J.C. Penney is unveiling a new loyalty program that lets Sephora customers double-dip on rewards and allows earned points to roll over from month to month.
It launches this week with an upgraded mobile app that keeps track of rewards and matches some of the program features of Penney’s most direct competitor, Kohl’s.
Plano-based Penney has been working to revamp its loyalty program for more than a year. It was a weakness that CEO Marvin Ellison said had to be fixed as part of the company’s plan to get more revenue from each customer. That focus has included putting Penney in the kitchen and laundry appliance business and stepping up the number of Sephora locations to almost 650 inside Penney stores.
The department store chain studied the hospitality and travel industries and its retail peers, while asking customers to rank features that were most important to them, said Sherina Smith, vice president of loyalty and customer relationship management.
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“Customers didn’t like having a limit on how many $10 rewards they can earn or that points expired,” Smith said. “That’s not a way to drive loyalty.” Penney lifted a cap on the number of $10 rewards shoppers can earn in a month. Those rewards are good for 60 days. Members-only prices and shopping events have been added where shoppers can earn rewards faster.
Penney’s rewards customers shop and spend more than twice as much as the retailer’s other customers, and 66 percent of Penney’s sales comes from rewards customers, Smith said. The goal also is to increase the number of Penney credit card holders, she said, which is now about 40 percent of its customers. In the new program, Penney credit card purchases earn twice the points of other types of payments.
“Brands can’t be complacent. They have to look at their top-tier customers and make sure they’re taking care of them,” said Melissa Fruend, partner at LoyaltyOne Global Solutions. “People want to be recognized for their loyalty.”
Penney’s revamped rewards “are designed to get people to come back more often and get discounts on what they want,” Smith said. The program leverages Penney’s Sephora shops so that customers can earn that brand’s Beauty Insider points plus Penney rewards.
“If your product or experience is broken, changes in your loyalty program alone probably will not fix it,” Fruend said, but it has to be part of a strategy.
Date:July 10, 2017