Target Corp. is expanding its new loyalty program to more markets and giving it a new name.
The program, which launched in March 2018 in the Dallas-Fort Worth, Texas region under the name Target Red, is now called Target Circle. The new markets for the program are: Indianapolis; Phoenix; Denver; Charlotte, North Carolina; Kansas City, Missouri; and Kansas City, Kansas.
The program offers shoppers 1% back on their next purchase, which means Target Circle members can use their accrued earnings on a future purchase, the retailer says. Members also receive a 50% discount on a first-year membership for same-day delivery with Shipt, as well as free next-day delivery with Target Restock. Other perks include personalized savings, a birthday reward and the ability to vote on Target’s local community giving initiatives, according to the retailer. These perks will be served to Target Circle members via the Target mobile app, email and when the member visits Target.com.
Target Circle is a rewards program for shoppers who do not want to sign up for Target’s REDCard, a credit and debit card that gives shoppers 5% back on every purchase. While Target REDCard members can sign up for Target Circle, they will not get an additional 1% back on top of the 5% back they receive, but will be able to benefit from the program’s other perks. Target is No. 17 in the Internet Retailer Top 1000.
Shoppers in the additional markets, beginning Feb. 19, can sign up at Target.com/Circle, through the Target app or by providing their phone number when they check out at the store.
“The most critical element of a successful loyalty program is to strike a balance between transactional and emotional benefits,” says Tom Caporaso, CEO of loyalty program platform Clarus Commerce. “Target has clearly recognized this and created Target Circle to fit the bill. For the Circle program to stick, Target will need to invest in significant training for its in-store associates. Employees can be a retailer’s biggest brand loyalty advocate.”
A few other retailers have recently revamped their loyalty programs. Apparel retailer J. Crew Group Inc. (No. 53) in August added free shipping with no purchase threshold to its free loyalty program. And for every 200 points accumulated, or $200 spent, a customer earns a $5 reward to redeem on future purchases. Previously, the apparel retailer granted perks only to J. Crew credit cardholders.
Similarly, Macy’s Inc. (No. 6) in May opened its Star Rewards program—previously only offered to those with a Macy’s credit card—to all consumers, regardless of how they pay for their products. With every 1,000 points accumulated, they receive a $10 Star Money reward. However, its free shipping perk with no minimum purchase is still only available for Macy’s cardholders.
Additionally, cosmetics retailer Sephora’s Beauty Insider loyalty program updated its program to benefit consumers who are already in the program. Sephora, owned by LVMH (No. 131), has three tiers in its loyalty program, each with increasing benefits. The higher the level, the more free products shoppers receive, the more reward options shoppers have to choose from and the more points shoppers earn per dollar. Although it already had birthday perks, the beauty retailer is adding more tiers to its birthday rewards to make it more personalized for every shopper.
“Points and other transactional benefits are still important in a loyalty program because they make people feel smart about shopping, but this certainly isn’t novel—almost all retailers offer this type of program,” Caporaso says. “By understanding everything about their consumers, including expectations, emotions, and behavior, retailers can offer them exclusive benefits that build a deeper, more meaningful connection to the brand and keep them engaged over time.”