Target Tests Mobile Rewards App

by Raymond Pucci 0

Add another merchant loyalty app to your smartphone. As the following article relates, Target is testing a new mobile rewards feature, Cartwheel Perks, to its existing app for a possible nationwide rollout.

Three years after it debuted its Cartwheel mobile app, Target is piloting the addition of a new rewards feature in St. Louis and three other cities.

The Minneapolis-based retailer said the addition of ‘Cartwheel Perks’ in 126 stores — the biggest update to Target’s app to date — may ultimately be rolled out nationally. Target’s Cartwheel app currently allows customers to select deals for products on their phone, then have a barcode scanned at checkout where savings are deducted.

Beginning this week in St. Louis, Denver, Houston and San Diego, Target’s testing a new feature will allow customers who download the latest version of the Cartwheel app to earn rewards that can be redeemed for merchandise that range in value from $10 to $20, including free sunglasses, laundry detergent and athletic apparel.

With Cartwheel Perks, customers will receive 10 points for every dollar spent at a Target store, with the exception of CVS pharmacy purchases and gift cards. Once a guest reaches 5,000 points, they’re eligible to select from 25 rewards.
Last year, Target began testing a similar app-based mobile rewards program, REDperks, in the Raleigh-Durham, N.C. market. With REDperks, customers receive a 5 percent off certificate after accumulating 5,000 points. REDperks is not tied to Target’s Cartwheel app.

Beyond the existing discount offerings on products, Target’s Cartwheel Perks will offer customers the opportunity to earn points which can be redeemed for merchandise. Typically when merchants combine rewards points with basic product discounts, they receive an initial boost in sales and customer adoption. Then success and sustainability depends on the level of program rewards, as well as the friction-free usability. Meanwhile, Target has also tested REDperks, a loyalty version of their in-house credit card, but has not brought it store-wide. Here’s hoping Target finds a way to integrate the two programs as consumers are becoming inundated with merchant loyalty and payment systems.

Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group

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