Target 2003 Annual Report Download - page 13

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While our proprietary credit cards at Target, Mervyn’s
and Marshall Field’s create an important affinity with our
guests and contribute meaningfully to our financial
performance, other products and services are increasingly
visible and valuable. Gift cards, for example, represent
another form of branded payment that has experienced
rapid growth in recent years. Since our first GiftCard was
issued in 1999, GiftCards have enjoyed a substantial double-
digit dollar increase every year. And, by applying the same
differentiated and innovative approach to our GiftCards
as to our merchandising and marketing, Target is among
the largest issuers of gift cards in the world.
Target Visa
The Target Visa exemplifies both our key strategic objec-
tives and our core operating principles.
Target Visa guests are more devoted Target shoppers
and routinely spend 50 to 60 percent more at Target
stores than other Target guests. This loyalty affirms our
belief that the utility of the Target Visa card, in conjunction
with programs such as Take Charge of Education (TCOE)
and Target Rewards, delivers meaningful, incremental
value and strengthens our bond with our guests.
This bond is reinforced through the efforts of our own
credit card team members. By maintaining direct access
to our guests, we are able to acquire valuable information
that helps us to more effectively serve their needs.
Furthermore, our considerable experience in managing
credit card operations over many decades has contributed
to an operating efficiency consistent with industry leaders.
From a financial perspective, Target Visa demonstrates
our adherence to financial discipline and also clearly
satisfies our primary objectives. Since the card was first
introduced, our net yield on the Visa portfolio has steadily
improved, and in 2003 our profit contribution from this
portfolio was substantially above its prior year level.
Growing Fast, Growing Smart
Our credit card operations have achieved tremendous
results. Yet, for all of our success, we’re not standing still.
We continue to pursue initiatives that expand our horizon
beyond the traditional credit card business and leverage
our scale and technology to generate profitable growth
and improve our guests’ experience. For example, our
guest contact centers are staffed by specialists who handle
all guest inquiries and correspondence from Target stores
guest relations, our bridal and baby registries, Take Charge
of Education and our credit card operations. In addition,
by recognizing the parallels between credit and check
payment models and applying our core credit card
disciplines and tools to our in-store check authorizations,
we have significantly reduced our returned check expenses.
Vision and discipline continue to be the cornerstones
of our approach as we propel our business forward. And
as we grow, we remain firmly committed to our mission:
to deliver financial products and services that drive sales,
deepen guest relationships and sustain outstanding
profitability.
Store-Brand Credit Cards
Our store-brand credit cards
build guest loyalty and
reinforce affinity with our
brand through unique
Rewards programs, special
offers and customized
marketing. They also generate
a strong financial return.
GiftCards Through innovative designs that reinforce
our brand image and satisfy a wide range of gift-giving
occasions, GiftCards are an important way for us to
delight our guests and drive incremental sales and traffic
in our stores. According to a recent survey, more than
90 percent of guests who come to a Target store to
redeem a GiftCard spend more than the value of the card.
GIFTCARD