Sears Canada stretches loyalty program

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Sears Canada hopes to expand its fee-based loyalty program this year to a wider group of consumers, using a coordinated campaign of in-store materials, quarterly magazines, a unique Web site and e-newsletters.

The multichannel merchant has offered a fee-based loyalty program to the 50-plus consumer segment for years and recently introduced a separate program for young families. However, in 2007 the two will be combined and materials developed to determine whether opportunities exist to market a fee-based program to additional consumer groups.

"Typically a consumer who will pay $24.99 [to be part of a loyalty program] is a bonded customer," said Eric Schneider, president/CEO of Redwood Custom Communications, Toronto, which is developing the program for Sears Canada. "Being able to talk to that customer is important."

Redwood has worked with Sears Canada since 2000, when the custom publisher won the rights for New Outlook, Sears Canada's quarterly magazine for the 50-plus segment. After upgrading the publication's look and feel, Redwood was able to show that members now value New Outlook as much as they do member discounts.

For 2007, Redwood is to build an entire fee-based loyalty program with broad appeal that is positioned as an additional value to customers of Sears Club, which is the points-based program for all Sears credit cardholders.

One of Redwood's first steps will be to launch new in-store acquisition materials in April. The materials will be redesigned to "be more accessible and have a broader appeal beyond the 50-plus group," Mr. Schneider said. This will include letting consumers indicate their age group and interests.

Redwood and Sears Canada plan to use this information in a few ways. First, the information will let them better tailor communication to meet customer needs. They also hope to pick out additional consumer groups for which a separate loyalty program might make sense.

The materials will give "a lot more control to consumers to indicate interests and allowing Sears to react to those interests as opposed to two static programs that you are either in or not," Mr. Schneider said.

The quarterly magazine initially will be produced in two versions: one that is family focused and another for the 50-plus group. The editorial emphasis will be on lifestyle content and Sears merchandise that reflects the customer lifestage. In general, the publications "will be more aligned with the shopping experience than they have been historically," he said.

More versions could be added as Redwood and Sears Canada target other marketing opportunities. One likely segment is new households, young singles and newly marrieds. Magazine titles as well as the name of the overall loyalty program are still to be determined.

Redwood will develop a unique Web site for the loyalty program, replacing the existing one that is just for the 50-plus group. The new site will be versioned by member interests and contain more editorial content than previously. Nine e-newsletters for each topic will be published annually.

The materials being developed by Redwood across all channels will be integrated with the intention of creating "a whole lot more alignment between the program and sales uplift than there has been before," Mr. Schneider said.

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