Target’s new rewards program drives sales in-store and online, while integrating philanthropy as differentiator.

WHAT HAPPENED: Target will introduce Target Circle nationwide in October, a free loyalty program offering customers personalized coupons, birthday rewards, one percent back on all purchases and the opportunity to choose a local organization for Target to donate to. Target piloted the program in five markets over the course of eighteen months and saw an increase in sales from participants.

WHY IT MATTERS

  • Target’s new program enables itself to be a resource for local communities, something Amazon hasn’t been able to do. The reward program allows Target to better compete with Amazon by collecting more data from its customers while being involved in the community.
  • As many direct-to-consumer brands donated to a cause on day one, Target might be the first big-box retailer to do so. As shoppers become more informed and interested in the philosophy behind the brands and retailers they patronize, Target’s decision to give back to the community should work well. Target Circle’s ample discounts could influence shoppers to buy their essentials at Target versus a Walmart or Amazon.