Will a new rewards program expand Target’s circle of guests?
A free rewards program pilot launched in the Dallas-Fort Worth market last April by Target appears to have been successful as the chain announced this week that it is rolling it out to guests (AKA customers) in Charlotte, Denver, Indianapolis, Kansas City and Phoenix on Feb. 19.
According to the retailer, hundreds of thousands of people have signed up for the program in North Texas and millions of dollars in transactions have been processed. The program, Target Circle, offers members one percent back on purchases that can be redeemed at a later visit as well as free next-day delivery on everyday staples with Restock. Customers can get half-off a first-year membership with Shipt’s same-day delivery service. The program also gives members a vote in deciding which local organizations Target supports. Around $250,000 has been donated in D-FW since the initial test began.
“A Target Run is much more than checking items off your list — it’s about discovery, inspiration and an effortlessly joyful shopping experience,” said Rick Gomez, executive vice president, chief marketing officer and chief digital officer, Target. “And we’re out to make that experience even more rewarding with Target Circle, offering guests more benefits and attracting new shoppers.”
The real benefit of the program from Target’s perspective is likely the customer data it will collect. The retailer already gets transactional data from holders of its private label REDcard, which offers five percent off all purchases. (Customers can belong to both REDcard and Circle program, but the former are not eligible for Circle’s one percent back offer.)
“We’re building deeper relationships with guests and serving up the most personalized way to shop Target yet, all while encouraging everyone to choose Target again and again,” said Mr. Gomez.
Target expands its rewards program coming off a strong 2018 holiday season in which it posted a same-store sales gain of 5.7 percent, on top of a 3.4 percent gain in 2017.
- We Just Expanded Target Circle—And Millions Of Guests Are In For An Even More Rewarding Target Run – Target Corporation
- Target Reports November/December Sales, Maintains Full-Year SAles and EPS Guidance – Target Corporation
- Retail loyalty programs are no longer in the cards – RetailWire
DISCUSSION QUESTIONS: Where do you see the greatest potential for Target to benefit from its Circle rewards program? Do you see any potential pitfalls?