Department Stores Missing Out on Loyalty Opportunities

March 8, 2008 · 0 comments

On Monday, I had to make a rush trip to JCPenney. There wasn’t anything I needed, but I had received a coupon in the mail that was about to expire. “$10 off a $10 or more purchase,” it said. Now how could I pass that up?
When I called to ask my mom if she had used hers and if not, if she wanted to come with me, she asked, “What coupon? I didn’t get a coupon!”
Looking at the details on the coupon I had, I found that it was only available to certain JCPenney cardholders. My mother spends much more money at JCPenney than I do, but because she’s not a cardholder, she didn’t get the coupon incentive to shop.
Needless to say, my mom stayed home.
This got me to thinking about how department stores are completely missing out on the opportunity to cultivate loyalty among a huge segment of their customer base: those who shop at the store without using their department store credit card, paying by cash, check, or a major credit card instead.
Are those customers any less important to the department store’s business?
When I go to a Hallmark store, I scan my Gold Crown Club rewards card every time. It’s not a credit card, but a loyalty card. The benefit to me is that after every however-many dollars are spent at the store, I get a free GC. The benefit to the store is that they get to track my spending behavior and can use that information for targeted marketing. Grocery stores do this, too (in theory…though I have yet to see how they’re really using the information to market to me). Why don’t department stores do this?
If the department stores had any sense at all, they would implement something as simple as the Gold Crown Club card. Give customers an incentive to scan the card every time regardless of their payment method, such as, “Spend $100, get $5 off your next purchase of $25 or more.” Then use the information you collect on the customer’s purchasing habits to target specific offers by email, snail-mail, or coupons that print at checkout. Give incentives for shoppers to increase their average month’s spending. Reward your good customers, regardless of their payment method.
Give my mom a reason to shop!

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