Target on Tuesday said it will launch a paid membership program next month, riffing off the playbook of its rivals Amazon.com and Walmart, reports CNBC. The subscription-based program, Target Circle 360, will launch in early April and cost $99 per year. Target will offer a discounted rate of $49 per year as part of a promotion from its launch through May 18, then continue to offer the lower price to its credit card holders after that. The program will include unlimited free same-day delivery for orders over $35. Home deliveries will be powered by Shipt, a membership-based company that Target acquired in 2017.
Target is turning to premium loyalty as a new revenue stream to help it boost declining sales. While the retailer’s fiscal fourth-quarter earnings and revenue reported Tuesday beat Wall Street’s expectations, its comparable sales have declined three quarters in a row.
Total Retail’s Take: Target is following in the footsteps of other merchants that have launched paid loyalty programs, mostly to successful results. Paid loyalty programs offer high-level perks that keep customers coming back to shop, along with the annual fee that has them wanting to get “value” for their investment. The new Target Circle 360 membership program is competitively priced: Amazon’s Prime membership costs $139 per year, while Walmart+ members spend $98 to belong for 12 months.
In an interview with CNBC, Target CEO Brian Cornell said the paid membership program will encourage customers to place more online orders with Target. The retailer is hoping to boost its e-commerce business by enticing shoppers with free, fast delivery. Target is also revamping its existing free Target Circle loyalty program and credit card, previously known as Target RedCard.
“The changes reflect Target Circle members’ desire for an even easier and more personalized shopping and saving experience,” according to a company press release. As consumer loyalty remains fickle, retailers and brands need to place stronger emphasis on specialized perks to retain customers, while at the same time offering a range of options to fit every shopper’s needs.
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