Retail loyalty programs—the most prevalent type in consumers’ wallets—help brands develop lasting customer relationships through easy, accessible, and appealing incentives. Co-brand credit cards—issued as partnerships between major brands, banks, and card networks—have long been a key piece of that puzzle: At a 2019 investor meeting, Best Buy listed its credit card as the second-largest driver of customer loyalty and repeat action. And BJ’s Wholesale Club noted at Goldman Sachs’ 2019 Global Retailing Conference that cardholders show up, shop, spend, and renew at higher levels. This is likely because retail co-brands enable shoppers to earn rewards tied to retailers they love on all their spending.
To maintain momentum, especially since shopper loyalty to specific brands fell in 2020, retailers must meet customers where they’re shopping. Right now, that’s online: US ecommerce sales will comprise 15.3% of US retail this year and reach nearly a quarter by 2025, per eMarketer.
Rapid ecommerce growth has not diminished co-brands’ value to shoppers, but it is forcing major programs to rethink how to reach loyalists and maintain their value to this base.