Becoming a card-carrying member of your favorite business's loyalty program is getting more rewarding -- even as many stores ditch the actual cards themselves.
Retailers, supermarkets and other companies are increasingly adding new benefits to their loyalty programs, which offer shoppers discounts and other perks in exchange for regular business. Half of retailers said the programs would be a key part of their strategy for 2012, compared with 41% last year, according to the National Retail Federation. In recent weeks, companies as varied as Target, Express, Sports Authority, Groupon and Jersey's Mikes have launched new reward initiatives. "Companies are really getting serious about building loyalty," says Michael Gatti, executive director of the Retail Advertising and Marketing Association, a division of the NRF.
The aim: keep people from browsing in-store and buying elsewhere. Dangling rewards can be a way to get and keep people on site, say experts. Especially the latest iterations, which reward members with more exclusive coupons and sales, often sent directly to your phone when you walk in or check in via social media. Few require remembering physical cards these days, either, subbing in scannable codes from a phone, app connectivity or linking them to a credit or debit card. "Stores feel like they're being shopped as showcases," says Jeff Green, an independent retail analyst based in Phoenix, Ariz. "This keeps them interested in bricks-and-mortar."
Kelli Grant stopped by The Daily Wrap from The Wall Street Journal to discuss new loyalty perks for shoppers. (Listen here)
Of course, more high-tech programs means more data collected about who's buying what. And social media check-ins can leave a public trail of your current location. But experts say shoppers can expect collected data to stay private. "Retailers are extremely proprietary of that information," says Gatti. "They don't want to destroy that customer relationship." Some stores, including Rite Aid and Sears, have also talked about using the data in ways that benefit shoppers, like having more of popular items on hand, says Kelly Hlavinka, a managing partner at Colloquy.
Experts say these five growing perks of joining loyalty programs outweigh any potential downsides of tracking:
Retailers including Starbucks, Gap and Best Buy have long offered programs with multiple membership levels, awarding bigger spenders with more perks. More companies are starting to follow suit, says Gatti. This spring, Express launched a new Express Next program offering members $10 back for every 2,500 points earned through purchases, social media check ins and other deals. When someone earns 7,500 points in a year, they earn "A-List" status, which triggers $15 rewards instead, among other perks. Most status bumps last just a year, so experts suggest reviewing terms and offers before chasing them.
The points you earn in one program may be useful at other stores, says Hlavinka. For example, Best Buy and Citibank launched an app last summer that lets Citi cardholders use their reward points to pay at Best Buy stores. Then there's Shopkick, a free app that awards points and discounts for visiting and making purchases at retailers including Old Navy, Crate & Barrel, Macy's and Exxon. The newest: Target, which signed on in late May and is currently offering 200 points for visiting and a limited number of $5 off $50 coupons. When there are multiple redemption options, crunch the numbers to make sure you're getting the best value per point.
Credit or debit links
How much you spend on a particular card is more likely these days to trigger some kind of merchant offer. Financial institutions -- including Citibank, PNC Bank and Bank of America -- have begun dabbling in retailer offers and coupons that show up in your online account statement , based on how much you're spent with that store or a competitor. Earlier this spring, Groupon took a credit-card-linked rewards program nationwide, letting customers sign up a card of their choosing, and earn deal vouchers based on their spending at participating local merchants.
Programs are increasingly trying to engage customers not just by offering discounts, but looking for fun perks like samples, early access to a coveted collection or special events, Gatti says. When Nordstrom revamped its reward program in January, all members got an annual credit of $100 or more for in-store tailoring, and members of Sports Authority's new program can land access to sports tickets and signed memorabilia. Brad Spirrison, managing editor of app review site Appolicious, likes Belly, a loyalty platform for small businesses in cities including Chicago and Boston. "It's not so much about buy 10 sandwiches, get one free," he says. Merchants can get creative awards currently up for grabs include 10 minutes of all-you-can-eat pasta at an Italian restaurant, brunch in bed for two from a grocery store, and the option to shave a barber shop owner's head.
Social media exclusives
Rewards club members who don't "like" the brand on Facebook or follow it on Twitter may be missing out. More programs are rewarding social media engagement with extra coupons or deals, says Deborah Mitchell, a clinical associate professor of marketing at Ohio State University. For example, Hertz recently offered a social-media-exclusive coupon for $15 off a rental -- or up to $40 if users publicized the deal to friends. Seeing so many deal posts in your feed could prompt unnecessary spending, she says, so just link up when you're ready to make a purchase.