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Topic: New Canadian Tire loyalty program may challenge iconic paper tender  (Read 3261 times)
BWJM
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New Canadian Tire loyalty program may challenge iconic paper tender

--- [Original Article] ---

[imga=right]http://financialpostbusiness.files.wordpress.com/2012/02/loyalty-card-key-fob1.jpg?w=620[/imga]TORONTO • Canadian Tire Corp. says it will not get rid of its iconic Canadian Tire money when it rolls out a new loyalty program next week on a pilot basis at 21 Nova Scotia stores.

But even the most hard-core lover of the coupon tender, which after 51 years still features tam-wearing Scotsman Sandy McTire as the cartoon symbol of consumer frugality, may find it hard to resist the lure of a better deal.

The new Canadian Tire Advantage card offers 1% back, or one point per dollar on the value of purchases, whereas the rate for Canadian Tire paper money is 0.4%.

“For those that sit down and do the math, they’ll come to that conclusion,” said Rob Shields, senior vice-president of marketing and customer, noting that while many customers are still attached to using the “money” coupons, they want more convenient options and to collect rewards through different platforms. Those using the new card in conjunction with the company’s proprietary credit card, the Options MasterCard, will accrue three points for every dollar spent.

“This program really compliments the credit card more than the paper base,” he said. “From a customer standpoint, the value creation for them is very good.”

The pilot launch begins Feb. 24 at the retailer’s Nova Scotia stores and gas bars and allows members to accrue points on a loyalty card or key chain fob.

Mr. Shields said Canadian Tire’s customer research indicated that if the retailer provided more value with a new loyalty card program than Canadian Tire money does to customers currently, that it would be better received.

“But as you know the paper-based program is highly emotional, it has terrific brand presence and brand link and the tangible nature of it some people just love,” he added, insisting that the new loyalty program is not aimed at phasing the paper coupons out, but that “It’s very much in keeping with what they know and love about other loyalty programs.”

Another incentive: Canadian Tire paper money, which can be applied towards money off purchases at the till, is currently dispensed to customers who pay with cash and debit or on the retailer’s Options MasterCard. The new loyalty card will tally points on all purchases, including other credit cards. Like the paper money, members can also donate their points electronically to Canadian Tire’s Jumpstart charity and other eligible community groups. As with the paper program, there are no spending thresholds and no expiry dates in Canadian Tire Advantage.

Rumours that Canadian Tire has tried to phase out the paper money over the years are merely speculation, Mr. Shields said, and in the years since its inception many more sophisticated programs have come into the market.

Canadians nevertheless have proven to collect and use the retailer’s coupons tenaciously over time. Of the $100-million doled out annually to customers in Canadian Tire money through both paper and credit card points, virtually all of it is redeemed each year, Mr. Shields said.

Loyalty is a big business in Canada. Maritz Canada Inc.’s 2011 loyalty report said 94% of Canadians belong to at least one loyalty program. As loylaty programs go, the country’s oldest one is in need of a revamp, experts say.

“If they want to compete, the fact of the matter is their program is not only old but ancient,” said Ed Strapagiel, executive vice-president at KubasPrimedia, a Toronto market research firm. While a decade ago Canadian Tire money was at the top of the pack, the most recent Major Markets Retail survey from KubasPrimedia in 2011 found that Air Miles has now usurped the retailer as the top loyalty program in Canada, with 79% of survey respondents enrolled in it. Canadian Tire Money was tied in second place with HBC Rewards, at 56%, followed by Shoppers Optimum at 54% and Aeroplan at 44%.

“I don’t think there is a household in Canada without some Canadian Tire money in it,” Mr. Strapagiel said.

“What [consumers] do not like about Canadian Tire money is that the accumulation [involves] more work than a card and it slows you down at the cash register. The people who love it are typically older and are very loyal Canadian Tire shoppers anyway.”

A new group of consumers is looking for something different, he added. “Canadian Tire’s takeover of Forzani [sporting goods chain], for example, can bring them in contact with younger consumers … and they don’t care about Canadian Tire money.”

A more complex loyalty program would also better position Canadian Tire against existing competitors and the threat of Target, which will launch its Red Card loyalty program immediately when it enters Canada next year. Kubas Primedia research notes 8% of Canadians already have a Target Red Card.

More important, it will offer Canadian Tire some much needed data that other companies, such as Shoppers Drug Mart and its Optimum program, have been mining for years. “This is all about [chief executive Stephen Wetmore’s] vision of being a customer-centered organization,” Mr. Shields said.

“Being customer centered would lead you to, who are our customers? Who are our best customers? What do they do? Where do they live? How do they shop? What do they love and not love?

“Loyalty programs are the most ubiquitous way that a retailer can actually start to understand who their customers are, how different they are and [to] segment them … As a universal loyalty program across all tenders, we are going to be capturing upwards of 70% of our transactions on a known customer basis. Today we know about our credit card customers only — everybody else is anonymous to us.”

The new program will also offer exclusive bonus points on products in its weekly flyer and in the store. There are no current plans to offer other redeemable rewards on a website for the loyalty program, like the Air Miles program does, said Mr. Shields, and no current plans to include the Forzani sports stores such as Sport Chek in the program, but that could be considered in the future.

The pilot test will eventually roll out to other regions of Canada once the company determines its business objectives have been met, Mr. Shields said.

“We have got a whole set of metrics to look at. We are going to run it [as a pilot program] until we have a very solid view on its success across all those metrics. Typically these pilots are in market at least for a year to ensure that [the program] works over the course of time.”

BWJM
Member of CPMS, RCNA, ONA, ANA, IBNS, WCS.
Treasurer, Waterloo Coin Society.
Show Chair, Cambridge Coin Show.
Fellow of the Ontario Numismatic Association.
BWJM
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« Reply #1 on: February 15, 2012, 10:49:56 am »

As a collector of Canadian Tire Money and a member of the Canadian Tire Coupon Collectors Club, I'm not sure how much I like this program.

If the returns generated by this program were equal to the returns offered in the traditional paper form, I would be more agreeable towards it, but there is a 2.5x difference.  The company is overtly saying that they have no intention of killing the coupons, but with a huge differential in the returns, it is going to dangle a pretty big carrot in front of their customers to get them to switch.  Fast forward a few years when the vast majority of customers are collecting points instead of coupons and management will have a pretty easy case for dropping the axe on the coupons.

I am also curious to know how this will affect the "multiplier" coupons offered for gas purchases.

Finally, I don't think it was mentioned in the article, but the redemption rate will be a good question... You may earn points at 1% (or 1 point per dollar), but that's only meaningful if they are redeemable at 100 points per dollar.  (ie: 500 points gets a $5 gift card).

This should make for an interesting discussion at the CTCCC meeting this coming Saturday morning at the Torex show in Toronto!

BWJM
Member of CPMS, RCNA, ONA, ANA, IBNS, WCS.
Treasurer, Waterloo Coin Society.
Show Chair, Cambridge Coin Show.
Fellow of the Ontario Numismatic Association.
Tom-Bear
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« Reply #2 on: February 15, 2012, 03:05:40 pm »

I will certainly not be signing up for this new CTC program. Firstly, of course, because I've always enjoyed collecting the coupons, but also because the customer data will be used for data mining purposes, as they so candidly admit. To me, it is just another example of the erosion of one's privacy.
It seems to me that Canadian Tire already does know their customers quite well, or it wouldn't be such a thriving business.  It seems transparently obvious that they are only after building a database that they can mine and sell.

simpson105378
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« Reply #3 on: October 28, 2014, 06:36:12 pm »

The Sherwood Park, AB gas bar is now pushing the “CARD”.

This card has finally extended its tentacles all the way from Nova Scotia and is in Alberta.

So it now begins.   
Where I say..yes I know about the card, no I don’t want it and then say coupons for me please.

It’s alive and on the move. 
Will it now finally kill off the coupons? 

Only time will tell...
 

simpson105378
jay4e
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« Reply #4 on: October 30, 2014, 08:56:58 am »

Canadian Tire (the corporation) has re-iterated time and again that they will continue to issue Paper Canadian Tire Money to every customer who wishes to have it, instead of the new eMoney.

As part of the Executive of the CTCCC, I was issued a Platinum "My Canadian Tire Money" card along with other enticements to get me to switch over.  Their new campaign slogan "My Canadian Tire Money - collecting just got easier" is aimed at the 85% of the public that does not "collect" Canadian Tire Money.  As the collecting population grows older, with no relief from the younger generation, who are tech savvy and are comfortable with credit and debit cards and online banking, I believe eventually that the CTC paper money will die a long slow death. The longer and slower, the better.  I also believe that it will not have a negative effect, any worse than the aging process is having now, on Canadian Tire Collectors.

I have spoken to a few Canadian Tire dealers and they have all said to me that customers are redeeming their CTC Paper Money at an alarming rate, akin to a run on the bank, afraid that their money will be worthless if discontinued. Dealers are having this new program "SOLD" to them by the corporation very aggressively.  The majority of the dealers are, like the members of the Collectors Club, older and they like us, were brought up on Canadian Tire Money and would also like to see it hang around.

As so aptly stated by Andrew "Only time will tell..."
« Last Edit: October 30, 2014, 08:59:18 am by jay4e »


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Seth
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« Reply #5 on: October 30, 2014, 09:45:48 am »

In my mind, CT money is already dead.

We used to get $3.00 CTM back on a $60 purchase. That went down to $1.80, then to 80¢. Now we only get 30¢.

It's hardly worth the trouble or bother anymore.

Track your Canadian currency online!

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PaperorPlastic
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« Reply #6 on: October 30, 2014, 04:28:07 pm »

I have spoken to a few Canadian Tire dealers and they have all said to me that customers are redeeming their CTC Paper Money at an alarming rate, akin to a run on the bank, afraid that their money will be worthless if discontinued.

   This may explain why I have been seeing more of the slightly older coupons from the 1980s which is different than the current design.  It could be from more people cleaning out their drawers.  As long as that money still circulates I'm ok with that  :)

  And I don't know if it applies elsewhere too but the gas multiplier coupon that comes in the weekly flyer has also been redesigned a bit.  More space is being designated to promote the cards on them.  This is in Quebec so I don't know if its the same in Ontario and everywhere else that has the same system for the gas stations.

jay4e
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« Reply #7 on: November 02, 2014, 07:02:53 am »

In my mind, CT money is already dead.
We used to get $3.00 CTM back on a $60 purchase. That went down to $1.80, then to 80¢. Now we only get 30¢.
It's hardly worth the trouble or bother anymore.

Canadian Tire is reverting back to the original purpose of Canadian Tire Money (CTM) back in 1958 when they first released CTM and that was "give it to our gasoline customers to bring them to the store".  Notice today Nov.1st, 2014, they have a 15 times multiplier coupon which means that you can get 75¢ for 20 litres instead of 5¢.  Back in the 90's they were giving out 3 times multiplier coupons.  This is the first time in their history that they have gone to 15 times.  At the store, the issue rate is 40¢ per $100.00 dollar purchase.  And now with their new "My Canadian Tire Money' cards they are encouraging customers to go with the "e-money" rather than the paper CT money.  This is so they can keep tabs on your spending habits.  They cannot do that with the paper CT money.

Back in 1958 we were in a cash society, CTC was set up to deal with cash and not credit.  Today we are in a digital era and they would like everyone to revert to the digital era.  Handling "cash" costs more money than handling electronic cash!


Some days you're the bug and some days you're the windshield!
 

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