Monday, September 9, 2019

Target rolls out Target Circle loyalty program ahead of Black Friday | Advertising Age

With less than three months to go before Thanksgiving, Target is hoping a revamped loyalty program will help secure its place as a winner this holiday shopping season. The retailer announced this week it is rolling out its Target Circle rewards program, which it has been testing in select cities, to all locations nationwide. The expansion will take place Oct. 6.

With no enrollment or membership cost, Target Circle is designed as a complement to the Minneapolis-based retailer’s existing RedCard credit card, according to Rick Gomez, executive VP and chief marketing and digital officer at Target. From their purchases, Target Circle members earn 1 percent back that they can use on future buys at the retailer. Members are also able to vote on community charity initiatives and receive personalized deals, like 5 percent discounts on birthdays and early access to sales. Target Circle will also incorporate the retailer’s Cartwheel deals section, which will be rebranding to Target Circle Offers.

“When we talked to our guests about Cartwheel, the name Cartwheel wasn’t critical but what was important was the personalized offers,” said Gomez, on a recent call with reporters.

Gomez said such perks help differentiate Target Circle from loyalty cards already in existence from rival retailers. Target has been testing the offering in six markets for the past 18 months. Though Gomez declined to provide specifics, he said the program has exceeded company expectations. During the 18-month test, more than two million consumers enrolled in the program and 14 million transactions occurred.

“Those who have signed up for the program are spending more at Target than those who are not enrolled, so we are seeing a benefit of building loyalty,” Gomez said.

Loyalty programs are becoming a valuable tool retailers are using to distinguish themselves and build better engagement with customers. According to the Annual Loyalty Report from Bond Brand Loyalty, a marketing and measurement company, some of the top loyalty programs, as voted on by members, last year included Amazon Prime, Nordstrom Nordy Club and Nike. The report stressed the opportunity for retailers to attract younger consumers in particular with such offerings—62 percent of Gen Z and 67 percent of millennials said they are influenced by loyalty programs.

To spread awareness of the new program, Target will be running a marketing campaign that includes TV, social, digital and in-store advertising. According to a spokeswoman, the campaign was created in-house by Target Creative.

Already, Target is one of retail’s bright spots. Last month, Target reported second quarter earnings that exceeded analyst expectations at a time when many other retailers are facing slowdowns in spending from tourists and tariff concerns. The company cited a 3.4 percent increase in sales at stores open more than a year, along with a 3.6 percent rise in sales to $18.2 billion., which tracks mobile spending, found that Target store visits are also on the rise in the current third quarter, particularly during the recent back-to-school season. Visits were 27.5 percent above Placer’s baseline during the peak week of August 12, Placer found. That compares to peak weeks in 2018 and 2017, when visits only rose 13.8 percent and 10.1 percent above the baseline, respectively.

The name Target Circle is also in keeping with Target’s orbit. Known for its bullseye logo, the company recently rebranded its media business to Roundel.


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