Merchant Rewards Programs – How Did They Perform this Holiday Season?

January 1, 2011 · 0 comments

I’m a member of many store rewards/loyalty programs and it was interesting to see how they approached their membership in the fourth quarter to try to drive sales.

RewardsRUs is the loyalty program for, as you can guess, ToysRUs and BabiesRUs.  They’ve been tinkering with their rewards program since its inception.  This fourth quarter, they focused on one simple message:  earn 10% in rewards for your purchases.   They sent members emails reminding them about the program, and they offered a few perks for RewardsRUs members including opening an hour early on certain days and members-only coupons for in-store use.  I give them a B for their holiday campaign.  While the perks weren’t that special, their consistent messaging of 10% rewards and fairly frequent emails to keep them top-of-mind were IMHO a solid effort.

ShopYourWay Rewards is the loyalty program for Sears, Kmart, and Lands End.  Their program benefits are more difficult to understand — purchases earn points that are redeemable for discounts on future purchases, but the number of points you earn is variable because they’re always doing some sort of promotion with extra points per dollar on purchases in certain categories.  1,000 points = $1.  QUICK, what’s “3x points” worth?  What about 5x?  Who likes doing the math?  SYWR does a decent job of communicating promotions with their members, and associates are pushing the program pretty heavily in stores, but if it’s not idiot-proof simple, it’s just not an effective program IMHO.  I give these guys a C on their holiday season promotions, but a D on the program overall.  It’s just too hard to understand, which makes it non-motivational.

RewardZone is Best Buy’s loyalty program.  Their fourth quarter promotions?  I didn’t know they had any.  I’m sure they did — if you log into the MyRewardZone website you can click on Offers and Partners and see extra point-earning opportunities, but did I get an email about any of them, all fourth quarter long?  Not one.  Oh, but I did read on a deal forum that if I logged into my RewardZone account I’d find an unexplained free $10 RewardZone certificate.  Which I did.  What was up with that?  NO communication from RewardZone by email, one or two snail-mails with in-store coupons, and they did ask me at the checkout if I had a card, but that was it.  What’s the point of having a rewards program if you’re not going to use it to motivate people to shop?  These guys get an F for their fourth quarter promotions.

JCPrewards is JCPenney’s free rewards program.  This is another program that really missed an opportunity to market to their most loyal members by just NOT communicating.  Their member perks were slim:  they offered a giveaway in Nov. and one in Dec. that you had to be a rewards program member to enter, and they had a 5-hour-only promotion for rewards members with additional savings of up to 25% depending on your order total.  That, and a monthly account statement, was the extent of their rewards program communication with members  in November and December.  It seems like JCP is more interested in using their mobile coupons to drive sales.  If you’re not going to use your loyalty program to drive sales during the busiest shopping season of the year, why do you have it?  JCPrewards gets a D.

Borders Rewards is one of the programs that’s doing it right.  They have frequent, short-term coupons for rewards program members that are higher value than those available to the public.  They send out emails all of the time — several a week (almost too many).  They do a great job of explaining the perks of their upgraded (paid) rewards membership and they are valuable:  additional savings on books but most valuable IMHO is free shipping on any order all the time.  They push both rewards programs, free and paid, in-store and online.  Redemption is easy and unlike some other programs (ahem, JCPrewards), they email to let you know when you’ve earned a reward.  The only ding I can offer these guys is that their RewardsPerks program is poorly explained.  I don’t get it at all, but I see it as being ancillary to the main purpose of driving sales at Borders.  Aside from RewardsPerks, Borders Rewards gets an A+.

Agree with my assessment?  Disagree?  I’d love to hear from you in the comments!

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