Marketing experts divided on whether or not the strategy will work
Canadian Tire Corp. has rolled out a new fee-based subscription tier as part of its Triangle Rewards loyalty program.
The retailer said Monday the subscription, which will cost $89 a year plus taxes, is an upgrade to its existing rewards program that will deliver "even more value to customers."
Members who pay for Triangle Select status will be able to earn CT Money faster through "stackable, bonus rewards" on eligible purchases at its stores, including Canadian Tire, Mark's, Sport Chek, Sport Experts and Party City, the company said.
Subscribers will also receive a "welcome gift" valued at $50, online shopping perks and, for a limited time, a six-month subscription to the streaming service Crave.
"In a year where customers are spending more purposefully, the Triangle Select program offers Canadians a new way to stretch their dollars and earn even more rewards on their everyday purchases," said Jason Blanchette, senior vice-president of loyalty and customer insights at Canadian Tire Corp.
The company's beta testing of Triangle Select showed the average member's annual incremental earnings through "select-specific bonuses" came to more than three times the subscription fee, he said.
Rewards programs have become increasingly attractive to retailers in recent years as a way of tracking customer data and encouraging loyalty.
While many stores have launched loyalty programs in recent years, few offer a fee-based subscription model.
Amazon Prime has been available in Canada since 2013, offering benefits such as one- to two-day delivery and access to Prime Video. The current price is $9.99 per month or $99 for a year's subscription.
In 2019, Indigo launched its Plum Plus subscription program for loyalty members, offering 10 per cent off most products and free shipping, in addition to VIP access to promotions, at an annual cost of $39. That runs in tandem with a free version of the program offering fewer perks.
The move followed Loblaw's introduction of its PC Optimum Insiders program the year prior, which it has since hiked from the initial $99 annual cost to $119.
Retail expert Lisa Hutcheson said rewards programs allow companies to learn about their customers' shopping habits in exchange for perks.
However, she questioned the fee associated with the Canadian Tire program.
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She predicted uptake will be limited to a "select group of people" who determine the extra rewards are worth the annual $89 cost.
"We're coming to a time in which people are really starting to evaluate all the subscriptions. They're sort of getting subscriptioned to death," said Hutcheson, managing partner at consulting firm J.C. Williams Group.
"For certain shoppers, I think it's going to be worth the $89. But I think people are going to do the math and say 'Is this worth it to me?"'
She noted that as part of the Triangle Select model, up to $12 in shipping fees per order will be reimbursed in CT Money on members' first five Canadian Tire ship-to-home purchases.
"I kind of think they've missed the mark on that because other retailers, if you either have a subscription or they have information on you on their mailing list as part of some sort of program, it's usually unlimited," Hutcheson said.
But retail analyst Bruce Winder said the program has the potential to strengthen loyalty to Canadian Tire's numerous brands.
"It creates a built-in incentive to shop there," said Winder.
"If you're one of their customers and you pay a fee, you're going to feel like you really should shop there first."
He praised the timing of the program, suggesting customers could benefit from greater value as Canada potentially enters a recession. Winder also noted Triangle Select offers a "sweetener" as it relates to their online operations to make Canadian Tire more competitive with Amazon.
But he acknowledged such loyalty programs force consumers "to pick a camp," which may not always be preferable when shopping.
"Some consumers want to price hop around, but that's probably not the consumer Canadian Tire is looking to pick up. They're looking to pick up that loyal consumer who's a little less price-sensitive," Winder said.
"But there's only so many of these (subscriptions) you're willing to pay for. Probably after two or three, I can't see consumers paying for more than that."
Credit belongs to : www.cbc.ca