Target is expanding a new loyalty program that offers personalized benefits to members, CNBC reports. Dubbed “Target Circle,” the program has been piloting in Dallas but will become available in Charlotte, Denver, Indianapolis, Kansas City, and Phoenix on February 19.
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The program is free to join and offers perks like 1% back on Target purchases, a birthday reward, shipping benefits, and a chance to have a say about which local nonprofits Target should donate to.
The value that Target Circle offers seems to be geared toward helping entice customers to engage more deeply and regularly with Target. For starters, the program is free for customers to join, contrary to Amazon Prime, for example, which costs $119 per year. This means that, beyond sharing information with the retailer, there’s virtually no obstacle to joining. Additionally, besides the generally useful 1% back on Target purchases, the benefits Target Circle offers fall into two main categories:
- Benefits that make the program feel more personalized for members, amplifying loyalty. Target says that the rewards given to customers on their birthdays will be customized based on their shopping history, potentially helping the reward feel like a thoughtful gift from the retailer. Also, allowing customers to choose where Target directs funds for nonprofits may help Target Circle members feel like they have a say in the way the company impacts their communities. Making Target Circle feel more personal and targeted could give Target a leg up with consumers, as 79% only consider brands that show they care and understand and 56% are loyal to brands that understand their priorities and preferences, according to Wantedness.
- Perks that lower barriers to using some of Target’s unique delivery services, driving repeat business. Circle members get free next-day delivery of consumer packaged goods (CPGs) and essentials via Target Restock (which usually costs $2.99 per order), as well as the option to sign up for a one-year membership to Target’s same-day delivery service, Shipt, for $50 (a 50% discount). Restock is one of the fastest CPG delivery options available, so free access via a free loyalty program is a significant benefit. Furthermore, access to Shipt for a year for $50 could encourage Circle members to give it a try because of its price advantage compared with similar services like Instacart ($99 per year). If customers learn to depend on these services, they will make more consistent purchases with Target as opposed to its competitors.
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Source: Business Insider