A Study on Target’s Loyalty Program: The Target Circle

by Natasha Ambavle |

A Study on Target’s Loyalty Program: The Target Circle

In October 2019,  Target introduced a new loyalty offering –The Target Circle. In 2020, The Target Circle celebrated its first anniversary with over 80 million members!

The statistics are astonishing, and we’re certain they have already piqued your interest. So what exactly is Target’s loyalty program? What was its impact, and why was it successful?

The Target Circle

Target launched its carefully curated loyalty program after testing it in Dallas-Ft. Worth, Charlotte, Denver, Indianapolis, Kansas City, and Phoenix for over 18 months.

The Target Circle was designed to complement Target’s existing loyalty programs, the Red Card and CartWheel. The new program integrated all members from the existing programs into the Target Circle, including Target.com cards. It was fabricated to rope in new customers and motivate members who hadn’t registered for the Red Card yet. New members could also easily join the Target Circle by signing up for the card, either at the store or online. While non-red card members could take 1% off every purchase at Target, Red Card Members could deduct 5% from their purchases. Members also enjoy various perks and benefits, from birthday discounts to early access during sales, such as Black Friday sales.

Target’s loyalty program also focuses on charity by allowing members to vote, helping direct Target’s charity to over 800 non-profit organizations in their local communities.

Importance of the Target Circle Loyalty Program

The Target Circle has further enhanced their existing program, CartWheel. CartWheel is a successful loyalty program that has generated $1.6 billion in revenue since its launch in May 2013. Integrating it within the Target Circle not only increased Target’s revenue, but offered more benefits to customers. This simplifies the process for the customers while also multiplying the loyalty impact.

Benefits of the Loyalty Program to the Customer

Target’s loyalty program has been modelled on the general customer feedback. Rick Gomez, Executive Vice President and Chief Marketing and Digital Officer at Target stated, “Our guests are at the center of everything we do, and we’re always looking for ways to create even easier, more rewarding shopping experiences that gives them another reason to choose Target. We worked directly with guests to develop Target Circle, and the program includes the benefits and perks they told us were most important to them, from earning on every trip to having the opportunity to help Target make a positive impact in their local communities.”

The Target Circle is designed to offer better deals and privileges to loyal customers. It offers tangible benefits to over 50 million active users without any strings attached. All members, irrespective of how long they have been customers, can add up to 50 offers on their account.

The integration of other loyalty programs within the Target Circle will offer a frictionless and hassle-free customer experience. Loyal customers will also get great deals on products when they shop from Target, either online or offline. Target is known for its great deals and customized shopping experience but has also stated they will further improve personalization to make the shopping experience even more convenient and efficient.

In addition, Target’s loyalty program also has a corporate responsibility element, wherein customers have a say in which non-profit organizations and charities Target must support.

Benefits of the Loyalty Program to the Company

Since its inception in 2019, Target’s loyalty program has proven highly beneficial for the company. The program was extended to include online members, which was a win-win for the company as well as the consumer during most of 2020. The lockdown and loyalty program worked together to boost Target’s online traffic considerably.

Target’s tailored shopping experience was another reason for the increase in online traffic. According to a study by Avionos, 78% of customers are more likely to purchase from retailers that offer personalized shopping experiences and nearly two-thirds are more open to sharing personal information if retailers can better anticipate their needs.

While offering superior deals and discounts on frequently purchased products, Target saw a substantial increase in sales and acquired valuable data on customer purchase history and preference.

The Impact

  • The Target Circle earned the title of Country’s Fastest-Growing Loyalty Program with over 25 million customers signing up in the first two weeks
  • Over 80 million members signed up in just one year
  • The rewards program, wherein customers could save 1% on their purchases, reached $200 million
  • Target Circle offers totalled nearly $2 billion since October 2019
  • The Target Circle greatly impacted Red Card reach in 2020
  • The company also promised they would offer $1 million more in deals to customers in 2020 than in the holiday season of 2019
  • The loyalty program helped the brand to outperform during the Black Friday sales in the year 2020

When enquired about the agenda of Target’s Loyalty Program, Rick Gomez said, “Our goal is to motivate all guests to choose Target more often by providing meaningful benefits.” The brand used customer feedback and reviews in a lucrative manner by fashioning an efficient loyalty program for customers. Since 2019, the Target Circle has helped the brand influence purchasing decisions, boost brand loyalty, improve market penetration, and successfully generated extensive data on customers’ purchase patterns and behavior. For dynamic loyalty solutions are designed specifically for your brand, connect with team Annex Cloud.

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