Department Stores Missing Out on Loyalty Opportunities

March 8, 2008 · 1 comment

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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{ 1 comment… read it below or add one }

Ginger March 8, 2008 at 9:04 pm

I get points for using my Sears card at Sears or anywhere else. It’s a Sears Visa (if my memory doesn’t fail me). I recently redeemed my points for $60 worth of Sears GCs. They put “$ off” coupons in some of their sale ads IF you use your CC.
I also have a WalMart Discovercard. We put all of our gas on that card because we get a $0.03 per gallon discount. This helps when you are filling up 3 vehicles weekly. I get a rebate check from them for $10 every time we hit $1000 in purchases.
So I can easily see that having a CC with a particular store will save folk some bucks IF they pay it off monthly. But that generally isn’t the case. Therefore any of the big box stores will always cater to the CC customer because they are simply more valuable to them. Most folks pay the minimum balance on their bills monthly. These stores exist off of the interest they charge us.
So, maybe the non-credit card customers are no less valuable but in a reverse sort of way, they aren’t worth as much in the long haul. The accountants hovering over the coffers don’t smile when you walk in and use a $10 off $10 and stand there and spend that $10 you just saved making a $10 payment either. They send you the coupon as a loss leader to get you into the store so you can charge more stuff.
Lastly, Becky did you charge more stuff or just get that one $10/$10 purchase? (rhetorical question of course) Odds are that most anyone who got the coupon you did, managed to charge more than the one item. And, in the process they can also manipulate who gets more coupons or doesn’t. I see this happening with Target all the time based on the amount of messageboard info and blogs I read. We charge all of our Target purchases but I don’t see any coupons for ANYTHING yet. I’ve had a card with them for about 9 months now.
Just me….thinking with my fingers!


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