Our Retailer Services practice area is focused on serving the payment-related needs of retailers. Our clients include the world’s leading retailers in all market segments – department stores, consumer electronics, home improvement, discounters, grocery, office supply, sporting goods, jewelry, catalog, e-commerce, oil, and specialty retail. From a product perspective, we have expertise with all branded card products (private label, co-brand, etc.), retail sales finance solutions, and alternative/emerging payment types. Our client reach is global in scope, and in addition to the U.S., we have advised retailers in Canada, Mexico, U.K., Spain, Germany, France, Japan, and Australia.
Client Profile
Our retail clients include the most successful retailers in the world. Their payment programs encompass co-brand and private label credit, gift/prepaid, and alternative payments such as transactional credit and decoupled debit. As indicated below, our clients span market sectors, channels, and geographical regions:
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Product & Program Expertise
We have extensive knowledge of retailer-based payment programs as well as other retailer financial services. Over the course of nearly 20 years, we have advised clients at both a strategic and tactical level on a broad range of product and program matters. Our product-related capabilities are listed below.
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Project Highlights
In any given year, we complete over 50 projects on behalf of retailers or other companies serving the retail segment. The highlights below are representative of the type and scope of assignments we complete and the results we helped clients achieve.
Partnership Finance
- New Programs: Advised many of the nation’s largest retailers on the launch of new card programs in both the US and international markets.
- Program/Product Expansion: Advised retailers in many sectors on the addition of new card products to an existing offering. Added co-brand to legacy private label programs as well as the inverse.
- Renewals: Routinely advise retailers on renewals of credit card partnership agreements. Renewed national scale retail programs with assets in excess of $20 billion since 2008.
- Restructurings: Restructured partnerships with total receivables in excess of $20 billion in the wake of the credit crisis.
Strategy Development
- Private Label and Co-Brand Credit: Advised numerous national retailers on strategies related to their branded credit card offerings including topics such as asset ownership, risk mitigation, organizational structure, performance benchmarking, and the like.
- Comprehensive Financial Services: Advised a top 5 retailer on the development of its comprehensive financial services strategy involving products such as prepaid cards, check cashing solutions, and money orders/transfers in addition to its flagship credit card program.
- Stored Value Strategy: Developed the long-term stored value product strategy for a Top 10 retailer. Identified and prioritized opportunities to capitalize on its successful gift card program by pursuing a host of stored value opportunities including a branded open-loop program.
Strategic Sourcing
- Processing: Managed comprehensive RFP processes for retailers in the selection of credit card and gift card processing platform providers.
- Servicing: Managed RFP processes in support of securing servicing platforms for retailer-based card programs.
Card Acceptance
- Strategy: Developed an integrated card acceptance strategy on behalf of a retailer that operated under multiple, independent brands and merchant acquiring contracts. Strategy identified cost-saving opportunities and other synergies associated with consolidating card acceptance services with one provider.
- Execution: Managed RFP processes for U.S. and international retailers in search of new acceptance partners; successfully negotiated pricing and service level improvements as part of the new contracts.
Insights
Branded payment programs (e.g,. Private Label and Co-Brand) continue to play a vital role for retailers in deepening customer relationships, driving incremental sales volume, and improving overall payments related costs. And, it is no surprise that actively managed programs will outperform similar programs that are just running on auto pilot. In our experience, the characteristics of actively managed programs include:
- Executive level sponsorship
- Dedicated staffing with defined performance targets
- Active engagement and buy-in from the store operations group
- Frequent training and performance measurement at the store associate level
- Strong collaboration with any outside partners (issuer, processor, servicer, etc.)
Given the complexity of the payments industry and the speed with which the rules of game are changing, simply focusing on branded payment programs is no longer enough. Unfortunately, for all but a few of the largest retailers, “payments strategy” is a bit of a foreign concept. Obviously, interchange is a super-charged topic and branded payment economics get some level of air time at the executive level, but given the importance of payments to the fundamental business model, larger retailers would benefit from a more coordinated approach to all types of payment related topics:
- Branded Programs: Private Label, Co-Brand, Sales Finance
- Payment Acceptance: Credit, Debit
- Alternative Payments: Layaway, Transactional Credit
- Stored Value
- Emerging Payments (e.g., mobile)
- Loyalty Participation
- Promotional Activity: Networks, Issuers, Partners
- Industry Relations
There is no substitute to an actively managed payments strategy.
Leadership
Our Retailer Services team draws on a pool of professionals with years of experience. Our leadership team has been with First Annapolis for almost 15 years and was responsible for launching and building the Retailer Services practice. The diversity of our client base coupled with the longevity of our client relationships allows us to bring insights that have been tested and proven.
For more information on our Retail Services leadership team, please reference their biographies:
