Count Target among many merchants that are trying new or upgraded customer loyalty programs. As the following Retail TouchPoints article reports, Target Circle is being tested in five U.S. markets.
Target will expand its Target Circle loyalty program pilot from Dallas to five additional markets on Feb. 19. Stores in Charlotte, N.C., Denver, Indianapolis, Kansas City, Mo. and Phoenix will all offer the new perk system, which is open to all loyalty members.
While the new program includes 1% back on all Target purchases and birthday rewards, its standout feature is personalization: certain rewards will be customized based on each customer’s shopping behavior. Target will determine which category is most relevant to the shopper, with possibilities including clothes, a DVD or groceries.
Target Circle members receive free next-day delivery through the Restock service, and 50% off a one-year Shipt membership. The new program also includes a charitable component that lets shoppers choose which local nonprofits Target should donate toward. The retailer has already donated $250,000 to approximately 50 different organizations in the Dallas area.
Retailers have been unveiling a wide range of loyalty perks to differentiate their offerings from the competition. One of the most unique approaches is Domino’s new Points for Pies program, which rewards customers for eating a pizza from anywhere — including competitors. The app lets users simply scan the pizza they’re eating, and AI determines whether it’s a slice or a full pie.
Target’s in-house credit and debit cards offer 5 percent cash back to shoppers. This is not unusual as more merchants and credit card issuers are turning to cash back rewards, especially as popular airline and hotel loyalty programs are suffering from points devaluation. Now, some loyalty programs are making it all about the customer experience, where merchants offer activities or events based upon a shopper’s interests and spending levels. It’s just another way to bolster customer retention and maintain long-term relationships in a highly competitive market.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group