Consumer Rewards Programs
Furniture World News Desk on
by Mike Rittler, Head of Retail Card Services, TD Bank
Amazon, one of the largest names in e-commerce and on-demand home delivery, is experimenting with the idea of brick-and-motor furniture stores. Recognizing that Amazon has historically been averse to retail locations, what does this tell us?
It might indicate that for larger purchases, customers still desire an in-store experience. Checking out the quality and comfort of furniture in person before moving forward with a costly purchase, remains a consumer priority, and understandably so. With buyers still interested in going to brick-and-motor stores, it’s worth considering what can be done to ensure they go to your store.
Customer loyalty programs are a strategic option to ensure new customers become consistent buyers, and that frequent shoppers are rewarded for coming back. Yet a TD Bank poll of 101 furniture retailers at the recent High Point Market, indicated that only 45 percent of furniture retailers offer customer loyalty programs.
This is surprising, especially since of the 45 percent of respondents who offer customer loyalty programs, just 2 percent anticipate their sales to decline in the next quarter – demonstrating the effectiveness of these types of rewards programs in creating repeat customers. Taking insights from our data a step further, we could also say that having and maintaining programs that encourage consumer loyalty correlates to strong sales figures.
But loyalty programs aren’t a one-size-fits-all solution. Employing the same perks found at a clothing or grocery store would likely miss the mark in terms of driving customers to come back for repeat purchases. For most customers, furniture is purchased infrequently when compared to other consumer goods, so a rewards program needs to be designed specifically for this customer set. Programs should demonstrate value to the customer in a different way in order to be successful. For example, offering low- or no-interest financing programs, or significant money off on a suite of furniture demonstrates value to shoppers through long term savings and immediate discounts.
As expected, TD Bank’s data from the High Point Market survey indicates that the top priorities for furniture store loyalty programs are discounts on future purchases, extended warranties and the availability of in-store credit. These features are vital in maximizing the relationship between a brand and their customers, ensuring customers walk back in the door and have a reason to shop with that specific retailer the next time they need to purchase furniture.
With that in mind, a solid rewards plan, whether offered in the form of an in-store credit card or part of larger benefits program, should try and provide some combination of these features in order to ensure the customers feel that the program offers real value.
Beyond addressing the needs of your specific customer base, it's critical for retailers to find a partner who will tailor services to fit your organization. When tapping a bank or other financial institution to configure a program for your store, customization and flexibility are key. Look for a partner that has experience, bandwidth to grow, offers new technology and is willing to create a program just for your organization. The value proposition of a strong rewards program should be valuable to the customer in terms of rewards, but equally valuable to the merchant when it comes to creating positive customer experiences and generating repeat business.
Knowledge of a store’s own customers will be a differentiating factor in designing a successful loyalty program. A credit program may be important to a store with buyers who prefer that method of purchase, while a cash-back program may be important to another. Retailers of all sizes—from large chains to Main Street/family owned operations—should look for a loyalty program provider that can meet their unique needs. Having a well-crafted program is the best way to ensure customers don’t just return, but continue coming back satisfied.
More about TD Bank: TD Cards and Merchant Solutions is a top 10 card issuer in North America with over $24B in card receivables. TD Bank's credit cards are distributed nationally, leveraging our retail distribution network, direct response channels and through hundreds of partnership programs with financial institutions, retailers and other third party organizations, including private label financing. For more information on TD Bank's programs and services for home furnishings retailers, Click Here.