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Loyalty trends and best practices

Loyalty Makeover: JCPenney

by Zach Woith
March 03, 2014
Loyalty Makeover: JCPenney

In this installment, we look at the loyalty program at JCPenney, the $12 billion department store chain with 1,100 stores and $1 billion in online sales. 500friends Loyalty Makeovers offer suggestions to retail brands for making the most of their loyalty initiatives. What JCP Rewards looks like today: JCP Rewards members accrue one point for every dollar they spend. For every 100 points they earn in a calendar month, they receive a $10 coupon towards future purchases (up to a maximum of ten $10 coupons per month). At the end of every month, point balances reset to zero. First impressions: With a 2013 operating loss of over $1.2 billion, investing in customer retention and loyalty may seem like a luxury for JCPenney. However, to really get back on track, the embattled department store chain will have to prop up its gross margins, which fell to 29.4% in 2013 (typical department stores gross margins hover in the mid- to up... Read more

Loyalty Makeover: Ace Hardware

by Arif Damji
February 28, 2014
Loyalty Makeover: Ace Hardware

In this installment, we look at the loyalty program at Ace Hardware, the $3 billion hardware store co-operative with 4,700 locations. Loyalty Makeover offers suggestions to retail brands for making the most of their loyalty initiatives. What Ace Hardware's loyalty program looks like today: Known as Ace Rewards, the Ace Hardware loyalty program rewards members with in-store discounts ("Instant Savings ") and a points currency for all purchases. Members collect 10 points for each dollar spent and get 1,000 points for enrolling. Once they reach 2,500 points, they receive a coupon for $5 back on their next purchase, equating to a 2% funding rate. The private label Ace Rewards Visa Card allows members to augment their Ace Rewards point balances with up to 10 points per dollar spent. First impressions: Ace Rewards is unusual among retail loyalty programs in that its benefits include both a preferential member price as w... Read more

Loyalty Makeover: Staples Rewards

by Zach Woith
February 25, 2014
Loyalty Makeover: Staples Rewards

In this installment of Loyalty Makeover, we look at the loyalty program at Staples, the $24 billion office supply retailer with more than 2,000 stores and over $10 billion in online sales. Loyalty Makeover offers suggestions to retail brands for making the most of their loyalty initiatives. What Staples Rewards looks like today: The core value proposition of Staples Rewards is 5% back on purchases. Customers receive the 5% reward once they hit a minimum quarterly spending threshold; if they fail to hit the quarterly threshold, they stop receiving the reward. Other notable elements of the program include 3 status tiers, free shipping (with no minimum), exclusive offers, and benefits tied to the ink category, which has elevated significance to both Staples and its customers. First impressions: In its most recent earnings call (on Q3 2013 results), Staples said its revenues and margins had dipped slightly (2% and 0.... Read more

Loyalty Makeover: AutoZone

by Zach Woith
February 20, 2014
Loyalty Makeover: AutoZone

n this installment of Loyalty Makeover, we look at the rewards program at AutoZone, the $9.1 billion automotive parts retailer with more than 5,000 stores. Loyalty Makeover suggests ways for retail brands to make the most of their loyalty initiatives. What AutoZone Rewards look like today: Members sign up for AutoZone Rewards at a physical store, where they receive a Rewards Card linked to their account. For each purchase of $20 or more, online or in-store, members earn one "credit." When members accumulate five credits, they receive a $20 voucher for in-store redemption. The expiration period for credits varies by state, however in most states members must earn their 5 credits within a 6-month period and redeem vouchers within 3 months. First impressions: AutoZone's financial performance has been fantastic over the last 12 months, with its stock jumping more than 42%. That said, the company could be doing even better... Read more

Loyalty Makeover: Carters and OshKosh

by Ashley Bienvenu
February 12, 2014
Loyalty Makeover: Carters and OshKosh

Loyalty Makeover suggests ways for retail brands to make the most of their loyalty initiatives. In this installment, we look at the rewards programs at Carter's and sibling brand OshKosh. With $2.4 billion in annual sales and 18,000 stores, Carter's has been selling children's clothing since 1865. What Carter's and B'Gosh Rewards look like today: The Carter's and OshKosh brands, which belong to the same company, run separate but identical rewards programs. For every $50 spent in-store with each brand, shoppers earn a $10 voucher towards future purchases of that brand. Rewards become valid one day after a purchase, and can be redeemed in-store upon presentation of a receipt. First impressions: Carter's brands' rewards are simple and straightforward, making their value propositions easy to understand. Customers know that for every $50 spent in a single purchase, they will earn a $10 voucher towards their next p... Read more

Successfully Driving Loyalty at U.S. Auto Parts (IR 100 Retailer)

by Zach Woith
February 03, 2014
Successfully Driving Loyalty at U.S. Auto Parts (IR 100 Retailer)

Leaders in Loyalty shares the insights and experiences of executives who run loyalty programs. In this edition, U.S. Auto Parts VP of Marketing Houman Akhavan discusses selling loyalty to colleagues and structuring rewards. How did you rally support at U.S. Auto Parts for your loyalty program? Akhavan: Acquiring new customers is expensive. I positioned loyalty as a way to increase repeat purchase, and that made a lot of sense to our team. In an industry as competitive as ours, where only around 20% of customers make a repeat purchase within 12 months, loyalty incentives give people a reason to bring us their next purchase. Another benefit is channel diversification. With Google becoming such a dominant source of shoppers, investing in our customers as a new way to grow the business was appealing. How has your loyalty program paid off for the business? Akhavan: One way is that it lets ... Read more

The Healthy Benefits of Kate Somervilles Loyalty Program

by Zach Woith
January 27, 2014
The Healthy Benefits of Kate Somervilles Loyalty Program

Leaders in Loyalty shares the insights and experiences of executives who run loyalty programs. In this installment, Matt Bunn, Director of Digital Marketing at Kate Somerville, talks about the many benefits of the skincare brand's loyalty strategy. Why did you launch the Ultimate Kate Rewards loyalty program at Kate Somerville? Our primary goals are email acquisition, customer retention and increased visitor engagement. Skin care and beauty is a competitive landscape, and most of our retail partners — such as Nordstrom and Sephora — offer their own customer loyalty programs. Ultimate Kate Rewards puts our online presence on a level playing field. Also, because we utilize our program to communicate with our most loyal customers, it elevates the overall brand relationship. Your loyalty program rewards not only purchases, but other activities as well. Can you explain how that drives ROI? We r... Read more

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