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Target Circle Expansion Shows True Value of Customer Data

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By: Lanndon Lindsay |

Posted on February 8, 2019

A perfect 360-degree customer view is, quite simply, the holy grail for marketers.

It’s a vision where strategic decision makers have access to every shopper behavior and purchase motivation at their fingertips, the data just a mouse-click away; where evidence-based insight is transformed into personalized messages unique to each customer. It is, of course, an ideal, a concept for which to strive – but look no further than the world of retail loyalty to understand this concept in a new light.

Target Circle, Target’s free loyalty program which replaced Cartwheel Perks after it concluded in 2017, has just been expanded, allowing the retail giant to dig further than ever before into the data that defines its customers. What started as a trial in Dallas last April will now be rolled out to five more cities - Charlotte, Denver, Indianapolis, Kansas City and Phoenix – and will provide transparency into the 75% of customers that don’t utilize Target’s Redcard.

The takeaway for marketers is that data collection and personalization drive the fundamental motivations behind this initiative. Target’s laser-like focus on guest satisfaction is paying dividends, and collecting more data via loyalty is a natural step according to its leadership: “A Target Run is much more than checking items off your list…we’re building deeper relationships with guests and serving up the most personalized way to shop Target yet, all while encouraging everyone to choose Target again and again.” says Rick Gomez, executive vice president, chief marketing officer and chief digital officer at Target. Target Circle's core perk is a 1% back offer on the next store visit, but further incentives keep consumer appetites energised, such as free next-day delivery on household essentials and 50% off a first-year membership for Shipt, Target's $99-a-year same-day delivery service. But the biggest advantage for Target Circle is that the data accumulated from the program will support overarching efforts to connect better with its guests. Enhanced knowledge about shopper behaviors can fuel strategies such as customized promotions, tailored emails, offers on preferred products, and even surprise-and-delight tactics for birthdays and life events.

That Target’s latest loyalty foray is data-driven should be no surprise – the industry hunger for more data, and ways to better use it, is reaching a new level of criticality. As an economic force, information is king: 5% of the U.S. national output comes from the contributions that data makes to the economy. The tides are turning for big brands who are starting to realize that the true value of loyalty might best be measured as the profile customers take in the digital glow of vast swaths of information, rather than shorter-term figures around engagement, revenues, or membership. Retail behemoths like Nordstrom, Macy's, DSW, Kohl's, Lululemon and J Crew have launched or otherwise revamped their loyalty offerings in the past year.

Just this past December, Lululemon announced the trial of a new annual membership program: costing $128 a year, it comes stocked with incentives tailored to its customers core needs. And while members of “Nordy Club”, Nordstrom’s own program, get rewarded progressively as spending increases, even basic members spending less than $500 a year qualify for perks like free alterations and premium access to new clothing brand launches. In a world where consumer hesitancy about relinquishing data is rampant, this kind of attitude towards yielding value in exchange for information will become increasingly significant in shaping the brand loyalty programs of the future.

The fundamental tenant for successful data proliferation is not a profound one: ““If [businesses] don’t use it for things that deliver value to customers, customers will not be prepared to give them data” explains Tom Athron, group development director at UK department-store John Lewis Partnership. With the expansion of Target Circle and its slew of personalized incentives, the wheels are in motion for Target to edge ever closer to a true 360-degree customer view…and loyalty practitioners would be wise to stay tuned.

Lanndon Lindsay is a reporter at large for The Wise Marketer.