#NRF2020: How Target simplified its loyalty scheme and gained 50m users

Target has managed to grow one of the largest loyalty programmes in America, in a mere two months. The retailer has 50 million nationwide users of its Target Circle loyalty programme which only fully launched in October 2019 after being in beta testing for 18 months. But in order to get to that number in a few short months, the retailer had to take a hard look at its multiple existing loyalty offerings and rethink the way it rewarded its customers.

This time last year, the retailer had a mobile app, a store card providing 5% cashback and its Cartwheel social community app which features digital coupons. Target was also in the process of trialling a loyalty points card called Red Perks. But, unsurprisingly, it found these multiple reward schemes confused customers.

“We made it awfully hard on [customers] to navigate through everything we were trying to do,” said Rick Gomez, chief marketing and digital officer at Target, who pointed out that confused customers is very damaging to any brand.

In recent years, Target has grown to become one of the biggest and most-loved retailers in America, which even back during the recession couldn’t open stores fast enough. But on completing customer research on the future of loyalty, one customer’s comments stuck with Gomez: “Sometimes it feels like I love Target more than Target loves me”.

“This confusion to our guests and our team didn’t allow us to offer the connecting experiences that makes it clear that Target loves them back and prevented us to unlock the power of personalisation, which is key to a winning marketing strategy.”

Gomez added: “It was so important for us to get loyalty right and try and show we appreciate them.”

Despite being in the middle of trialling Red Perks, Gomez and his team deduced that a points-based system was “too limiting and too transactional”, so they made the “tough decision” to go back to the drawing board. The retailer soon came up with a new loyalty app which combined the best parts of all its existing reward programmes – Target Circle – which was tested in Dallas a couple of years ago.

The Target Circle loyalty scheme saw customers receive 1% of their total basket back to spend on their next shop. The new mobile app also combined its existing store cards cashback programme, as well as Cartwell, which continued to support Target’s commitment to giving back to local communities, by encouraging guests to vote for local charities to support. Since October 2019, $2.4 million has been donated to 900 organisations.

“The beauty is in the simplicity – it’s free, there’s no membership fee or complicated process,” said Gomez. Customers simply enter a phone number online or at an in-store POS to register.

It now has 50 million active uses and over the recent Christmas peak period 40% of sales were connected to Target Circle.

“There’s clear tangible benefits, and no strings attached,” said Gomez when describing the app’s success. “We listened to our guests – [and asked] what do they want – not what is best for Target?”