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Loyalty Limelight: Kohl’s Yes2You Rewards

Loyalty Limelight (light)-01The initiative: Yes2You Rewards, by Kohl’s

In a nutshell: Kohl’s on Oct. 6 changed its loyalty program from Kohl’s Rewards to Yes2You Rewards, a currency neutral, customer-loyalty program that rewards at a rate of 5% on spending in-store and online. The Wisconsin-based department store chain operates 1,163 stores in 49 states.

Kohl’s has been testing variations of the program for two years and enrolled more than 10 million members in the pilot phase, Michelle Gass, Kohl’s chief customer officer, said in a press release. “We are inspired by our customers and want to create personal connections to thank them for all the ways they interact with our brand,” she said in the release.

New features: Yes2You members earn one point for every dollar they spend, regardless of how they pay, with 100 points (or $100 spent) equaling $5 in rewards. Other features include:

• An annual birthday gift, plus eight special savings offers throughout the year and opportunities to earn bonus points.
• Members can transfer Yes2You Rewards points to family and friends also enrolled in the program or donate them to the Kohl’s Care initiative in support of children’s health and education programs.
• Kohl’s expanded its mobile wallet, so Yes2You Rewards members can track, redeem and share points.
• The company teases at surprise rewards, but leaves little additional information (“We would tell you more, but that would ruin the surprise!”).

Participation requires a valid email address, through which offers are sent. Members can also view accounts by logging into a mobile app or kohls.com account with a valid email address. Rewards expire after one year, and if the account has not been used in a year, it is drawn back to zero.

The Takeaways: Kohl’s operates its own charge platform, so I imagine the two years invested in testing variations of the program were aided by a rich database of consumer insights. The fact that it gained 10 million enrollments in the pilot phase is evidence that Kohl’s messaging and targeting are effective (existing members of Kohl’s Rewards automatically roll over).

I also like the high earn rate of 5%, which outpaces many national credit card programs and is how brands have been trending. The Orbitz Rewards Visa, for example, gives members 7% and 10% back on flight and hotel bookings, respectively, if the purchases are made on the Orbitz Rewards app. I’d like to see Kohl’s consider similar options, where rewards escalate with the level of engagement.

There are a couple of minor uncertainties:

• Kohl’s pledges to use customer insights to deliver “additional incentives and surprises that are personally relevant,” but it provides little information about what these surprises will be. The company will need to clearly connect the “surprises” to the customer’s actual activity to demonstrate its delivery on this commitment.
• Points post to a program account about 48 hours following the purchase date, delivery date or shipment date. At a time when consumers are increasingly demanding real-time rewards, two days may seem like a long lag time for a proprietary program.
• The program gets an “A” for simplicity, but I’d be interested in seeing more of how it actually engages. Little is said about how the app operates, for example, or if the rewards portfolio includes experiential perks, such s early access to sales. Perhaps this is part of the “surprise” element.

Kohl’s Yes2You has a catchy name and an evidently sizable database behind it; I am encouraged by its potential to guide advancement in loyalty marketing. But retail is a brutal field with competitors such as Macy’s consistently investing in omni-channel strategies and testing same-day delivery. In the end, the consumer will decide.

 

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