Dive Brief:
- Target is rolling out its free loyalty program nationwide on Oct. 6, the mass merchant said in a press release.
- The program, Target Circle, includes 1% back on purchases as well as personalized deals and early access to sales. It also gives members a chance to vote on Target's charitable initiatives.
- Target said more than 2 million customers had enrolled in Target Circle to date. The mass merchant began testing the free loyalty program in March 2018 and expanded it earlier this year to another handful of cities.
Dive Insight:
Target is going nationwide with its free loyalty program as holiday shopping ramps up. It's good timing for the retailer, which has seen a spike in customer traffic already in the run-up to the fourth quarter and is poised to see another spike during the holiday sales period.
Extending its rewards beyond its Target RedCard credit card holders lets the retailer capture data and, potentially, loyalty of a much broader swath of customers. Those two million members of Target Circle during its test runs — in Dallas-Fort Worth; Charlotte, North Carolina; Denver; Kansas City, Kansas; Indianapolis and Phoenix — rang up 14 million transactions, the retailer said.
Target joins numerous other retailers in expanding or revamping loyalty programs in recent years. Among them: Macy's left Plenti and introduced a new loyalty program that doesn't require a store card; Kohl's combined three loyalty programs into one based on Kohl's Cash; J. Crew also launched a card-free program; as did Nordstrom, with its Nordy Club.
All those perks for customers come with email addresses, phone numbers and purchase history records for retailers, which can use that data to personalize their marketing strategies. When all goes well, they also create connections with customers and keep them coming back. But when things go wrong, retailers are often left with frustrated customers.
Shannon Warner, vice president in Capgemini Invent's North American retail practice, told Retail Dive earlier this year that the shift way from store-branded cards is "probably a 20-year trend," as retailers have sold of their card portfolios to banks and, with them, much of the profits from credit cards.
