Extra rewards set to drive 2008 holiday sales

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By: Wise Marketer Staff |

Posted on November 26, 2008

While the retail community braces for flat or slightly lower retail spending this holiday season, some retailers can expect to benefit from savvy shoppers taking full advantage of credit and debit card reward programmes that offer rich incentives, with shopping dollars going to those merchants that provide high-value offers, according to Vesdia Corporation.

A recent survey of 1,000 American consumers, conducted by Kelton Research for Vesdia, found that 50% of shoppers this holiday season plan to use a credit or debit card that offers additional shopping incentives such as bonus points, miles, discounts or cash back.

Savvy consumers are increasingly aware of the special offers available to them and intend to patronise merchants that can help maximize their spending power. Vesdia, itself a supplier of merchant-funded reward networks for credit and debit card reward programmes, has reported a sharp increase in consumer spending during the past nine months for consumers using cards that offer additional rewards (i.e. for shopping at participating stores, catalogues or online merchants).

In a sample of more than 10 million consumers from January to September 2008, consumers who were enrolled in reward card programmes with a merchant network increased spending by 37% compared to the same time period in 2007. Vesdia is therefore predicting that this trend will continue through to Black Friday and Cyber Monday, suggesting that consumers will favour using a card that provides additional incentives.

"Consumers can earn double, up to as much as 10 times, the standard reward programme earnings rate by shopping at specific merchants," according to Lars Holmquist, chief marketing officer for Vesdia. "And, with our network, this kind of accelerated reward rate is gained in addition to sale prices and special offers that the consumer finds in-store or online."

Vesdia reports that, although merchants have long offered incentives for shopping online, the strongest growth in spending and reward earning in 2008 is occurring in the bricks-and-mortar retail channel.

While online merchandising is important, and online shopping appeals to a large segment of the population, more consumers appear to be conducting research online and then making their purchases at bricks-and-mortar stores that offer better prices and reward incentives.

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