2018 has been the year of revamped loyalty programs for department stores. In the past few months, a number of prominent brands announced changes to their loyalty programs.
Both Macy’s and Target seem to have taken note of recommendations from Gartner L2’s Digital IQ Index: Department Stores, as they introduced tender-neutral options. Macy’s has officially launched nationwide, while Target’s is still in the pilot stage. Meanwhile, DSW introduced a variety of unique options to its loyalty program like points for shoe donations and the ability to gift rewards to friends on your birthday, and Kohl’s is also reconsidering its loyalty program functionality with a pilot combining the three existing loyalty options into one more seamless experience.
Both Macy’s and DSW use email to call attention to their new and improved loyalty programs and benefits. Leading up to the launches, both retailers sent teaser emails to their customer bases about the upgrade. However, they saw vastly different results.
DSW framed its announcement as an exclusive insight with very few details, building the suspense by including a countdown. This paid off for the brand, with the campaign earning a 26% open rate. However, a similar email from Macy’s lacked the same sense of excitement and only got a 15% read rate.
Additionally, a closer look reveals that DSW took a more targeted approach. Upon the launch of the program, Macy’s sent out an email to 28 million people (90% of the brand’s sending list) announcing the arrival, resulting in a 16% read rate. However, DSW sent smaller volumes of emails to its pre-existing loyalty base, resulting in a more impressive 31% read rate.
Loyalty programs are becoming major drivers of purchase decisions. Consequently, retailers are hoping that a strong system of benefits, rewards, and status will lead to customers choosing to purchase from them rather than the growing and seemingly endless competition. One of the important executional factors about loyalty will be not just how retailers acquire customers into their loyalty programs, but also how they use the purchase and behavioral information they can glean from them. DSW in particular has done an excellent job leveraging existing knowledge to make its program top-of-mind for consumers.