Macy’s Inc. is rolling out a new loyalty program that may encourage more online shopping and increase purchase frequency.
Macy’s, No. 6 in the Internet Retailer 2017 Top 500, will launch a new rewards program for shoppers who have its Macy’s credit card next week. Called Star Rewards, the program has three levels a shopper can reach based on her annual spend at Macy’s:
- Silver, for shoppers who spend $499 or less on the card.
- Gold, for shoppers who spend $500-$1,199.
- Platinum, for shoppers who spend $1,200 or more.
Star Rewards launches on Monday.
One of the main carrots Macy’s is offering gold and platinum members card holders is free shipping. Shoppers who spend at least $500 on their Macy’s card per year—thus reaching the gold level—can receive free shipping on all online orders with no minimum purchase. Macy’s free-shipping threshold for online orders is $99 for everyone else.
Dave Andreadakis, chief strategy officer at loyalty marketing agency Kobie Marketing, says the free shipping perk could be key to driving more online sales.
“On one hand, the free shipping perk for mid-tier and top-tier members was a necessity in order to stay competitive and could certainly incentivize more online ordering, especially with the added convenience of in-store merchandise returns,” he says. “That being said, there’s more that goes into driving digital sales than a loyalty program alone. A loyalty program is more likely to impact the frequency and value of purchases than the channel of those purchases.”
Macy’s, which last month named veteran e-commerce executive Hal Lawton as its new president, has posted 10 consecutive quarters of year-over-year net sales declines dating back to the third quarter of 2014. Online sales, however, have increased by double digits year over year for the past 32 consecutive quarters, according to chief financial officer Karen Hoguet.
Macy’s isn’t alone in announcing a new loyalty program. This week, apparel brand American Eagle (No. 67) launched a new digitally focused loyalty program called AEO Connected. The program is free to all shoppers and does not require a credit card membership. Points can be earned when shopping through American Eagle’s stores, online or on its mobile app.