On the heels of Macy’s recent announcement to go multi-tender with its rewards program, Kohl’s responds with a similar strategy but ups the ante!
By Wise Marketer Staff
US-based department store giant, Kohl’s, has announced some significant changes to their rewards program. First, they are consolidating their three previous and separate designs - Kohl’s Charge, Kohl’s Cash and Yes2You Rewards — into a single unified loyalty strategy that offers greater simplicity for the customer. Kohl’s Charge (private label credit card) customers will now earn 10 percent Kohl’s Cash on every purchase. Kohl’s Cash is redeemable on a future purchase within a specified time frame. The PLCC is reported to account for 60% of the total sales volume at Kohl’s. The Yes2You component, where 30 million members previously earned one point for every dollar spent and a $5 reward for every 100 points, is being eliminated. However, customers without a Kohl’s Charge card will earn five percent Kohl’s Cash on every purchase regardless of how they pay. This is the first time Kohl’s has extended its reward offerings to include all tenders, not just PLCC.
The value proposition for members is lucrative. Everyone earns 5%, accelerating to 10% if the member chooses to transact with the PLCC. Periodic cash bonus events, traditionally used by Kohl’s, will still be offered to members whereby they earn 20% - or $10 in Kohl’s Cash for every $50 spent. These bonus events were traditionally confined to the PLCC members only. An elite membership tier has been modified for best customers – those who spend $600 or more in a calendar year provided they transact with the PLCC. A few soft benefits apply to the Elite tier - free shipping from Kohls.com all year, early access to Black Friday deals and other promotional events and queue priority on its customer service hotline.
Finally, having listened to members complain over the years about having their Kohl’s cash rewards expire because they forgot to use them, Kohl’s will automatically keep track of each members Kohl’s Cash on the branded app and remind them of available balances at the point-of-sale.
While it sounds basic, it is a significant move for Kohl’s and consistent with loyalty marketing best practices long advocated by our sister company, The Loyalty Academy. Multi-tender loyalty programs are far more effective than the PLCC only varieties that have been a staple of the department store and specialty retail environments since the 1990’s. Best customers should always be rewarded and recognized for their purchase behavior, regardless of how they elect to pay. The periodic bonusing and the elite tier with soft benefits also follow best practices in design. Bonuses drive visits and incremental volume; soft benefits remind best customers how important they are to a brand and clearly reinforce the emotional side of the loyalty equation. The use of trigger communications at POS to remind members of their Kohl’s cash benefits is not only a solid improvement over the “breakage” models of the past, it is a value-added mechanism to spur increased usage of a branded app.
The program is being piloted across 100 stores in eight markets with full rollout slated for 2019. We salute Kohl’s and wish them continued loyalty marketing success!
