Consumers are increasingly aware of retail credit with 8 out of 10 (78%) shoppers aware of financing options that retailers offer, up from just 51% two years ago. Consumers also continue to show loyalty to retailers with whom they have a store card, with 40% saying they are more likely to shop at that retailer again.
The Vyze and Ipsos third annual Retail Credit Survey also found despite growing awareness and loyalty, the study also finds that there is room for retailers to improve their credit offerings. The majority (56%) of U.S. adults have never applied for retail financing online or in the store, including 50% of Americans who make over $100,000 a year.
Consumers want options beyond the familiar store card: Six out of 10 (62%) U.S. adults have a store card in their wallets – and 30% have 2 or more. Consumers want choice when it comes to financing a big purchase: traditional credit cards (40%); monthly payment plans (17%); store cards (13%); layaway (4%); lease to own (2%).
Younger shoppers move away from traditional credit cards: A majority (52%) of Gen Z shoppers and nearly 60% of Millennials are interested in ways beyond a traditional credit card to finance large purchases online. This compares to 42% of overall respondents who are interested in alternative financing options.
Amazon wins the store card battle: Amazon ranks #1 among consumers with store cards (32%) followed closely by Target (30%) and then Macy’s (24%). Millennials overwhelmingly choose to open store cards with Amazon.com (48%) and Target (44%) – followed by Costco (29%). This is extremely significant as 60% of Millennials stated they are more likely to shop with a retailer if they have their store card.
Consumers want the flexibility to apply for financing in any channel: Consumers want to apply for financing both online (43%) and in the store (44%). However, retailers should expect mobile to be a growing channel for credit. Millennials are much more likely to want a mobile application than older generations (16% vs. 1% of shoppers over the age of 55).