Canadian Air Miles operator buys into DotzLoyaltyOne, the operator of Canada's popular Air Miles rewards programme, has acquired a 29% stake in CBSM, the operator of Brazil's online-only Dotz loyalty programme, and the two companies will now develop Dotz to include a traditional retail-based coalition loyalty structure similar to that of Air Miles.
The specific terms of the agreement have not yet been disclosed but, in return for its equity stake, LoyaltyOne says it will provide Dotz with programme design and strategic counsel, business development support, operational planning and best practices guidance, as well as financial consideration.
Founded in 2000, the Dotz loyalty programme has over 200,000 active members, 50 online sponsors, and a rewards catalogue featuring some 6,000+ products and services.
By adding more sponsor brands (including leading high frequency businesses such as a national bank, a regional grocer and a national fuel retailer), the expanded coalition programme is being introduced in Belo Horizonte (Brazil's third-largest metropolitan area, with a population of more than 4 million). This is expected to be the first phase one of a potential multi-phase roll-out throughout Brazil.
LoyaltyOne's investment in Dotz marks the start of a global expansion strategy. According to Bryan Pearson, president for LoyaltyOne, "We've identified priority areas for global growth, and Brazil presents a huge opportunity. Our goal is to build coalitions similar to our Canadian model in markets where none exist today."
Dotz remains a privately held company, although LoyaltyOne is its first external shareholder. Dotz' president and CEO, Roberto Chade, added: "When we wanted to expand and enhance the programme, we chose LoyaltyOne because of its expertise in managing the Air Miles coalition programme."
Key sponsors already signed for Dotz's retail-based coalition programme include:
- Banco do Brasil - a major national bank with more than 78 million cards in circulation, including debit, credit and co-branded cards;
- Ale - a large national fuel retailer with more than 2,000 locations;
- SuperNosso - a large regional grocer in Belo Horizonte, where the programme is being launched.
In addition to these partners and the existing 50 online sponsors, LoyaltyOne will now work with Dotz to grow the programme by adding more sponsors and to increase the number of represented categories, including telecommunications and pharmacy partners.
Dotz is already similar to Air Miles in that consumers can join for free (either online or at participating sponsor locations) to collect points with their Dotz collector card. Of the more than 200,000 existing active Dotz collectors in Brazil, some 20,000 in the Belo Horizonte region will be automatically enrolled in the newly expanded programme, through which Dotz points can be earned from everyday shopping.
Brazil has the fifth largest population in the world with more than 190 million citizens (compared to 33 million in Canada), and has many of the characteristics required to host a successful coalition loyalty programme. "Latin America is a burgeoning region for loyalty," Pearson concluded.