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Synchrony Financial, the provider of private-label cards for retailers like Walmart and Toys R Us, announced strong volume growth across business segments in its Q1 2016 earnings call held last week.
The firm’s growing purchase volume, which rose 17% year-over-year (YoY) in Q1, indicates that store cards are continuing to become an increasingly popular option for US shoppers.
Synchrony believes that two major factors catalyzed its Q1 growth: Strong value proposition: Synchrony cards, which offer consumers strong rewards programs and access to point-of-sale (POS) financing, give the firm’s customers incentives to continue shopping with its cards, according to CEO Margaret Keane.
Online and mobile success: And the firm’s strong online and mobile offerings, like mobile wallet partnerships and digital payment apps like CareCredit, add value in the form of convenience and could be accelerating online and mobile growth. Synchrony’s digital channels grew by 29% YoY in Q1, a quicker pace than the 23% growth seen in the previous quarter. That means its digital gains are growing faster than “US growth trends,” which are holding steady at a 14-15% increase.
The firm is looking to steer consumers toward its digital channels through added rewards programs and online banking. Synchrony is building out new rewards programs, like one it recently launched with Walmart, that give consumers additional rewards for making purchases on digital channels, which could further incentivize and grow digital offerings. And Synchrony is also committed to building out a full online ecosystem — Keane briefly noted that the firm is looking at making Synchrony Bank into a “leading full-scale online bank.”
Two factors will help Synchrony sustain its digital growth: Loyalty: although Synchrony is still heavily reliant on in-store […]
