Target Is Testing a New Loyalty Program

Target is testing out a new loyalty program, Target Red, which would offer customers cash back and discounts on delivery.

As part of the program, Target Red members would receive 1% cash back on purchases that they can redeem on their next visit, free next-day delivery with Target Restock and half off a Shipt grocery delivery membership. Currently the program is only being tested in the Dallas-Fort Worth area, and it is an entirely different program than Target REDcard, which offers customers a Target debit or credit card.

Target REDcard members can sign up for Target Red, but they will not be able to stack the 5% REDcard discount with the loyalty program's 1% cash back.

Still, Target Red members would save $4.99 in shipping on every Target Restock order. Restock is one of the retailer's online shopping platforms that lets customers fill up a box of everyday household necessities and ship it at a flat rate.

Members of the new program would also save about $50 per year on a membership for Shipt, which Target acquired in December 2017 for $550 million. Shipt delivers groceries from several different stores (including Target). The service usually runs $99 per year, and Target Red members get 50% off the subscription fee.

The test run of the new program comes at a time when many retailers are trying to compete with Amazon's online grocery service and Prime's two-day shipping policy, and as brick-and-mortar stores are trying to increase the number of customers walking through the door.

This isn't Target's first crack at a loyalty program. In 2016, the retail chain tested its Cartwheel Perks program, which converted customers' purchases into points that could be redeemed on other specific items. The program was seen as too complicated, and Target scrapped it.

As an added perk, members of the loyalty program will also be able to vote for which local organizations receive charitable donations from Target.

H/T: Tech Crunch