After market research revealed that consumers had a limited grasp of the rewards they could receive though their loyalty progam, Macy's decided to overhaul the system entirely, and they came out with the current model: the Star Rewards program. The program is significantly simplified from the old system, with three tiers that give out a graded scale of benefits for those who spend certain amounts at the department store.
The Star Rewards program has three levels: those who spend over $1,200 receive a 25 percent off Star Pass Coupon that lasts for 60 days, free shipping for a year, and 5 percent Macy's money cash back on all purchases. There are two lower tiers that offer the same Star Pass Coupon, knocking out the cash back and free shipping. Macy's also plans on introducing experiential benefits in 2018.
Simplified Loyalty Programs
Macy's New Star Rewards Program is Easy to Understand
Trend Themes
1. Simplified Loyalty Programs - There is an opportunity to simplify loyalty programs across various industries to improve customer understanding and engagement.
2. Graded Scale Benefits - Implementing a tiered benefits system based on spending levels presents an opportunity to incentivize higher spending and increase customer loyalty.
3. Experiential Rewards - Introducing experiential benefits alongside discounts and cash back can enhance the overall customer experience and differentiate loyalty programs in the market.
Industry Implications
1. Retail - Simplified loyalty programs can be adopted by retailers to provide clear and enticing rewards, ultimately boosting customer retention.
2. Hospitality - The implementation of graded scale benefits can be applied in the hospitality industry to reward guests who spend more, leading to increased customer satisfaction and loyalty.
3. E-commerce - By incorporating experiential rewards, e-commerce platforms can create memorable experiences for customers, driving repeat purchases and brand loyalty.