Rewards Case Study: Target REDcard

August 1, 2017
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Target is one of the most well known and widely loved discount-retail stores in America. While it may be second to Walmart in size, Target’s customers demonstrate a level of loyalty that most bargain brands could only dream of. Target is so popular that there have been numerous articles over the years trying to explain the magic that makes the brand such a fan favourite.

Customers love target and the REDcard rewards program

Today we’re going to take a look at Target’s REDcard rewards program to see if it lives up to Target’s standard of customer excellence. Is the REDcard program another bullseye, or has America’s favourite discount retailer missed the mark?

 

Where Target's REDcard Rewards Program Hits the Bullseye

Target’s dedication to providing an awesome customer experience pays off in a big way for many aspects of their rewards program. From an entire portfolio of valuable customer rewards to specific explainer pages for each component of the program, it’s easy to see that REDcard rewards is right on target.

Target's REDcard Rewards Showcases A Diverse Portfolio of Rewards

One of the best parts about shopping at Target is that you can find pretty much anything you might need there. Whether you’re looking for groceries, office supplies, or a new bathing suit, Target has you covered.

Target's REDcard rewards program has many parts- including cartwheel and subscriptions

This product diversity is one of the main reasons customers consistently come back to Target. No matter what they need, Target’s bound to have it, and this unofficial guarantee keeps Target top of mind.

Target builds on this “all things to all people” ideology with their rewards program. REDcard is home to an entire network of different rewards systems, from Cartwheel (an app that gives customers access to in-store discounts), to Target Subscriptions (which automatically saves a customer 5% and provides free shipping on subscription orders). The rewards don’t stop there though, as members can also enjoy an extended return policy and member-only coupons.

Target's REDcard program allows customers to save 5% on all purchases

With such a comprehensive portfolio of customer rewards, it doesn’t matter if you’re an impulse shopper, a savvy subscriber, a hesitant buyer, or an extreme couponer - Target’s REDcard rewards program has something you’ll love.

Target's REDcard Rewards Program Isn't Just Mobile Friendly, It's Mobile Focused

There’s a big difference between a mobile friendly customer experience and a mobile focused one.  Mobile friendly experiences are experiences that take the value customers can get on their computers and mirror it on their phones. While many brands stop there, the smart ones know it’s just the beginning. Target is one of those brands.

More customers than ever are browsing the web and completing purchases on their mobile devices. In fact, last year 40% of black Friday sales came through mobile devices. The problem is these stats don’t tell the full story. Customers aren’t just splitting their time between desktop and mobile - they’re actually behaving very differently when they switch between the two.

This is where mobile focused strategies come to the rescue. When a brand creates a mobile focused experience they don’t just replicate desktop experiences on mobile devices, but rather take advantage of experiences that are unique to mobile commerce.

Target shows their mobile mindset through the Cartwheel portion of the REDcard program. The cartwheel app lets customers browse and select discounts offers they’re interested in on the go, and if a customer sees something they like in store, they can just scan the item with their phone to see what offers are available. In addition, customers can just present their phone with the barcode for their discounts at checkout and boom - instant savings.

Cartwheel (From Target's REDcard program) lets customers scan discounts from their phones

Target’s Cartwheel program shows us the true magic of mobile engagement, providing customers with experiences that are uniquely mobile and simply not possible with a desktop. The quick scans, the barcode display, and the in-store functionality all leverage the grab-and-go nature of a mobile device, and Target is all the better for it.

Target's REDcard Program Has Amazing Explainer Pages

By now you’re probably realizing that Target’s REDcard rewards program has a lot going on. The good thing is that Target recognizes this and does everything they can to make sure customers can make sense of everything REDcard has to offer.  To do this, they’ve created individual explainer pages for many of the subcomponents of the REDcard program.

Target's Subscriptions allow customers to save 10% and provides free shipping

The main REDcard explainer page gives customers basic details about the REDcard program, describing how it works before branching off into three separate explainer pages.  Each of these additional pages go into details about one of the other components of the program: - Cartwheel, Target Subscriptions, or Coupons.

With so many different moving parts,  REDcard has a lot of information for potential customers to take in. By splitting it up over multiple, focused explainer pages, Target allows customers to explore the ins and outs of the rewards experience at their own pace. So instead of overwhelming customers, Target’s REDcard explainer pages welcome customers and help start the customer relationship on the right foot.

 

Where Target's REDcard Rewards Program Misses the Mark

While the REDcard rewards program is an excellent take on modern rewards strategies, even America’s favorite bargain brand has some faults. They may be few, but there are definitely some areas that the brand can step up its reward game to make sure they’re always hitting their targets.

Target's REDcard Program Has Some Fine Print Exceptions

As we discussed earlier, one of the things that makes Target such a great brand is the breadth of products and services you can find inside any Target store. So when the REDcard program promises customers at least 5% off all Target transactions, we’re talking about a huge amount of potential value!

Areyour customers as loyal as Target's? Calculate your retention metrics to find out!

At least we would be, if the fine print didn’t disqualify parts of the Target brand experience from the REDcard program. For example, Target provides customers with prescription medication and Target Optical services, but doesn’t allow them to apply discounts while using them.  The same goes for many of the restaurants you can find inside Target stores. Once again, an amazing amount of value is withheld by a fine print exception. While the expensive nature of these services ultimately makes the exceptions understandable, it doesn’t change the fact that if customers could actually put REDcard to use everywhere inside a Target store, we’d be talking about one of the best rewards programs on the planet.

Target's REDcard Program Hides Most of its Value Behind Payment Cards

Target has built the REDcard rewards program around the physical red card itself. The card can either be a credit or debit card that works much like any other branded payment card. These cards have become so popular that it seems every mall, grocery chain, and superstore has their own, and is perfectly willing to interrupt your checkout experience to try to pitch it to you.

Target's REDcard debit and credit cards

This widespread popularity of branded payment cards is actually a huge drawback for Target’s REDcard program. Today’s busy customers are trained to tune out repetitive experiences like the obligatory “would you like to sign up for a Walmart/Shoppers/HEB/Walgreens/Target credit card” when trying to pay for their order and leave the store.

Most customers just aren’t willing to add another card to their wallets and unfortunately the REDcard program requires that they do. This restriction really limits the accessibility and might deter many potential customers. Target’s program Target’s REDcard program provides some very genuine value to the customers who actually engage with the program, but hiding that value behind a branded payment card means many customers may never get to realize that value for themselves.

 

Looking for a Great Rewards Program? Aim for Target's REDcard

Target is a master of creating great customer experiences. With prices that make you feel like you’re at Walmart and an atmosphere that reminds you of your local Barnes and Noble, it’s no wonder customers love to love the bullseye brand. As one might expect, their rewards program is right on target with diversified rewards that can appeal to a wide variety of customers without overwhelming them and a mobile experience that really puts the power of commerce in a customer’s hands.

Want to build a great rewards program like Target's? Check out the free guide

The REDcard rewards program is actually so strong that the only downsides come when it limits some services or customers from being included. By hiding the program behind a branded payment card, customers who aren’t looking to add another card to their wallet miss out on amazing offers and valuable discounts. Similarly, these amazing offers don’t apply to some of Target’s most valuable services like Optometry which, while understandable, leaves you wondering just how awesome the program would be without exceptions.

However, even with these slightly off-the-mark oversights, America’s favourite discount brand has what might soon be one of America’s favourite rewards programs. So if you’re looking for a great program… aim for the Target.