important predictions and recommendations regarding the future of this market, and pinpoints ways current and prospective players can capitalize on current trends and spearhead new ones. No other market research report provides both the comprehensive analysis and extensive data that Food Gifting in the U.S., Second Edition, offers. The report provides extensive data presented in easy-to-read and practical charts, tables and graphs.
How You Will Benefit from This Report
If your company is already doing business in the food-gifting market, or is considering making the leap, you will find this report invaluable, as it provides a comprehensive package of information and insight not offered in any other single source. You will gain a thorough understanding of the current market for food gifts, as well as projected markets and trends through 2014.
This report will assist:
- Marketing Managers identify market opportunities and develop targeted promotion plans for food gifts.
- Research and development professionals stay on top of competitor initiatives and explore demand for food gifts.
- Advertising agencies working with clients in the banking and retail industries understand the product buyer to develop messages and images that compel consumers to buy food gifts.
- Business development executives understand the dynamics of the market and identify possible partnerships.
- Information and research center librarians provide market researchers, brand and product managers and other colleagues with the vital information they need to do their jobs more effectively.
Contents
CHAPTER 1: EXECUTIVE SUMMARYScope and Methodology
Report Scope
Report Methodology
Macroeconomic Influence on the Credit Card Industry
Consumer confidence helps put brakes on spending
Unemployment picture stabilizes
Housing and equities still down
Consumer Credit Trends
Chipping away at the debt burden
But higher charge-off rates play a role
The banks’ side of the argument: card lending policies tighten
Unused credit lines pulled
Eleven consecutive quarters of credit card tightening
The result: Fewer prospects.
Credit card interest rates increase while banks’ borrowing costs decrease
Consumer Payment Trends: An Overview
Rewards cards in the wallets of more than 75% of credit card users
Cash still the most widely used payment instrument for retail payments
REGULATORY ANALYSIS
The CARD Act: Implementation and Response
Regulation E
Dodd-Frank Wall Street Reform and Consumer Protection Act
Bureau of Consumer Financial Protection
The Durbin Amendment
REWARDS CARD MARKET SIZE AND FORECAST
Rewards Cards to Continue to Build Credit Card Share
Account attrition rampant; rewards no exception
Moving upstream, rewards in tow
A question of degree
And a question of fitting into broader strategy
Rewards card share to grow incrementally through 2013
REWARDS TRENDS, INNOVATIONS & STRATEGIES
A Tale of Two Groups: the Affluent and the Young
Why target the affluent? Simple: big card spend; high FICOs
MasterCard rolls out the red carpet
American Express Spins Gold
Chase asks customers to try Sapphire
What about younger consumers?
Debit stalks credit
Trends in Rewards Types
Practicality of cash rewards drives increased consumer interest
JPM Chase Brings Back 5% Cash Back—with caveats
Private Label Cards: Retailers Taking a Second Look?
Co-branding trend runs strong
Small-Business Rewards
Credit cards a fraction of small-business B2B transactions
Debit Rewards
Debit Rewards Gaining Traction
Cash back debit cards on the rise
REWARDS PROFILES
Bank of America
Reward Cards Offerings
2010 Card Strategy
Wells Fargo & Company
Rewards Cards
Capital One Financial
Entrance into Reward Cards & Offerings
Discover Financial Services
Network and Card Initiatives
Rewards Cards
Rewards Snapshots: MasterCard and Visa
Co-branding and Premier Rewards
Relationship Rewards Construct
Card counts drop precipitously
Visa
Visa’s Three-tiered Consumer Credit Platform
CONSUMER CREDIT CARD USAGE TRENDS
Credit card use dips
MasterCard credit card use drops the most and American Express the least
American Express cardholders report highest level of engagement
But cardholder engagement also drops over time
Among full-time employed, credit card use is stable
But engagement differentiates “Big “Four”
And engagement trends suggest credit card pullback
Swimming upstream: assessing higher-HH-income brackets
MasterCard engagement highest among $150K+ HH income consumers
Discover card engagement falls ten percentage points during 2007-2010
American Express Blue at 12.4 million mark
Discover card accounts at about 31 million
MasterCard Consumer Credit Card Use & Engagement
Visa Consumer Credit Card Use & Engagement
Co-Brand Usage Trends, Big Four
CHAPTER 2: MACROECONOMIC INFLUENCES, REGULATIONS AND THE REWARDS CARD MARKET
Consumer confidence helps put brakes on spending
Current perceptions of business conditions, job prospects darken
Expectations Index dips as job prospect optimism dims
Unemployment picture stabilizes
Figure 2-1: Unemployment Rate and Consumer Confidence, 2007-2010
Unemployment picture affects some more than others
Unemployment rate among less educated jumps five percentage points
Credit worthiness suffers
Young adults in a bind
Table 2-1: Unemployment Rate, Selected Demographics, 2007-2010 (%)
Black and Hispanic consumers also more likely to be affected
How can increasing personal savings and reducing the debt burden be bad?
Unemployment and GPD forecast
Slow employment rebound to coincide with a slow rebound in consumer spending
Table 2-2: Unemployment and GDP Forecast, 2010-2012
Stock & housing declines deflate household wealth; rebound to record 2006 levels a long way off
Q1 2009 to Q1 2010 sees uptick in household wealth, but still $10 trillion off 2006 high
Table 2-3: Household Net Worth, 2005-2010 (in trillions of $)
Case-Shiller and FOMC housing pessimism
Table 2-4: Household owners' equity in real estate as a percentage of households owner-occupied real estate, 2003-2010 (%)
Q2 2010 summary equities analysis
Figure 2-2: Wealth Effect: Wilshire 5000 and Case Shiller Index, 2007-2010
REGULATORY ANALYSIS
The CARD Act: Implementation and Response
Card Act - Stage I - August 2009
Card Act - Stage II - February 2010
Card Act - Stage III - August 2010
Ramifications of the CARD Act
Cost to banks in the billions
Making up the difference
Regulation E
Dodd-Frank Wall Street Reform and Consumer Protection Act
Bureau of Consumer Financial Protection
The Durbin Amendment
Fees
Reasonable and proportional
MARKET SIZE & GROWTH
Rewards Cards to Continue to Build Credit Card Share
Account attrition rampant; rewards no exception
Moving upstream, rewards in tow
A question of degree
And a question of fitting into broader strategy
Rewards card share to grow incrementally through 2013
Table 2-5: Rewards Cards, Percentage Share of Credit Cards, 2005-2013
The Backdrop: Credit Card Market Size
Table 2-6: Credit Card Accounts, Big Four, 2005-2009
Table 2-7: Credit Cards in Force, Big Four, 2005-2009
Table 2-8: Credit Card Payments Volume, Big Four, 2005-2009
CHAPTER 3: CONSUMER CREDIT TRENDS
Chipping away at the debt burden
Consumer credit and home mortgage debt rates on the decline
Figure 3-1: Consumer Debt Burden, 2000-2010
Debt service ratios peak at onset of 2008 and decline thereafter
Figure 3-2: Savings Rate & Debt Service Ratio & Financial Obligations Ratio, 2007-2010
Revolving credit trends in focus
Figure 3-3: Consumer Revolving and Non-Revolving Debt Trends, 2004-2010
But higher charge-off rates play a role
Figure 3-4: Credit Card Charge-off Rates, Top 100 Banks, 2005-2010
The banks’ side of the argument: card lending policies tighten
Unused credit lines pulled
Eleven consecutive quarters of credit card tightening
The result: Fewer prospects
Figure 3-5: Credit Card Loan Tightening, Top 100 Banks, 2007-2010
Credit card interest rates increase while banks’ borrowing costs decrease
Federal funds target rate at historical lows
Profit margins breathe easier
Figure 3-6: Consumer Auto, Personal and Credit Card Loan Interest Rates, 2004-2010
Card Portfolios Reflect Consumer & Issuer Behavior
American Express charge-off trends reflect a more affluent, creditworthy consumer
Figure 3-7: Charge-Off Rates, Big Six, Q1 2009-Q1 2010
Bank America credit card delinquency rates twice as high as AMEX rates
Figure 3-8: Delinquency Rates, Big Six, Q1 2009-Q1 2010
Big Six Issuers: Loan Balances and Purchase Volume, Q1 2009-Q1 2010
Figure 3-9: Card Loan Balances, Big Six, Q1 2009-Q1 2010
Figure 3-10: Purchase Volume, Big Six, Q1 2009-Q1 2010
CHAPTER 4: CONSUMER PAYMENT TRENDS: AN OVERVIEW
Stronger Debit Growth Virtually Assured
But that is not necessarily bad
Figure 4-1: Credit, Debit, Cash and Check Usage Trends, by Point of Sale, 2007-2009
A Disenfranchised Lot
Figure 4-2: Reported Changes to Card Terms & Conditions, 2009
A crisis in confidence
Followed by direct action
Card transactions 53% of all payment transactions
Debit overtakes credit
Rewards cards in the wallets of more than 75% of credit card users
Table 4-1: Current Adoption of Payment Instruments, By Instrument Features, 2008
Table 4-2: Number of Adopted Bank Accounts and Payment Cards, 2008
Cash still the most widely used payment instrument for retail payments
Table 4-3: Use of Payment Instruments in a Typical Month, by Type of Instrument, 2008
Share of cash and checks as a percentage of transactions to continue to drop
Table 4-4: Actual and Expected Changes in Use of Payment Instruments, By Period of Change, 2008 (%)
Credit cards still the domain of larger-ticket purchases
Credit cards have an edge in gas and automotive expenses
Figure 4-3: Comparison of Credit and Debit Card Usage, by Type of Purchase, 2009
I’ll switch, I’ll switch!
For a lower rate—or better rewards
Figure 4-4: Card-Switching Rationales, 2009
Cash back, please
Figure 4-5 Reward Type Preferences, 2009
Credit card users who pay bills with their cards versus those who do not
First Data: rewards memberships: credit cards decline; debit cards increase
CHAPTER 5: REWARDS TRENDS, INNOVATIONS & STRATEGIES
Credit cardholders spending less, weighing rewards
Rewards still incent switching
A TALE OF TWO GROUPS: THE AFFLUENT AND THE YOUNG
Why target the affluent? Simple: big card spend; high FICOs
Rewards in the acquisitions spotlight
Rewards and FICO
Tale of the tape
Visa rolls out the red carpet
American Express Spins Gold
Chase asks customers to try Sapphire
What about younger consumers?
Debit stalks credit
ZYNC—none too soon
A bevy of packs; a bevy of choice
TRENDS IN REWARDS TYPES
Practicality of cash rewards drives increased consumer interest
JPM Chase Brings Back 5% Cash Back
Caveats
Travel rewards not dead
Chase launches Continental Airlines OnePass Plus Card
Benefits added to Continental Airlines Presidential Plus Card
Cap One Introduces 'Simplified' Venture Travel Rewards Card
Travelocity Rewards American Express Card
Airline Rewards worth a Fight
CO-BRAND REWARDS CARD TRENDS
A question of scale, return on investment, and loyalty generation
Not the end of co-brand, but the rationalization of co-brand
Rationalization to benefit American Express
American Express on the Move
American Express Partners with Travelocity for Travel Rewards Card
American Express Replaces Visa on Co-branded Macy's Cards
Chase and Starbucks Pull Plug on Duetto
Citigroup drops Home Depot and has challenges with Zales
Best Western International refreshes cobranded rewards card
PRIVATE LABEL CARDS: RETAILERS TAKING A SECOND LOOK?
Co-branding trend runs strong
Until Now: Target’s Flip-Flip Sends Industry a Message
Test measured effect of rewards
U.S. Bancorp Buys Kroger Card Portfolio
Getting Merchants to Shoulder More of the Rewards Bill
First Data is doing it
Barclays is doing it
SMALL-BUSINESS REWARDS
Credit cards a fraction of small-business B2B transactions
OPEN for competition
Small business co-branding with Lowe’s
But Competition Looms
JPMorgan Chase salivates over small business market
JP Morgan Chase Ink
DEBIT REWARDS
Debit Rewards Gaining Traction
Debit Rewards—for a Fee
Chase Unveils Disney Rewards Visa Debit Card with $25 Annual Fee
Joining a growing list of fee-based debit rewards cards
But “free” is an option, too
KeyBank offers free MasterCard contactless rewards debit card
Cash back debit cards on the rise
Cash back to incent debit trial
Keep the Change!
Way2Save!
A regional twist: Commuter Cash
CHAPTER 6: AMERICAN EXPRESS: REWARDS ANATOMY AND STRATEGY
Value Proposition
Table 6-1: 2008 Worldwide Cardholder Spend, American Express, Visa, & MasterCard
Company overview
Summary Introduction: Network and Card Initiatives
Rewards Cards and Loyalty Programs Are the Name of the Game
Response to Recession
Response to Credit CARD Act
Prospects
American Express well-situated to take advantage of frugality trend
Threats to Growth
Reduction in discount revenue a foreboding possibility
More partnership agreements & greater card acceptance needed
What Differentiates American Express Now Makes It More of a Target
No debit card?
Regulatory change
American Express Customer Patterns
Shift to discretionary spend
Shift toward everyday spending continues
Charge Cards: Reemergence of a Mainstay Product
Two Sides of the Demographic Coin: Premier Rewards Gold and ZYNC Card
Table 6-2: Charge Card as Debit Card: Benefits of Charge
Don't Take Chances, Take Charge
Revolving Credit Cards
In-House Proprietary Cards Perform—But Are They Being Left Behind?
Significant share of billings, but scaling back
Co-brand Cards: The Fight Is On
U.S. Card Services: Co-Branded Cards Grow Sales
Co-brand Contract Developments
Co-brand Partnerships with Financial Services Institutions
Airline strength also vulnerability
Membership Rewards Program Underpins Charge, Proprietary and Co-Brand Cards
Rewards: An Increasingly Expensive Proposition
A double-sided dilemma
Expenses already beginning to mount
American Express: Relationship of Discount Rate to Merchants, Issuers, and Acquirers
How it works
Leveraging its closed-loop network
Whew: No Interchange Fee
Sales and Card Growth
Worldwide assessment
Table 6-3: American Express Card Billed Business, Discount Revenue, Net Card Fees, 2007-Q2 2010 (in billions of $)
Table 6-4: American Express Discount Rate, Card Spend, & Fee per Card, 2005-Q2 2010
Cardmember rewards expenses
Table 6-5: American Express Rewards Expense and Liabilities, 2007-Q2 2010
Table 6-6: American Express, Credit Quality Metrics, 2006-2009 (in billions of $)
U.S. growth trends
Table 6-7: American Express U.S. Region Billed Business & Cards in Force, 2005-2009
U.S. Card Services
Table 6-8: American Express, Quarterly Summary, Q2 2009-Q2 2010
Table 6-9: American Express, U.S. Card Services Segment, Selected Sales Metrics, 2006-2009 (in billions of $)
Table 6-10: American Express, U.S. Card Services Segment, Card Billed Business, 2005-2009
Table 6-11: American Express, U.S. Card Services, Q2009-Q2 2010
Table 6-12: American Express, Global Network Services Segment, Billed Business & Cards in Force, 2007-Q2 2010
Q1 2010
Q2 2010
Q2 2010 rewards-related expenses skyrocket
CHAPTER 7: JP MORGAN CHASE: REWARDS ANATOMY & STRATEGY…
Value Proposition
Card Services: Summary Overview
Response to Recession
Identifying loss rate correlations
Figure 7-1: JPMorgan Chase Card Services, Average Net Charge-off Unit Rate by External Card Debt, 2008-2009
Then act accordingly
Table 7-1: JPMorgan Chase Card Services, Credit Line Decreases & Account Closures, by Cardholder Debt-to-Income Rate, 2008-2009
And moving forward, narrow the prospect pool
Table 7-2: JPMorgan Chase Card Services, Credit Line Decreases & Account Closures, by Cardholder Debt-to-Income Rate, 2008-2009
Adjust intro rates, promo rates, and contract rates
Table 7-3: JPMorgan Chase Card Services, Interest Rate Offerings Change, 2008-2009
A more sophisticated risk management strategy
Response to CARD Act
Prospects
Credit card outstandings on track to shrink 15% in 2010
Threats to Growth
Reduction in interchange revenue
Regulatory change
JPMorgan Chase Card Service Customer Patterns
Sales among affluent customers strengthen most
Bigger wallets; increased rate of spend
Consumer confidence and sales volume not a coincidence?
Shift to discretionary spend
A more creditworthy cardholder base
Figure 7-2: FICO Spreads, “Big Six” Issuers, Trust Receivables, 2009
Card Strategy: Build Brand, Rewards & Customer Relationship
2008 - 2009 - 2010
Card and Rewards Initiatives
Ultimate Rewards, Blueprint, Sapphire, and Ink frame strategy
“Rewards-engaged” customers outperform across all key metrics
Table 7-4: JPMorgan Chase Card Services, Rewards-Engaged Metrics, 2009
Figure 7-3: JPMorgan Chase Card Services, Rewards Share of Outstandings, 2004-2009
Co-brand: Keep stronger hands and eliminate weaker ones
Table 7-5: JPMorgan Chase Card Services, Co-brand and Affiliation Rationalization, 2008-2009
Leveraging branch presence & co-brand relationships in affluent markets
JPMorgan Chase Card Services by the Numbers
Card metrics
All Chase
Chase not Washington Mutual
Washington Mutual
Loan loss allowance increases
Down, down, down: cards, transactions and volume
Table 7-6: JPMorgan Chase Card Services, Financial and Business Metrics, 2007-2009
Table 7-7: JPMorgan Chase Card Services, Selected Balance Sheet Data, 2007-2009
Lions and tigers and Washington Mutual, oh, my!
Table 7-8: JPMorgan Chase Card Services, Washington Mutual Key Stats, 2007-2009
CHAPTER 8: CARD ISSUER AND ASSOCIATION ANALYSIS
Bank of America
Company Overview
Credit Card Division (Global Cards Services)
Reward Cards Offerings
Financial Objectives to Card Issuance
Financial Results and Root Cause
Something Needs to Be Done
Future of BAC’s Reward Card Programs
Card Act Response
Card Act and Rewards
2010 Card Strategy
Affinity program
Bank of America: Key Metrics
Table 8-1: Bank of America, Credit Card—Domestic, Key Metrics, 2007-2009
Wells Fargo & Company
Company overview
Network and Card Initiatives
Rewards Cards
Response to Credit CARD Act
Response to Recession
Prospects
Wells Fargo: Key Metrics
Table 8-2: Wells Fargo, Key Credit Card Metrics, 2007-2009
Capital One Financial
Company Overview
History and development
Entrance into Reward Cards & Offerings
From monoline to bank
The Great Recession’s impact on Capital One
Future of Capital One’s Reward Card Programs
Simplicity and transparency
Card Act Response
Card Act and Rewards
Capital One: Key Metrics
Table 8-3: Capital One, Key Credit Card Metrics, 2007-2009
Discover Financial Services
Company overview
Network and Card Initiatives
Rewards Cards
Table 8-4: Discover, % Cashback Bonus per Dollars Spent, 2007-2009
Response to Credit CARD Act
Response to Recession
Prospects
Table 8-5: Discover, Key Credit Card Metrics, 2007-2009
MasterCard..
Overview
Co-branding and Premier Rewards
Relationship Rewards Construct
MasterCard Marketplace open for business
MasterCard by the Numbers
Card counts drop precipitously
2008 declines intensify in 2009
Table 8-6: MasterCard U.S. Credit Card Metrics, 2005-2009
Visa
Visa’s Three-tiered Consumer Credit Platform
Visa by the Numbers
Table 8-7: Visa U.S. Credit Card Metrics, 2005-2009
CHAPTER 9: CONSUMER CREDIT CARD USAGE TRENDS
A Preface to Survey Analysis: Debit Users, Transactors, and Revolvers
Credit card use dips
Some 3.1 fewer million consumers using credit cards in 2010 versus 2007
MasterCard credit card use drops the most and American Express the least
Table 9-1: Credit Card Usage, by Credit Card Types, 2006-2010
Engaged cardholders are the prize
American Express cardholders report highest level of engagement
But cardholder engagement also drops over time
Table 9-2: Credit Card Use & Engagement Ratio, by Big Four Issuers, 2006-2010
Full-time employed provide the take of the tape
Among full-time employed, credit card use is stable
But engagement differentiates “Big “Four”
And engagement trends suggest credit card pullback
Table 9-3: Credit Card Use & Engagement Ratio, Employed Cardholders, by Big Four Issuers, 2006-2010
Swimming upstream: assessing higher-HH-income brackets
MasterCard engagement highest among $150K+ HH income consumers
Table 9-4: Credit Card Use & Engagement Ratio, $75K-$99K HH Income, by Big Four Issuers, 2006-2010
Discover card engagement falls ten percentage points during 2007-2010
Table 9-5: Credit Card Use & Engagement Ratio, $100K-$149K HH Income, by Big Four Issuers, 2006-2010
American Express holds court over engaged, affluent cardholders
Table 9-6: Credit Card Use & Engagement Ratio, $150K+ HH Income, by Big Four Issuers, 2006-2010
American Express Consumer Credit Card Use & Engagement
Account growth during 2007-2010
American Express Blue at 12.4 million mark
Table 9-7: Credit Card Use & Engagement, American Express Consumer Card Products, 2006-2010
Discover Consumer Credit Card Use & Engagement
Table 9-8: Credit Card Use & Engagement, Discover, 2006-2010
MasterCard Consumer Credit Card Use & Engagement
Table 9-9: Credit Card Use & Engagement, MasterCard Consumer Card Products, 2006-2010
Visa Consumer Credit Card Use & Engagement
Table 9-10: Credit Card Use & Engagement, Visa Consumer Card Products, 2006-2010
Co-Brand Usage Trends, Big Four
Table 9-11: Airline/Hotel & Organization Co-Branded Credit Cards, by Big Four Issuers, 2006-2010
Table 9-12: Airline/Hotel & Organization Co-Branded Credit Cards, $100K-$149K HH Income, by Big Four Issuers, 2006-2010
Table 9-13: Airline/Hotel & Organization Co-Branded Credit Cards, $150K+ HH Income, by Big Four Issuers, 2006-2010 Skip to top