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4 Ways The Demise Of Plenti Will Go On To Reward Shoppers

(Photo by Mighty Travels/Plenti via Flickr)

 

The points may soon expire, but members of the folding Plenti rewards initiative could benefit from some pointers the beleaguered program will likely leave behind, especially for retailers.

Plenti, launched in 2015 by American Express, will end operations in July after losing several key merchant partners and failing to gain traction among American consumers. The program, the first of its kind in the U.S., is based on the coalition model of loyalty initiatives common in other countries, through which members earn rewards from a network of partner companies and then redeem those points however they wish across the same network.

But by January, several of Plenti’s partners, including Macy’s, Hulu, AT&T, Nationwide, Enterprise, Alamo and Expedia, had dropped out. The cause could be traced to both a lack of awareness and inactivity — despite national advertising campaigns by Plenti and its partners. Only half of consumers were familiar with the program, according to research by Maritz Motivation Solutions, a loyalty program provider. Also, of Plenti’s members, less than half said they had redeemed a reward — most only purchased from one or two Plenti partners.

In April, Plenti stopped taking subscribers.

The passing of Plenti may suggest that U.S. consumers and merchants aren’t ready for a model that has been successful in many foreign markets. But its failure has more to do with the success of the loyalty industry in the U.S. overall, and among retailers in particular. In this respect, shoppers may actually experience ongoing benefits from Plenti’s demise.

Before exploring those perks, let’s review what went wrong for Plenti.

Why It Failed

In its first year, the Plenti program appeared promising. By 2016, it counted 36 million active members and was adding new partners, including Chili’s. But in the summer of 2017 AT&T pulled out. Macy’s followed in February, after introducing its own currency-neutral Star Rewards program. Among the factors that contributed to Plenti’s inability to latch on:

  • It’s a big country. High geographic fragmentation among U.S. companies, particularly high-frequency retailers such as grocers and gas stations. Even some of the largest companies in the coalition do not operate in all 50 states.
  • It’s a mature industry. Many U.S. brands are already invested in their own loyalty programs and have mature databases of shopper insights. Moreover, U.S. companies are protective of sharing these insights with other companies, which is an essential component of a successful coalition.
  • It wasn’t familiar. The value of the Plenti program was not well understood. Shoppers apparently didn’t recognize the value of the program, found it cumbersome or felt they had to wait too long for rewards.
  • Its brands had limited appeal. Lastly, Plenti would not allow competing brands from the same industries and same regions to participate if other existing partners objected. This limited brand participation, which in turn curbed geographic reach and consumer appeal.

4 Lessons Gleaned From Failure

These causes for defeat could, however, be parlayed into positive shopper experiences. Assuming retailers have been watching Plenti unfold (and then fold) closely, shoppers could expect to benefit from these four takeaways, which hopefully will become part of the shopper experience.

  1. More tender-neutral programs. Unlike traditional loyalty programs, coalitions are tender-neutral, meaning members can pay by credit card, cash, mobile wallet or check. Macy’s is the latest to pick up on the appeal of this payment flexibility and in February announced members of its relaunched Star Rewards program could pay for purchases using other credit cards. Since Macy’s announcement, Target followed suit, introducing its Target Red program, which rewards shoppers no matter how they pay. Both chains follow Nordstrom, which in 2016 changed its rewards program to be tender-neutral. More card-based reward programs are likely to follow.
  2. Better-targeted offers. One of the challenges of operating a portfolio of many merchants is delivering member communications that come across as personalized and relevant. True, most U.S. retailers have been operating their own loyalty programs for years. However, not all are adequately equipped to respond quickly to the changing tastes of localized customers. The threat of a coalition program such as Plenti should have motivated retailers to direct more resources to shopper analytics so they could connect more effectively, more frequently and with greater relevance. Think of rewards linked to a professional sports team before a big game, or to seasonal events.
  3. New kinds of partnerships. Plenti’s model may not have worked, but retailers may still explore elements of it, such as unlikely partnerships. The key is aligning with at least one partner that has high appeal and/or frequency, to broaden the scope of enrollments. The evolution of shopping malls into communities of across-the-board services could facilitate unexpected retail alignments, such as with doctors’ offices, day spas or tax services. Think of partnerships that generate rewards for using a particular CPA (and spending that tax refund with the partner retailer), or for visiting a movie theater that operates in the same shopping center as the retailer.
  4. Faster rewards. One of the selling points of coalition programs is they enable members to earn rewards faster, since they have so many more opportunities to spend and earn. I know from experience that collecting enough points for a free flight would generally take less than half as much time through a coalition program than through a credit card-only points initiative. Retailers that offer their most appealing rewards faster would likely stand apart. It doesn’t have to be all the time — bonus periods when hot rewards can be earned with fewer points, or when points double, drum up a sense of urgency and excitement that gets members involved.

Similarly, retailers should think like coalitions and get more creative in their reward options. Instead of “stuff,” they should offer services that make the shopping trip more enjoyable. The goal, after all, is to get the customer into the store (either physical or digital).

Plenti members have until July 10 to use their earned points. In the interim many will likely consider what the real value of a coalition program is. If retailers take note from Plenti’s failures, they may be able to deliver on them.

 

This article originally appeared in Forbes. Follow me on Facebook and Twitter for more on retail, loyalty and the customer experience.

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