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Loyalty Limelight: Canadian Tire Shifting Gears

The program: Canadian Tire Money loyalty program

In a nutshell:  Founded in 1922, Canadian Tire Corp. is one of Canada’s leading general merchandise retailers, with more than 1,700 locations nationally. Its Canadian Tire Money program is Canada’s oldest loyalty plan, issuing paper rewards money for 54 years, and now to 5 million members.

New features: Canada Tire is expanding on its well-known Canadian Tire fake currency and adding plastic, with a test of the Canadian Tire Money Advantage card. Launching as a pilot in Nova Scotia Feb. 24, the Money Advantage loyalty card earns its customer improved rewards for purchasing Canadian Tire products using cash, debit or credit. In the test, cardholders will receive 1 percent rewards on their purchases and 3 percent rewards on purchases made on the retailer’s Options MasterCard. They can still use their old Canadian Tire Money, which earns 0.4 percent rewards on purchases made with cash or debit, or 2 percent for purchases on the Options card.

Takeaways: The expansion into the 21st Century is welcome, but with a program as well embraced as Canadian Tire’s, I can understand its caution towards change. The company plans to run the test for a full year before deciding whether it should be rolled out nationally. Here are the clear benefits and considerations:

* Data: By switching to an electronic card, Canadian Tire will be able to gather insights on its individual customer’s preferences and purchase patterns. This will enable the retailer to better segment is customer base, identify its best shoppers and market to each based on relevance.

* Value Exchange: While Canadian Tire will clearly benefit from its customer data, it needs to provide something of equal value in return. The stepped-up rewards will be part of it, but Canadian Tire also has to connect with its consumers in ways that resonates. In short, Canadian Tire must demonstrate that it is using its customers’ personal information to enhance the shopper experience.

* Responsibility: All of that data comes with tremendous responsibility, in the collection, storage and use of it. Following a year when consumer data breaches affected more than 100 million people, Canadian Tire should have air-tight-as-possible protection and response procedures in place, with clear guidelines for its employees to follow.

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