Since March, Target has been quietly testing a new loyalty program for its members in Dallas. The program, called Target Circle, will now debut in five cities on Feb. 19, according to a report by CNBC.
Those five cities are: Phoenix, Kansas City, Indianapolis, Denver and Charlotte, North Carolina. The program is free to sign up for and offers benefits like a 1 percent return on all Target purchases and a special birthday reward.
The rewards will be selected based on a customer’s shopping preferences, and could be clothes, groceries or electronics.
Other perks of the program include free delivery with Restock, a program where customers can put items like bread or shampoo, up to 45 pounds, in a box. Loyalty members also get half off a year-long membership to same-day delivery service Shipt, which Target acquired for $550 million about a year ago.
However, the retail giant is taking the program one step further, by allowing loyalty members to select a local nonprofit to donate to. In Dallas, customers have donated about $250,000 to 50 different nonprofit organizations.
"We wanted a program that was ... not just about collecting points to get savings," said Rick Gomez, Target's chief marketing and digital officer. "We think this is a much bigger platform to build relationships with our guests."
Gomez said the company wants to make sure it gets the program right before rolling it out across the country.
"I think this strategy is a way for us to grow," Gomez said. "Americans love loyalty programs."
Research shows that almost 40 percent of customers who claim to be loyal to a brand will spend more time there, regardless of whether they can find something cheaper somewhere else. Also, 52 percent of loyal customers said they’d be willing to join a rewards program if they had the option to do so.