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Target tests mobile loyalty app to drive in-store purchases

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March 2, 2015

Target's RedPerks loyalty app

Target’s RedPerks loyalty app

Target is testing a new loyalty program called Redperks that centers on a mobile application enabling users to earn points by scanning a bar code every time they make a purchase.

The app – which is available in the Raleigh-Durham area of North Carolina and by invitation only – enables users to earn 10 points for every dollar they spend and rewards them with 5 percent off the price of a purchase once they reach 5,000 points. Redperks is an example of how mobile makes it easier for both merchants and consumers to partake in the benefits of loyalty programs.

“Redperks is designed to be an easy and fun way to deliver even more value to guests by rewarding them for doing what they already love to do — shop at Target,” said Target spokesman Eddie Baeb, Minneapolis, MN. “We see Redperks as another way mobile apps can enhance the shopping experience.

“The beta version of the Redperks app is currently available only for guests in the Raleigh-Durham area,” he said. “Guests in this test market can use the Redperks app to earn points when they check out at Target.

“These points can be used for discounts on future purchases. The program also includes other rewards and bonus perks.”

Bonus offers
Users of the Redperks app will receive a coupon via the app for the 5 percent off once they reach the threshold.

The 5 percent off can be stacked on top of the 5 percent off customers get who have a RedCard as well as most other coupons.

Target will test other bonus offers and surprise perks to see how customers respond.

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Screen shots of the app appearing in the Apple App Store suggest that one recent bonus offer enabled in-store shoppers to earn 200 points when they spent $80.

Additionally, Target appears to have offered registered app users a free Starbucks on several occasions. With many Targets having Starbucks concessions on-site, customers do not have to leave a store to redeem the offer.

Meeting shoppers’ needs
Merchants are taking a closer look at loyalty as a result of the growth in mobile, which can make it easier for members to earn and redeem rewards. At the same time, merchants gain valuable information about shoppers that can help them better target their best customers.

Perhaps most importantly, mobile loyalty helps merchants better meet shoppers needs.

According to research from 451 Group last year, 51 percent of survey respondents wished more stores offered mobile apps to collect and redeem loyalty points. Additionally, 44 percent said they would strongly recommend a company to friends if it had a mobile loyalty program that offered personalized rewards.

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Target is a leader in mobile marketing, and was named Mobile Commerce Daily’s Mobile Retailer of the Year in 2013.

The chain has not rested on its laurels and continues to build out its mobile strategy, with RedPerks the latest example.

“Over the years, Target has been testing and strengthening its mobile tactics,” said Derrick Lin, brand and mobile strategist at Resource Ammirati, Columbus, OH. “From the many iterations of the Target app, in-store augmentation features, Cartwheel and mobile coupons, SMS alerts and in-store mobile CTAs, it is no surprise that Target is now venturing into mobile loyalty.

“It is clear to us that Target recognizes the role that mobile plays in its customers’ shopping activities, especially in-store,” he said.

“While it’s no secret that consumers are increasingly dependent on mobile during the shopping journey, it’s likely that mobile engagement data and sales attributed to Target’s mobile tactics played a role in the brand’s decision to extend its mobile efforts to loyalty. It critically impacts routine purchases and strengthens relationships.”

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York

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