Loyalty Truth

Target’s Cartwheel app has steadily gained traction with consumers since its 2013 launch. The retailer has now decided to pilot a rewards program within the app known as “Cartwheel Perks”. The rewards pilot is aimed to further engage the mobile customer and drive incremental in-store traffic and spending.

Target will reward customers for using its app by enabling users to earn credit towards purchases and offering various additional perks. Customers receive 10 points for every dollar spent, exclusive of purchases at in-store CVS pharmacy locations and gift cards. After acquiring 5,000 points, users will be able to make a selection from 25 different rewards.

The program is currently being tested across 126 stores in 4 cities and will expand nationally if the initiative is proven successful. With 27 million customers signed up for the Cartwheel app, Target is putting a big customer loyalty bet on the table. Target reports these users have reaped a combined savings of $600 million to date, and the introduction of mobile perks will need to be crisply delivered with a degree of personalization in order to contribute to further growth.

Editor’s note: Spending $500.00 to reach a reward level is no small ask of the consumer, and reports are that rewards in the pilot will be valued between $10 – 20. That’s the equivalent of a 2-4% rebate. It will be interesting to see if this is enough to keep Target customers engaged.