Payments are the pathway to PFI status – it’s what we’re hearing all across the industry and what our members are signaling to us.
Earlier this month, digital payments saw a massive spike during the two-day shopping extravaganza known as Amazon Prime Day. Between July 15th and 16th, consumers bought more than 175 million items, a figure that surpasses sales for the most recent Black Friday and Cyber Monday combined. In addition to driving meaningful interchange revenue for credit unions, events like Amazon Prime Day represent a huge opportunity to help drive PFI status and build long-term member engagement.
Last year, for example, Goldenwest Credit Union was able to increase Prime Day transaction volume by over 127 percent by offering triple points for Amazon Prime Day purchases. But the even better outcome: Goldenwest saw more of their members set their Goldenwest card as their default payment method while logged into Amazon.
Goldenwest’s story highlights both the importance of payments in driving growth and the value of leveraging data analytics to spot hidden opportunities.
Here’s what the data from this year’s Amazon Prime Day tells us:
Prime Day Credit Transactions up Nearly 50 Percent
For the second year in a row, Prime Day transactions continued to surge. Looking at data inside the CO-OP credit portfolio, we saw nearly a 50 percent jump in the total dollar volume of Amazon Prime Day transactions compared to 2018.
In other words: for the credit unions whose cards members pulled out during the two-day event, Amazon Prime Day was a significant revenue-generator.
“Credit union issuers must take steps to engage the growing number of Amazon Prime members, as they represent a massive opportunity to secure top-of-digital-wallet status,” said Kaitlyn Summitt-Nelsen, Senior Portfolio Advisor and Card Marketing Strategist for CO-OP. “Credit unions owe it to their members to explain the benefits of selecting their card as the default on Amazon and other online retailers. Many of our partners are finding rewards and other promotions to be a great way to open that dialogue.”
Driving Default-Payment Status Through Custom Campaigns
For 2019 Amazon Prime Day, one of CO-OP’s credit union card issuers partnered with our SmartGrowth consulting team to offer a “Spend-and-Get campaign” that returned $10 cash back to the cardholder for every $100 spent on Amazon during the Prime Day event. Another offered 2-percent cash back on all online purchases throughout the month of July. A third credit union is offering to pay one lucky member’s entire Amazon purchase, every day during the month of July.
While Amazon Prime Day may be over, credit unions can leverage the data on where their members spent in order to create customized rewards strategies for future shopping events.
The most common purchases throughout Prime Day 2019 among credit union members were:
- Books – up 50 percent from 2018.
- Specialty retail stores – up 84 percent.
- Computer/network services – up a whopping 184 percent.
- Subscription merchants (which includes Prime membership sign-ups) – up 88 percent.
Looking Beyond Amazon Prime Day
It was also interesting to note that Amazon Prime Day had a residual impact on the sales of other major retailers, many of whom ran concurrent promotions in order to compete with Amazon. Credit transactions on Walmart.com, for example, were up more than 163 percent on July 15th compared to the previous day.
Whether this trend will take away some of the momentum from future Amazon Prime Day events remains to be seen; but for credit unions, understanding where your members are spending will be critically important as you begin planning for upcoming events like Black Friday and Cyber Monday.
In the meantime, look to CO-OP as your payments partner, helping you analyze and optimize your portfolio and build customized campaigns that will help you stay top-of-wallet during Amazon Prime Day and beyond. Contact your Client Business Executive or reach out to us at firstname.lastname@example.org to learn more SmartGrowth and our other payments solutions.
Discover how to optimize your credit card offering with our latest whitepaper: “How to Succeed in the Credit Card Business: A Blueprint for Credit Unions.”
The original article The Results are in: How Did Credit Unions Perform on Amazon Prime Day 2019? can be found on Insight Vault.