Like many of its department store and mall focused counterparts, Macy’s has been in the middle of financial misfortune. It started with an especially poor performance last holiday season and the brand’s downward spiral has continued with the closures of its 102 locations. CNBC predicts that the company’s sales could take a $575 million hit in 2017, and the Motley Fool notes that Macy’s owns one of the worst-performing stocks in 2017.
In such a turbulent time, it looks like Macy’s revamped rewards program is a desperate attempt to reinvent itself. It is starting off by updating its current rewards system aimed specifically at its credit card holders, but it will open up its new loyalty program to all customers sometime in 2018. It’s following in the footsteps of many of its competitors including Kohl’s and Nordstrom who have switched to tender neutral programs in recent years.
Considering that 9% of Macy’s customers account for 46% of its department store’s sales, Macy’s revamped rewards program makes sense. It will help it to boost customer spending, which is exactly what Macy’s is hoping to do with its loyalty program.
Macy’s overall marketing strategy update is aimed at precision marketing and reducing the often chaotic discount wars. It’s looking to focus its TV advertising around 4 specific seasonal promotions each year with more localized TV spots instead of national ads. It’s also ramping up its omni-channel capability with the expansion of its buy online, pick-up in store platform and looking to focus on targeting customers more intelligently with stronger personalization and recommendation functionality built into its mobile app.
Indeed, Macy’s revamped rewards program fits into its CMO’s (Rich Lennox) vision of revitalizing the brand engagement. Though Macy’s track record suggests that it has never hesitated to change up its strategy, some of its innovative initiatives have failed to redirect the company’s current downward momentum. That’s precisely why people and experts are looking closely at this new program.
Macy’s seems to be recognizing the importance of overall customer engagement, which is why I am cautiously optimistic about its new loyalty strategy. Tackling the bigger picture of how customers perceive a brand is a key to long term success. A loyalty program built just to reward purchasing won’t keep customers interested for long, it needs to continuously grow and adapt with its customers. Check back in at the beginning of 2018 to hear our take on Macy’s revamped rewards program.