Nordstrom revamps loyalty with new 'Nordy Club'

Dive Brief:

Nordstrom on Thursday announced a revamped loyalty program dubbed The Nordy Club set to launch next month. Through the program, members can earn rewards more quickly, and even non-cardholders enjoy substantial perks.
The new program features an opportunity to maintain a 'Nordy Portrait,' including rewards status and points balance, whether or when points can be redeemed, and the ability to schedule their Personal Double Points Days, which can be accessed through the retailer's mobile app.
The Nordy Club also has four levels based on members' spending each year, with more and better benefits corresponding to accelerating spending, according to a company press release.

Dive Insight:

Nordstrom already enjoys a robust loyalty program, which has traditionally been boosted by the retailer's anniversary sale. The department store boasts more than 10 million loyalty customers as of last month, an almost 20% increase year over year, co-president James Nordstrom told analysts in August, according to a transcript from Seeking Alpha.

"We've seen significant growth in our program over the last few years and our 10+ million active members spend four times more and shop with us three times more than non-members," Nordstrom Chief Marketing Officer Scott Meden said in a statement last week.

The retailer is reserving its best perks for its credit card holders, but, as Macy's and Target have also done in recent months, Nordstrom has also boosted rewards for loyalty members without a card. Once the new program is launched in October, Nordstrom Credit Card members will earn three points per dollar in purchases, a 50% increase from its previous terms, and members paying with cash or a non-Nordstrom card receive one point for every dollar spent.

Amazon and warehouse retailers like Costco, Sam's Club and BJ's lock in their shopper bases with up-front membership fees. Other retailers, from mass merchants and department stores to specialty retailers, have relied on credit cards to keep customers close. Traditionally those card holders enjoy perks unavailable to anyone else. Most (62%) consumers have a store card in their wallets, and 30% have two or more, according to a Ipsos Retail Survey last year from Vyze. And shoppers really do show loyalty to the retailers issuing those cards — 40% say they are more likely to shop at that retailer because of it. Indeed, store cards are so effective that Amazon, Costco and others offer them and their benefits in addition to memberships.

But exclusivity risks alienating shoppers that don't want another card in their wallet, and younger shoppers are less likely than their elders to use credit. Millennials are more likely to use the credit cards to build up their credit rather than day-to-day living, Peter Caparso, Checkout.com's president of North America, told Retail Dive earlier this year. "Growing up during the Great Recession has given them, definitely it seems to me, a reluctance."

In these new structures, by contrast, cardholders do enjoy greater benefits, but the un-carded tier gets some too, and bring more shoppers onto the retailers' mailing lists — and databases.