Macy's exits Plenti loyalty program
Macy's is ending its participation in the multi-retailer Plenti loyalty program, the department store told Retail Dive in an email. Plenti points will accrue on qualifying Macy's purchases until March 15, and customers can redeem Plenti points on qualifying purchases at Macy's until May 3, a Macy's spokesperson said. After May 3, Plenti points earned with Macy's can be redeemed at the remaining Plenti partners.
Those remaining partners, however, are in "confidential discussions" with American Express-run Plenti about the future of the program, a spokesperson for Plenti told Retail Dive.
American Express launched Plenti in 2015, a first for the U.S., allowing consumers to shop at one place and redeem their points at another, a concept that has been successful elsewhere, including Canada, the European Union, Brazil and Australia.
It's been a tough month for Plenti. At the New Year, American Express confirmed that Plenti partners Direct Energy, Hulu, Nationwide, Enterprise, Alamo and Expedia had dropped out, a development posted on an alarming red banner on Plenti's website. An even earlier sign of trouble came last fall, when AT&T stopped taking Plenti points.
Macy's move is another tough hit for Plenti, but the writing was on the wall in September, when the department store unveiled a loyalty revamp as part of its turnaround effort. Under that new system, customers started accruing rewards Oct. 2, with Macy's credit card holders automatically enrolled in one of three tiers, "Silver," "Gold" or "Platinum." The biggest spenders enjoy free shipping, additional savings and earned points on every purchase, among other benefits.
"Totally expected. Many other brands already pulled out," Barry Kirk, VP of loyalty for Maritz Motivation Solutions, told Retail Dive in an email. "A U.S. coalition program was always a long shot anyway."
Plenti never caught on with American consumers, according to research from Maritz, which provides loyalty programs to US and global companies. Although Plenti had a lot of sign-ups and American Express support, half of consumers Maritz surveyed said they weren't at all familiar with it. (Of those that were familiar, a majority had a positive or neutral view of the program, Maritz found.) Less than half of self-identified Plenti members said they have ever redeemed for a reward through the program. Of those, most said they only purchase from one or two coalition members, which, according to Kirk, defeats the main value proposition of the coalition model.
In addition to its service of pooling points, Plenti runs a marketplace featuring deals from its partners, but that hasn't gained traction, either. Alhough the program has 30 million members it has "struggled to attract and retain key partners," Kirk wrote in a recent blog post.
There are a few possible reasons for the stumbles. Skeptics have maintained that the model isn't feasible in the U.S, which has a vast, regionalized retail landscape where even some big retailers aren't in all 50 states. In addition, most U.S. retailers have established and nurtured their own loyalty programs for decades, responding to the regional tastes and demands of local customers. While proponents of multi-retailer loyalty programs have pointed to Canada for success stories, a couple of similar programs there are also faltering, Kirk points out.
But it's the program's limited choice that may have turned off consumers, according to Jim Fosina, CEO of Fosina Marketing Group.
"Today's consumer is looking for options and competition," he told Retail Dive in an email. "Customers want to choose for themselves rather than [being] given limited choice. Amazon's product selection, delivery options, reviews and ongoing discounting and overall simplicity has shown today's consumer that choice itself is a choice."
If Plenti is to succeed (or even continue), American Express should consider offering it more widely, (which in turn could increase overall American Express membership) — and retailers may be better off nurturing their own programs, Macy's included, Fosina said.
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