Can Macy’s New Star Rewards Loyalty Program Breathe Life Into Venerable Retailer?

Can Macy’s new Star Rewards loyalty program overcome sinking sales and profits and plunging net income and same-store sales that have shadowed the venerable retailer in recent years?

On Wednesday, officials at Macy’s announced the reinvention of the retailer’s loyalty program, Star Rewards. Using their Macy’s card starting Oct. 2, 2017, Macy’s customers can enjoy an even more engaging shopping experience at Macy’s stores and at

Macy’s new Star Rewards makes it simple for customers to receive benefits with every Macy’s purchase. Based on annual spend, customers with a Macy’s credit card will be automatically enrolled into one of three levels: Silver, Gold or Platinum. Rewards are tiered by level, with Macy’s best customers receiving benefits that include free shipping, additional savings and earned points on every purchase. Additionally, cardholders are automatically upgraded to the next tier when annual spend reaches the new level. The program was developed with the customer in mind, based on a careful analysis of evolving shopping behaviors and consumer preferences.

CEO Jeff Gennette said that Macy’s officials truly listened to their customers.

“Loyalty is a foundational element of our North Star Strategy, and stronger relationships increase the lifetime value of our customers,” he explained. “We are providing what matters most to her–an enhanced experience both in-store and online, edited and elevated products, compelling value, and an excellent loyalty offering.”

But will this new program be enough to turn the negative tide at Macy’s

Evan Magliocca, brand marketing manager for Baseman Insights & Marketing, told Loyalty360 that he is doubtful.

“The Macy’s credit card program definitely needed an overhaul and, while the Star Rewards program is a step in the right direction, it just seems very underwhelming considering the behemoths they need to compete within retail,” Magliocca explained. “You don’t beat Amazon by listing one of the Platinum tier’s benefits as a platinum-colored credit card. The benefits are also too complicated at first blush. Customers need to spend $1,200 for platinum and get 25 percent off one day with a specific coupon, 5 percent cash back and $10 in Star Money once they hit $200. It seems overly complex and they might see an issue with certificate redemptions as a result. This seems like more of the status quo from Macy’s.”

Here is a closer look at Macy’s Star Rewards:

Platinum: Customers who spend $1,200 or more annually at Macy's with their Macy's credit card will receive 25 percent off any day they choose with Star Pass coupons and free shipping on any purchase with no minimum spend. Customers will also earn five percent back in rewards on every purchase and, once they spend $200, will be issued $10 in Star Money that can be used immediately with no merchandise exclusions. Platinum cardholders will also receive an exclusive platinum-colored Macy’s credit card.

Gold: Customers who spend between $500 to $1,199 annually at Macy's with their Macy's credit card will receive 25 percent off any day they choose with Star Pass coupons and free shipping on any purchase with no minimum spend.

Silver: Customers who spend up to $499 annually at Macy's with their Macy's credit card will receive 25 percent off any day they choose with Star Pass coupons.

Stellar Loyalty CMO Narina Sippy told Loyalty360 that this is “definitely a move in the right direction for Macy’s, and with CEO support, it has the potential to deliver real business outcomes. Macy’s has zeroed in on the need to nourish its relationships with its most loyal customers. By taking a page from successful programs at upscale chains, the new Star Rewards program offers simplicity and differentiating value. It recognizes and rewards loyalty with status, special perks and VIP-type access versus the singular focus on deals. The strategy is on target.  It remains to be seen if the retailer can execute with the necessary speed and conviction to keep and grow its customer base.”

Rhonda Ekstrand, loyalty consultant at Kobie Marketing, told Loyalty360 that she believes Macy’s is moving in the right direction.

“It’s always smart to target your highest-paying credit card customers first when introducing new benefits, and even truer for a retailer where those customers make up about half of the annual sales,” Ekstrand explained. “They needed the move to free shipping to stay competitive with the perceived benefits of Amazon Prime.”

What’s more, Ekstrand said it’s “great that Macy’s is still saying that they will be evolving their program to provide offerings to non-credit customers, which will enable a broader reach and the ability to collect more member data. Other retailers in the industry such as Nordstrom, Bloomingdale’s, J.C. Penney, and Kohl’s have all moved in recent years to a program that rewards purchases with any form of payment. A multi-tender program can actually increase private label credit penetration because now you can identify the best prospects in your database. In fact, Kohl's saw a 10 percent penetration increase in their private label credit card from going to multi-tender. We look forward to seeing how they further evolve the program.”

Enhancements to Star Rewards will continue to be rolled out by Macy’s throughout 2018, including more experiential benefits where members can win access to unique experiences and rewards elements that only Macy’s can offer.

Macy’s customers will be notified of the new Star Rewards program beginning in late September through dedicated email and in-home mailers in addition to advertising in-store and online. What’s more, cardholders will be able to check their status and track their rewards on and via the Macy’s App.

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