Macy’s counts on new rewards program
Macy’s hopes a new, simplified customer loyalty program will help generate higher sales in its stores and on macys.com.
Yesterday, the department store announced it would launch a new, reinvented Star Rewards program on Oct. 2. The program is designed to improve the customer experience by offering greater rewards in the way of discounts and personalized service based on purchases.
Customers will automatically be placed into one of three tiers — Platinum, Gold or Silver —based on their annual purchases from Macy’s. As Macy’s customers move up to higher levels, they receive more benefits, gaining perks like free shipping and additional discounts on purchases. Macy’s has announced that it will continue to enhance the program next year with “more experiential benefits” in the form of “experiences and rewards elements” unique to the retailer.
“Loyalty is a foundational element of our North Star Strategy, and stronger relationships increase the lifetime value of our customers,” said Jeff Gennette, Macy’s, Inc. chief executive officer, in a statement. “We are providing what matters most to her — an enhanced experience both in store and online, edited and elevated products, compelling value and an excellent loyalty offering.”
The new program is designed to reward the chain’s top customers and Macy’s is counting on the value of those rewards to generate more purchases. The top 10 percent of Macy’s customers represent roughly half the chain’s revenues.
Speaking on the company’s second quarter earnings call last month, Mr. Gennette said the new program tested very well in focus groups. The new program, he added, will complement Macy’s simplified approach to promotions, helping to drive sales during the critical Christmas selling season and beyond. Mr. Gennette said the chain was focused on providing a “compelling” experience in stores and online with the “right values and the right content” for its customers.
“It is positive that a confusing program with a never-ending array of deals and offers has been simplified,” Neil Saunders, managing director at GlobalData Retail and a RetailWire BrainTrust panelist, said in an interview with CNBC.
“As part of a bigger program of changes, it has a chance to help Macy’s gain some ground,” Mr. Saunders said.
- Macy’s Reinvents Loyalty with New Star Rewards – Macy’s, Inc.
- Macy’s Q2 2017 Results (Earnings Call Transcript) – Seeking Alpha
- Macy’s reinvents its loyalty program to win more shoppers – CNBC
DISCUSSION QUESTIONS: Will the reinvention of Macy’s Star Rewards program along with other changes being made by the chain in promotions and merchandise help turn its business around? What do you see as the remaining challenges Macy’s must address to put itself back on a positive growth track?