DALLAS – Target started a pilot program on a new loyalty rewards initiative that doesn’t make users sign up for a store credit card, the Dallas Morning News reports. The Target Red Program is being tested in Dallas-Fort Worth.
Target’s Redcard store credit card, which gives customers a 5% discount when used at Target stores, has long been the discount retailer’s only loyalty program. “We know not everyone wants a credit card,” said Joshua Thomas, spokesman for Target. “By focusing on Dallas-Fort Worth, we think we can learn a lot. … It's a market where we've made significant investments.”
During the beta test, shoppers sign up for Target Red with an email address in the retailer’s phone app. The phone app also has its Cartwheel program, that gives discounts to users. The new loyalty program gives shoppers 1% cash back on purchases, free Restock next-day delivery, a discount on first-year membership for online grocery shopping through Shipt, and a vote for which of a trio of local nonprofits would receive Target support.
In the future, Thomas said Target Red users would be able to apply for a store credit card. Retailers have long pointed out that shoppers with store-branded credit cards are among their best customers, but Target Redcard sales dropped in 2017 to just over 24% of sales.
But the test of Target Red doesn’t mean the retailer is abandoning its Target Redcard customers. “We're planning to develop more offers throughout the year that are only available to Target Redcard holders,” Thomas said. “Consumers have lots of choices, and we want them to choose Target.”