Loyalty cards, credit options and economic market development

Abstract

Purpose

This paper analyses three strategies in customers’ use to afford consumption in a developed and an emerging market for different product groups. The strategies are: (1) usage of loyalty cards, (2) usage of credit cards and (3) usage of long-term credits.

Design/methodology/approach

Mall intercept surveys conducted in Poland (emerging market) and Germany (developed market) provide data for testing a set of hypotheses using ANOVAs.

Findings

Results show that customers in emerging markets show no differences in the usage of loyalty cards for product categories with high shopping frequency (groceries) compared to developed markets, while in all other product categories loyalty card usage is stronger. Results show further that in low price categories, customers in emerging markets use credit card payments more often compared to customers in developed markets. In high price categories, they use credit cards less often, but long-term credits more often.

Research limitations/implications

Results have implications for the design of loyalty programs and payment options in different markets. Results have also implications for public policy regarding concerns about increasing private debt in emerging countries.

Originality/value

This paper suggests a cost-benefit framework where customers in emerging countries perceive benefits of loyalty cards and credit options higher, while they are willing to bear higher costs. As a result, effects of product category characteristics on usage that are observable in developed markets do not exist in emerging markets.

Citation

Zielke, S. and Komor, M. (2020), "Loyalty cards, credit options and economic market development", International Journal of Retail & Distribution Management, Vol. 48 No. 6, pp. 591-607. https://doi.org/10.1108/IJRDM-05-2019-0157