Report: AmEx's Plenti program faces rocky future as Macy's, other retailers flee
- American Express's Plenti loyalty program is in trouble after multiple retailers recently pulled out of the coalition, according to PYMNTS.com. Macy's was the latest major retailer to leave, citing the desire to revamp its broader loyalty strategy to focus on rewards over discounts. The department store said it will allow Plenti points to accrue until March 15, and customers can redeem points on purchases until May 3. After that, points can be redeemed at other Plenti partners.
- Plenti launched in 2015 to allow customers to collect loyalty points at a variety of retailers. Plenti operated independently from American Express' member rewards points. Merchants were exclusively chosen to represent a single category, so Macy's was the only department store involved. Other retailers that joined the program include Exxon-Mobile, Expedia and Chili's. Customers earned Plenti points when they made purchases, but the amounts varied by retailer.
- The high redemption rate, at $10 per 1,000 points, was one of the main reasons many retailers decided to leave Plenti. The program has also had three different leaders since it began.
Marketers love loyalty programs. They gather valuable customer data, track purchasing patterns and drive brand loyalty by offering customer discounts and other promotions that draw them back to the same store. But, American Express's problems with Plenti illustrate the fact that loyalty programs aren't one-size-fits-all, and the coalition approach works better for some brands than others.
The future of Plenti is unclear. With more and more retailers and brands leaving the group, along with the uneven point redemption system and unstable leadership, it appears that the program is on its way out if it doesn't see a restructuring soon.
Retailers and brands have better luck targeting consumers with personalized offerings that are targeted to customers, while fitting within a brand's strategy. The majority of consumers, 77%, participate in some type of loyalty program, according to Accenture data. Nearly 80% of consumers want brands to demonstrate that they understand and care about them before considering a purchase, as consumers reward brands that share their values and make their lives easier, a Wunderman study found. Even though loyalty programs are popular, millions of dollars in points and promotions go unredeemed each year.
Macy's and other retailers found initial success with Plenti, PYMNTS.com said. By the end of 2016, the department store had 36 million active members who had accumulated 40 billion points and redeemed around 90 million offers. But, the system was "asymmetrical." Consumers racked up points at grocery stores and gas stations, where it was easy to gather them, and used the points at Macy's and other retailers, which offered a wide range of higher-quality goods.