Target testing Cartwheel app rewards program

Dive Brief:

Target is testing another expansion of its Cartwheel app, rolling out a points-based rewards system it’s calling “Perks” in the San Diego, Denver, Houston and St. Louis markets, the San Diego Union Tribune reports.
Cartwheel Perks awards customers 10 points for every dollar spent at Target stores, excluding CVS pharmacy purchases and gift cards, notes the St. Louis Post-Dispatch. Shoppers who collect 5,000 points are eligible to select from 25 rewards ranging in value from $10 to $20, including sunglasses, laundry detergent and athletic apparel.
Target is also in the midst of testing another rewards program, called REDperks, for its REDcard holders. That pilot, launched in February 2015, is relegated to one metro area in North Carolina.

Dive Insight:

Cartwheel has been well received by customers and analysts since its debut three years ago, and has been downloaded more than 27 million times. Cities chosen for this latest pilot were picked because of the overall high use rate of the app by customers there, Target told the San Diego Union Tribune. The retailer also said that while Cartwheel and Perks are only available to in-store shoppers, the retailer is considering linking online purchases.

Overall, Target says it’s working on appealing to customers attracted to coupon and deals-based savings as well as to those attracted to getting deals after accruing rewards points. RSR Research analyst Nikki Baird highlighted Cartwheel as an example of a retailer finally figuring out how to provide the level of personalization and glean the kind of data that have been limited to digital sales.

“I think digital is teaching retailers how to be more targeted and personalized, but they still have to cross the chasm into stores,” she said in an email to Retail Dive earlier this year. “Target’s Cartwheel is getting them closer, as an example.”

Target last month reported $16.17 billion in second quarter revenue: Same-store sales decreased 1.1%, the retailer's first negative same-store sales measure since the first quarter of 2014. E-commerce sales rose 16% over last quarter, below the 23% increase in the first quarter and the 34% increase during the last quarter of last year.

Target is feeling the crunch of a “difficult retail environment," according to CEO Brian Cornell, but the company plans to continue focusing on its signature categories as well as new store formats and its in-store experience.