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.
Unique Perks Attract More Loyalty Members
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.
One popular point of differentiation is establishing tiers, so that shoppers who spend certain amounts of money become eligible for bigger rewards. Sally Beauty added tiers to its existing reward program in October 2018, while Sephora enhanced its existing tier-based system with more perks for higher-level members in January 2019.
Nordstrom is expanding on the tiered loyalty concept with The Nordy Club, which includes priority access to new product launches and events in addition to the traditional points structure. The highest-tier members also can attend exclusive invite-only events and gain access to in-home stylists.
A successful loyalty program must stand out from the crowd, as 75% of shoppers actively earn and redeem rewards in just three or fewer programs, according to Kobie Marketing. The firm outlined four key steps for retailers interested in boosting long-term interest in loyalty programs:
- Analyze generational preferences;
- Consider a points-based program;
- Prioritize convenience and clear value; and
- Clearly communicate the steps to earning awards.