Photo: RetailWire
Macy’s drops out of the Plenti multi-merchant loyalty program
Macy’s, one of the original roster of brand partners in American Express’ Plenti, multi-merchant reward platform, has decided to leave.
The department store retailer is not the first to end its involvement with Penti. It follows Alamo, Expedia, Hulu and others, according to a Cincinnati Business Courier report.
While Macy’s has not provided a reason for its decision, the department store has put great stock in the relaunch of its Star Rewards program. When the relaunch went live last October, Macy’s said it was designed to improve the customer experience by first simplifying the program and then offering greater rewards in the form of discounts and personalized services.
The new program consists of three tiers — Silver, Gold and Platinum — based on customers’ annual purchases from the retailer. Customers who move up in levels gain more benefits such as free shipping on online orders and additional discounts on purchases. The retailer has said it will add “more experiential benefits” unique to its business this year.
When AT&T pulled out of the Plenti program last year, American Express acknowledged that some participants were focusing more on their own rewards program. In October, the company issued a statement that it was in confidential discussions with remaining members about the program’s future. Current partners Plenti include Chili’s, Exxon Mobil, Rite Aid and Southeaster Grocers (BI-LO, Harvey’s and Winn-Dixie).
Further signs that Plenti may be in trouble, according to The Points Guy site, came when American Express announced it is discontinuing its Plenti co-branded card beginning on Feb. 16. It has also eliminated Plenti from its transfer rewards program.
- Macy’s dropping loyalty program used by other national retailers – Cincinnati Business Courier
- Macy’s counts on new rewards program – RetailWire
- Retailer coalition makes for stronger loyalty program – RetailWire
- Amex is Removing Plenti as Membershio Rewards Partner in February 2018 – The Points Guy
- American Express mulls Plenti’s future after retailer loss – Payment Source
Discussion Questions
DISCUSSION QUESTIONS: Is Macy’s making the correct strategic move to exit the American Express Plenti program and concentrate on its own Star Rewards? Do you see an opportunity for a multi-merchant loyalty programs to succeed despite Plenti’s apparent struggles?
Poll
BrainTrust
Neil Saunders
Managing Director, GlobalData
Anne Howe
Principal, Anne Howe Associates
It’s a smart move by Macy’s to concentrate on their own loyalty program. Clearly the Plenti program wasn’t delivering the results expected, so Macy’s terminated. There is such a morass of loyalty programs, I’m not bullish on multi-merchant loyalty programs. And while there is a place for multi-merchant programs, I think major retailers are better to focus on their own programs.
Macy’s is big enough to have its own loyalty and rewards program; it does not need to piggyback on a third-party scheme.
Bringing this entirely in-house will give Macy’s much more control over how the scheme is run, what rewards are offered and how it is promoted. As the company tries to rebuild, that can only be a good thing.
Early signs from the Star Rewards revamp are encouraging. The emphasis on rewarding loyalty and spend is far better than the previous focus on confusing deals and offers, while tiered rewards levels are persuading customers to spend more. In other words, Macy’s is now using its scheme more effectively to drive the behavior it wants to see from customers.
Good call by Macy’s, as it’s clear Plenti is in trouble. That said, I still believe Macy’s continues to train its shopper base to buy “on deal” versus offering a differentiated assortment and an experience worth paying full price for.
As a Macy’s shopper, I was confused by the purpose of the Plenti program and wasn’t sure of the benefits. I wasn’t necessarily interested in some of the other brands participating in the program, and it “muddied the waters” of the Star Rewards program. I’m sure that I wasn’t alone, and Macy’s is right to focus on revamping Star Rewards with more personalized, data-driven rewards for its best customers.
Any program that does not create a unique, and individual brand experience for the customer should be avoided. Buy gas and save on clothes at Macy’s. Short term this may drive some additional visits, but this commoditizes loyalty and erodes unique brand value. Macy’s is wise to choose a better path of creating a program that is unique and crafted for the target Macy’s customer.
Just because Plenti was not well implemented doesn’t entirely invalidate the potential for a universal loyalty currency that may be transferable among retailers.
Consider the shoppers’ perspective: Why should they enroll in and manage multiple, proprietary card or app programs to obtain what amounts to standard price benefits from each retailer they patronize? Each retailer’s program is a “walled garden” with its own rules, points, and benefits schemes. Most worthwhile rewards are out of reach except to the heaviest spenders. Most rewards points go un-redeemed.
Plenti has an interesting premise. Shoppers accumulate one currency by visiting multiple retailers, then redeem the points as cash equivalents at any of the participating retailers. Prior to this announcement, a frequent customer at Winn-Dixie, RiteAid and Chili’s, for example, might accrue enough points to redeem for a $10 credit at Macy’s or an Exxon/Mobil gas station.
From the retailer’s perspective, proprietary points programs also suffer from the “walled garden” problem — their data analysts can only access a slice of their shoppers’ consumption, which limits useful insights. Data from the Plenti collective has (had?) potential to assemble a more complete picture of shoppers’ total behavior that can be available to all participating retailers.
Ah, but the devil is surely in the details. A universal loyalty currency would require much more than one exclusive retailer for each category. Participating chains Southeast Grocers and Rite Aid don’t cover most geographies. And a universal program can’t comfortably coexist alongside a retailer’s walled-garden loyalty program. Why enroll if it only adds complexity?
So I think the rub here is not the concept itself, but the pathway to critical mass and commitment. Plenti, it appears, has lost its way.
“Customers who move up in levels gain more benefits such as free shipping on online orders.” A benefit many (most?) e-tailers offer from day one. But I digress; the world is suffering from “rewards” overload, with every Tom, Dick and Bank offering something or other. People want simplicity, and with practically every credit card offering cash back, and as I noted, many companies already having free delivery, it’s possible to get savings without performing advanced math. So I think that programs that don’t offer obvious and big advantages will have a hard time making it.
The key to a successful multi-merchant loyalty program is having enough merchants on board to make it worthwhile to the customer. With the success of Ebates and RetailMeNot loyalty sites, it is clear that customers will use a multi-merchant loyalty program if it’s easy to use and benefits their pocketbook.