Target Redcard

Topics: Credit card, Loyalty program, Wal-Mart Pages: 12 (4405 words) Published: January 28, 2013
Target’s REDCard

Executive Summary:

With Target being the second largest retailer, the hopes and dreams of being number one are not out of reach. By increasing the volume of existing and new customers and by adding value, Target will be able to see more loyalty from their guests. We wanted to develop a long term strategy that would attract new customers as well as retain and strengthen the already well established competitive advantage. The REDcard, with its current benefits, stands to promote customer loyalty, so we feel that by taking advantage of an already great program and making it a little better, it would increase value and the competitive advantage.

The Target REDcard’s current benefits include a 5% discount on practically every purchase everyday in the store or online. It also allows customers to withdraw up to $40 cash over the amount of their purchase, and with every 5 prescriptions a customer pays for with their Target debit card, they will get a 5% off shopping day which is on top of the 5% they already get by using their REDcard. Customers also have the choice of having Target donate 1% of the amount purchased with the debit card to eligible k-12 schools of the customer’s choice.

Our idea is to expand on the REDcard and make it more worthwhile to their customers, by adding a points reward system. Offering a points program to customers will draw in more traffic and increase revenue for Target. The program is a great way to maximize the value customers get when shopping at Target. Among this enhancement it will increase revenue and profitability by understanding and identifying customer buying habits, as well as reward customers for increasing their purchases. Research has stated that customers are more likely to spend more money in the store knowing they will get rewarded back for doing so. The points system would give one point per dollar spent, and as these points accumulate, the customer would be able to use these points as cash. We would also offer double points on seasonal, grocery, special brand name items, and the marginal sale items. In order to aid our customers in fully understanding how to fully utilize these new benefits, we would also need to have the Target Application for smart phones capable of scanning products to find out how many points that product would accumulate. The app. would also be able to tell the customer how many points they currently have on their REDcard, and what items are on promotion that day or week.

In order to make this profitable, we would recommend that Target increase the amount of advertising online, in stores, on television, and in the newspaper. Taking advantage of running advertisements and promotions during the high revenue months such as November and December would significantly benefit Target. Currently, the REDcard is not visible in the stores, it is hidden by the entrance on a wall that a customer would never look at. Also, large amount of verbal advertising in the store takes place at the registers, which unfortunately, customers do not have the patience or willingness to hear what the employee has to say. The process of opening a card is not suitable for the modern shopper. We would like to recommend a new process of opening a REDcard for the customers.

With the points program, addition to the Target application, and increased advertising and promotion, Target’s dream of being the number one retailer in the country is a goal they are very capable of reaching.

Table of Contents:

Situation Audit
Data Collection Methodology

Large superstores are all about customer loyalty and bringing in new customers. Our team has come up with a clever way to not only increase the volume of existing and new customers but to also create more a loyalty to Target. The Red card system as it stands adds a 5% discount simply by...
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