Why Reebok and Target upended their loyalty programs

Sheryll Poe
NRF Contributor

Do you ever feel like sometimes you love a brand more than they love you? That was the dilemma facing Target a few years ago, according to Executive Vice President, Chief Marketing and Digital Officer Rick Gomez.

“I believe that beloved brands can be a unifying force [in a fragmented world], but we have to think differently about what it means to be a beloved brand,” Gomez said while speaking Sunday at NRF 2020 Vision: Retail’s Big Show.

We were trying to show our guests we appreciate them, but we made it hard for them to navigate through everything.

Rick Gomez, Target

Gomez shared the story of a Target guest named Josie who said, “Sometimes it feels like I love Target more than Target loves me.” At the time, Target had multiple guest loyalty programs, including a mobile app, the Red Card credit and debit options, social savings app Cartwheel and a points-based program, RedPerks.

Josie “was experiencing why we needed to get loyalty right,” Gomez says. “We were trying to show our guests we appreciate them, but we made it hard for them to navigate through everything.”

That was the genesis of Target Circle, a new loyalty program rolled out in October 2019. Target got rid of RedPerks, which Gomez said was “too limiting and too transactional.” It also phased out Cartwheel, but moved many of the benefits and rewards into the new Circle program app, which allows guests to earn 1 percent toward their next trip every time they shop at Target, offers personalized discounts and gives guests a say in which charities they want their local stores to support. “So far, guests have steered more than $2.4 million to almost 900 organizations nationwide,” Gomez said.

Best of all, Target Circle gives its 50 million active users “clear, tangible benefits immediately, no strings attached,” Gomez said.

Similarly, Reebok wanted to create a revamped loyalty program that would be easy to navigate, easy to understand without caveats or exceptions, and would launch as a “minimum lovable product,” as opposed to a minimum viable product, said Reebok Vice President, Marketing and Digital Brand Commerce Matthew Blonder.

With an increasingly crowded marketplace, “It’s imperative that we brands create deeper and more meaningful connections with our consumers each and every day,” Blonder said. “Our end goal is to increase consumer engagement within the Reebok ecosystem.”

Reebok was able to tap into a trove of data and insights to develop its Reebok Unlocked loyalty program, which lets members earn points for interacting with the brand beyond making purchases and offers experiential and value-based rewards to both its traditional consumer and the training community. “Through our tests that were both quantitative and qualitative, we were able to eliminate a good number of benefits that could have proven costly and very time-consuming to manage and curate,” Blonder said.

In addition, Reebok uncovered additional benefits customers cared about but that the company wasn’t aware of, including early access to products or exclusive product offerings, exclusive access to activations, events and experiences, and professional development and training certifications.

Within the first six months, Reebok Unlocked had 2.5 million members in the United States alone; purchase frequency for the training community is 117 percent higher for those in the program and 10 percent higher among the non-training community, Blonder said.

Even more impressive has been the steady progression of loyalty members through the program’s four tiers. “Because of the data available to us and our ability to communicate in a meaningful way with our consumer, we are able to move 5,000 folks from one tier to the next every single week,” he said, “driving significant improvements in business health and brand love and loyalty.”

More on NRF 2020 Vision

NRF 2020: Retail’s Big Show
Building a retail empire starts in the empire city. Find your vision at NRF 2020.
Read more
How Reformation sticks to its mission and stays ahead of the pack
CEO Hali Borenstein on making a great product, enabling a fast supply chain and using data-informed manufacturing.
Read more
How CFOs from Levi’s, Rothy’s and Macy’s are shaping business strategy
Three of retail’s top CFOs on what makes a “just right” growth leader.
Read more