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AmEx (AXP) Provides a Bouquet of Offers for Its Card Members

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In an effort to kick of the spending on its branded cards this year, American Express Co. (AXP - Free Report) has come out with a slew of offers aimed at U.S. consumers, small businesses, and co-brand card members and merchants.
These offers are mainly provided for online shopping, small business needs, local travel and more. The areas gained much momentum at the backdrop of COVID-19 breakout and therefore, the company is targeting to add more value to its card members and merchants to sustain the uptrend.

For American Express, small and medium-sized enterprises (SMEs) and consumers account for nearly 75% of the spending on its cards. The company via a host of offers is aiming to mitigate customer attrition and retain the existing ones as well as attract new traffic.

After a painful 2020, which saw the overall consumer spending plummet due to the pandemic, American Express is hopeful of a revival in business volumes in 2021 with a bouquet of exciting offers on its cards to be rolled out shortly.

The ramped-up benefits and offers this year follow the company’s concerted efforts made in 2020 to swiftly cushion its Card Members against the vagaries of the pandemic by delivering relevant value-added services. As a result, the company saw an incredible and a much deeper engagement with its customers through these offers that drove loyalty and lowered migration levels than what was achieved in 2019 across its Card Member base.

American Express is once again trying to take advantage of the improving spending patterns by persuading its members to spend more via sweetening the pot.

The company kicked off 2021 by providing online shopping perks for consumer platinum card members. This is likely to lure in higher traffic to online shopping. Per the Amex Trendex survey, 79% consumers have spent significantly more time on Internet purchases in the past 12 months than ever before while 53% shoppers indicate that they plan to splurge more on the goods available online this year than in the past.

American Express supports small business, which also forms part of its important customer base. Hence, to favor these small-scale entities, the company doled out back-to-business offers for Small Business Card Members.

In 2020, many businesses invested in technology and remote-working capabilities. This year, a majority (59%) of small- and mid-size businesses expect technology to be their top business expense followed by office supplies (36%) and media & advertising (30%), according to an Amex Trendex poll of business owners and financial decision-makers. The company thus provided rewards on purchases in back-to-business categories, such as wireless, shipping, advertising, gas and office supplies.

American Express is also offering multiple discounts and services to U.S. small merchants as they continue investing in their e-commerce and digital capabilities.

As Americans are taking up nearby travel, American Express is dispensing offers on hotels, flights and car rental for trips closer to homes. Going by the Amex Trendex findings, 68% respondents expect to take a trip in 2021 that they couldn’t in 2020 while 28% consumers in December reported that they are planning a trip in the next 60 days.

Coming up from American Express and its Cobrand partners are new limited-time offers for the existing Consumer and Business Delta SkyMiles, Hilton Honors and Marriott Bonvoy Card Members with details to be updated soon. This new value builds on the Card Member’s existing benefits as well as the suite of relevant and rich Amex Offers available through the Amex mobile app or online account.

We believe, these enhanced benefits and offers will drive business volumes for the company in 2021. In the past six months, the stock has gained 32.8% against the industry’s decline of 5.6%.

Other players in the same space including Mastercard Inc. (MA - Free Report) , Visa Inc. (V - Free Report) and Discover Financial Services (DFS - Free Report) have also rallied 16.6%, 9.6% and 100.4%, respectively, over the same time frame.

American Express currently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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