Macy's extends Star Rewards beyond store card holders
Macy's on Tuesday expanded its revamped Star Rewards loyalty program to customers regardless of how they pay, the retailer said in a press release. Customers without a Macy's credit card can participate through a new "Bronze" tier, which offers money off on certain days in addition to other benefits.
Macy's card users are still privy to certain perks, including discounts, special sale days and free shipping, depending on their level of spending, which automatically qualifies them for "Silver," "Gold" or "Platinum" rewards levels.
The department store, in the midst of a turnaround program under CEO Jeff Gennette that in part entails expansion of its Backstage off-price effort, announced an overhaul of its loyalty program last September.
Amazon and warehouse retailers like Costco, Sam's Club and BJ's lock in their shopper bases with up-front membership fees. Other retailers, from mass merchants and department stores to specialty retailers, have relied on credit cards to keep customers close.
Traditionally card holders enjoy perks unavailable to anyone else. Most (62%) consumers have a store card in their wallets, and 30% have two or more, according to a Ipsos Retail Survey last year from Vyze. And shoppers really do show loyalty to the retailers issuing those cards — 40% say they are more likely to shop at that retailer because of it. Indeed, store cards are so effective that Amazon, Costco and others offer them and their benefits in addition to memberships.
That has more retailers working to get customers to sign up for their own branded store credit cards, often during checkout, to encourage purchases, grow ticket sizes and breed loyalty. The good news for retailers is that they seem to be making progress, although Amazon has managed to make a little more progress than most. Nearly a third (32%) of customers who participated in the Ipsos survey said they have an Amazon credit card. Target (30%) and Macy's (24%) came in second and third.
But exclusivity risks alienating shoppers that don't want another card in their wallet, and younger shoppers are less likely than their elders to use credit. Millennials are more likely to use the credit cards to build up their credit rather than day-to-day living, Peter Caparso, Checkout.com's president of North America, told Retail Dive earlier this year. "Growing up during the Great Recession, has given them, definitely it seems to me, a reluctance."
Target and now Macy's appear to be addressing that by corralling non-card users into their loyalty programs. Target is testing a new tier for its loyalty program, dubbed "Target Red," that gives customers perks without having to sign up for its Redcard credit card, the company said in March. In both cases, card holders still enjoy greater benefits, but the un-carded tier gets more shoppers onto the retailers' mailing lists — and databases.
The move was long planned as Macy's loyalty revamp gained traction, according to Gennette. "Our customers are responding enthusiastically, particularly at the Platinum level, which is our most valuable customer," he told analysts in February about the loyalty changes, according to a transcript from Seeking Alpha.
- press release via BusinessWire Macy’s Star Rewards Are Now Bigger, Better and Available for Everyone
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