Private-label credit cards are viewed as far more than pieces of plastic at Maurices. Rather, they are another opportunity for the kind of quality bonding with shoppers that has become a cornerstone of the apparel retailer’s strategy. “When a customer signs up for a card, she becomes an advocate of our brand,” says Vivian Behrens, senior vice president and chief marketing officer for
Maurices’ parent company, Suffern, N.Y.-based Dress Barn. She also spends more.

The average dollar amount of a purchase made with a Maurices credit card is 36 percent higher than one made by a cash customer, says John Schroeder, senior vice president of store operations at Duluth, Minn.-based Maurices. Such purchases also are 30 percent higher than transactions made with other bank credit cards.

In today’s tricky retail climate, shoring up the spend of shoppers who are still hitting the stores can be crucial. During Dress Barn’s Q2 conference call, analysts were told that Maurices’ average unit sales increased 7.5 percent, offsetting a 6.5 percent decline in traffic. Loyal customers are going to continue to shop when times are tough if they enjoy spending time in a store, Schroeder says.

“Maurices is a brilliant example of how client commitment — matched with keen focus on a program — can really net some very significant success,” says Melisa Miller, senior vice president and chief client officer for retail services at Alliance Data. The Dallas-based issuer of private-label card programs has nearly 92 million cardholders generating more than $7.5 billion in credit sales annually.

Alliance Data had an existing relationship with Dress Barn that pre-dates the retailer’s 2005 acquisition of Maurices. Between the Dress Barn and Maurices concepts, about 25 percent of sales are done on private label credit cards, according to a corporate presentation delivered in April at the SunTrust Robinson Humphrey Annual Institutional Conference.

Conference attendees were offered the following profile of the typical Maurices shopper:
• She is between 17 and 34 years old.
• She is single (61 percent) and working (83 percent), though she might also still be in school (50 percent).
• There’s a good chance she still lives with her parents.

The college customer is a major focus of Maurices’ credit card program, be it through campus connection programs or associate efforts. “Early credit experience is a really great tool,” Miller says, to “responsibly engage [shoppers] early in their buying life cycle when they have some new wants and needs.”

From there, it makes sense to foster that relationship as needs change and shoppers evolve. That’s what Maurices is doing. “I will tell you that John is [intense] about inspiring lifetime relationships with his customers,” Miller says of Schroeder. “I have seen nothing like it.”

Schroeder says he has seen several examples of three generations of one family shopping together — with all of them holding Maurices cards.
Private-label credit cards can be “a great place to start understanding how you can cultivate more loyalty with the customers,” says Kelly Hlavinka, who directs consulting, publishing, education and research projects for Colloquy, Alliance Data’s Milford, Ohio-based loyalty consulting arm.

Loyalty marketing continues to be a very vibrant space, she says, and “in many ways the new battleground is going to be in the retail sector.” Young adults are one of the demographic groups offering strong opportunities for growth, Hlavinka says, adding that the affluent consumer segment has become somewhat oversaturated in terms of loyalty marketing.

Citing an Info Shop report, a recent Colloquy publication states that the private-label credit card market is projected to grow 56 percent between 1998 and 2010. “That growth will continue to rely on retailers’ ability to leverage the PLCC as a loyalty-marketing tool,” it says.

Keep it fresh
The private-label landscape is becoming more crowded, Miller says, but “we actually think that validates what we can bring to our clients.” The key to standing out is ensuring that marketing, messages and offers remain fresh and relevant, she says.

Maurices has nearly 650 stores (many in smaller markets) and is opening new locations at a rate of about 75 per year, according to Schroeder.

Dress Barn has been working to grow its customer database, which now includes a significant number of Maurices credit card holders, Behrens says. “Over the last year we have more than quadrupled the amount of communication that goes out to these customers.”

Monthly credit card statements also present an opportunity to strike a chord with customers. Alliance Data’s analytics team can help retail clients examine a shopper’s recent purchase behavior and gauge what they are most likely to be in the market for next. Messages that go out with the statement can be selected accordingly.

“This really ties back to the analytics,” says Miller. She offers, as a hypothetical example, a shopper who always buys the same item: Her monthly statement might include a message about a cashmere sweater sale in order to help broaden her buying habits.

Or perhaps a cardholder has a history of visiting a store or the company’s website once every five months. “Our job is to get that down to four [months] and then three” between visits, Miller says. “We worry a lot about timing and we worry about … the relevant message.”

Behrens’ advice for fellow retailers contemplating a private-label credit card program? “Don’t do it if you think you have to.”

Schroeder agrees. “If you put half an effort into it,” a credit card program won’t have the desired effect for a retailer, he says, adding he has seen that scenario play out at other retail concepts where the focus has slipped away from the cards.

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