CIRCUIT CITY started its own REWARDS PLAN!
10-08-04, 11:46 PM
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CIRCUIT CITY started its own REWARDS PLAN!
CIRCUIT CITY DEBUTS REWARDS PLAN
Points program follows Best Buy's Reward Zone
By Eliza Gallo 10/8/2004
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OCT. 8 | Consumer electronics retailer Circuit City has launched its first customer rewards program, following the lead of retail rival Best Buy, which introduced the successful Reward Zone program last year.
The Circuit City program could have a strong appeal to home entertainment consumers, officials believe, as the chain prices its DVDs and compact discs low. So it would seem reasonable to expect a swell of customers hitting department shelves with a brand new reward certificate in hand.
"It's one of the less expensive items in our stores, so it definitely lends itself to becoming the purchase that you use these things on," a Circuit City spokesman said. "It really wouldn't take a whole lot to get up to a $20 level. You're looking at the purchase of a TV, really."
Circuit City's entry takes the form of the Circuit City Rewards Visa Card from Chase, which will earn users points for 5% of purchases made at the chain's stores or Web site and 1% of other purchases. Once they have amassed 500 points, customers are entitled to a $5 reward certificate to be used at Circuit City.
The company spokesman said the new initiative is not a direct reaction to Best Buy's program, which accumulated roughly 4 million members in the space of a year.
"We didn't roll this out to compete with anybody in particular or to try to take customers from anyone in particular," he said. "It's something we've been working on for a long time."
However, analyst Frank Brown of SunTrust Robinson Humphrey Capital Markets paints a different picture.
"I think that they've spent a year watching Best Buy's experience," Brown said. "I don't think they were hard hit by Reward Zone's launch, but I think they felt it a little bit in market share."
Best Buy's program was such a hit that it even had a slightly negative impact on the company's profit margin, due to the number of customers redeeming reward certificates, the analyst noted.
"They said that the sign-ups were greater than they expected," Brown said. "But they've also been hugely successful. When you see the number of Reward Zone customers that have built over the last year, it's really impressive. I do think it's important that Circuit City match what Best Buy had out there. I think it's going to close a competitive disadvantage that they had in the marketplace."
Differences in the two loyalty programs might appeal to different consumers. For instance, Best Buy's program costs $9.99 per year, while the Circuit City card has no annual fee. Best Buy initially offered a 4% return rate, but this week reduced it to 3.3%, so that members can get a $5 certificate for every $150 spent; Circuit City's 5% yield means that it takes only $100 spent to get a $5 certificate.
"To the extent that Circuit City puts a 5% number out there, it's got flash to a consumer," Brown said.
In addition, Best Buy grants points for purchases made with promotional financing, while Circuit City customers can receive points or financing but not both.
"If promotional finance is really important to somebody, they're not going to make the change," Brown said. "But I'm not sure a lot of customers will care about it." Also, he feels that the newness of Circuit City's program will give it buzz. "They could get a little pop there," he said.
Circuit City's rewards program is one of several marketing initiatives underway, ranging from a Web site revamp to new ad campaigns.
"It's one of many steps that they've made in the last year that have shown that the company is serious about increasing initiatives to drive the top line," SunTrust's Brown said. "Taken together, they just show that the turnaround at Circuit City is on track."
source
videobusiness
Points program follows Best Buy's Reward Zone
By Eliza Gallo 10/8/2004
--------------------------------------------------------------------------------
OCT. 8 | Consumer electronics retailer Circuit City has launched its first customer rewards program, following the lead of retail rival Best Buy, which introduced the successful Reward Zone program last year.
The Circuit City program could have a strong appeal to home entertainment consumers, officials believe, as the chain prices its DVDs and compact discs low. So it would seem reasonable to expect a swell of customers hitting department shelves with a brand new reward certificate in hand.
"It's one of the less expensive items in our stores, so it definitely lends itself to becoming the purchase that you use these things on," a Circuit City spokesman said. "It really wouldn't take a whole lot to get up to a $20 level. You're looking at the purchase of a TV, really."
Circuit City's entry takes the form of the Circuit City Rewards Visa Card from Chase, which will earn users points for 5% of purchases made at the chain's stores or Web site and 1% of other purchases. Once they have amassed 500 points, customers are entitled to a $5 reward certificate to be used at Circuit City.
The company spokesman said the new initiative is not a direct reaction to Best Buy's program, which accumulated roughly 4 million members in the space of a year.
"We didn't roll this out to compete with anybody in particular or to try to take customers from anyone in particular," he said. "It's something we've been working on for a long time."
However, analyst Frank Brown of SunTrust Robinson Humphrey Capital Markets paints a different picture.
"I think that they've spent a year watching Best Buy's experience," Brown said. "I don't think they were hard hit by Reward Zone's launch, but I think they felt it a little bit in market share."
Best Buy's program was such a hit that it even had a slightly negative impact on the company's profit margin, due to the number of customers redeeming reward certificates, the analyst noted.
"They said that the sign-ups were greater than they expected," Brown said. "But they've also been hugely successful. When you see the number of Reward Zone customers that have built over the last year, it's really impressive. I do think it's important that Circuit City match what Best Buy had out there. I think it's going to close a competitive disadvantage that they had in the marketplace."
Differences in the two loyalty programs might appeal to different consumers. For instance, Best Buy's program costs $9.99 per year, while the Circuit City card has no annual fee. Best Buy initially offered a 4% return rate, but this week reduced it to 3.3%, so that members can get a $5 certificate for every $150 spent; Circuit City's 5% yield means that it takes only $100 spent to get a $5 certificate.
"To the extent that Circuit City puts a 5% number out there, it's got flash to a consumer," Brown said.
In addition, Best Buy grants points for purchases made with promotional financing, while Circuit City customers can receive points or financing but not both.
"If promotional finance is really important to somebody, they're not going to make the change," Brown said. "But I'm not sure a lot of customers will care about it." Also, he feels that the newness of Circuit City's program will give it buzz. "They could get a little pop there," he said.
Circuit City's rewards program is one of several marketing initiatives underway, ranging from a Web site revamp to new ad campaigns.
"It's one of many steps that they've made in the last year that have shown that the company is serious about increasing initiatives to drive the top line," SunTrust's Brown said. "Taken together, they just show that the turnaround at Circuit City is on track."
source
videobusiness
10-09-04, 01:31 AM
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actually it doesn't sound that awesome. unless i'm reading this wrong, the Circuit card is an actual credit card, unlike the Reward Zone card, which is basically just an account number "carrier." as the article says, you can only chose one option with the CC card: either points or financing. personally i don't see the upside to the CC card. you either gain the points and pay the interest or save the interest and lose the points. sounds like six of one, half a dozen of the other. not only that but if you opt for the points your point total is limited by your available credit. i'm failing to see any redeeming quality of this program.
10-09-04, 01:02 PM
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i'm failing to see any redeeming quality of this program.
You could use the card at Best Buy, getting BB Reward points and 1% towards a CC certificate
Really though this is inferior to a cash back credit card, which will give you 1% cash back everywhere and 5% back at select merchants. Those merchants are usually Grocery Stores and Gas Stations, which you would spend a lot more money at than Circuit City.
You could use the card at Best Buy, getting BB Reward points and 1% towards a CC certificate
Really though this is inferior to a cash back credit card, which will give you 1% cash back everywhere and 5% back at select merchants. Those merchants are usually Grocery Stores and Gas Stations, which you would spend a lot more money at than Circuit City.
10-09-04, 02:22 PM
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A step in the right direction for Circuit City(CC). However, there are many downsides to CC using this particular avenue.
1) I can not justify replacing any of my current cc w/ this one. I believe my Discover card and Citibank card have superior rewards.
2) Many of us know that too many credit cards can have a negative effect on one's credit score even if they all have zero balances.
3) Circuit City is not always the cheapest place to purchase products, even among B&M stores. This is why I did not renew my BB reward zone card.
Reasons to get CC new cc:
1) Younger consumers who want to build their credit.
2) Anyone who has the cash to buy a big ticket item and was going to purchase that item a CC. IMO, paying interest would outway points accumulated.
3) Anyone who does not have a cc with any rewards. I know some people, dont ask me why, who fall in this category.
I am sure there are many more pros and cons. I will pass on the Circuit City credit card. I do hope that CC has sucess with this program and stays in business against BB and Walmart. I think competition among these and others will help keep prices down for all of us consumers.
1) I can not justify replacing any of my current cc w/ this one. I believe my Discover card and Citibank card have superior rewards.
2) Many of us know that too many credit cards can have a negative effect on one's credit score even if they all have zero balances.
3) Circuit City is not always the cheapest place to purchase products, even among B&M stores. This is why I did not renew my BB reward zone card.
Reasons to get CC new cc:
1) Younger consumers who want to build their credit.
2) Anyone who has the cash to buy a big ticket item and was going to purchase that item a CC. IMO, paying interest would outway points accumulated.
3) Anyone who does not have a cc with any rewards. I know some people, dont ask me why, who fall in this category.
I am sure there are many more pros and cons. I will pass on the Circuit City credit card. I do hope that CC has sucess with this program and stays in business against BB and Walmart. I think competition among these and others will help keep prices down for all of us consumers.
10-09-04, 02:39 PM
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3% CASHBACK (ALL GAS PURCHASES) + 1% CASHBACK (EVERYTHING ELSE)
1. Don't wait for incremental redemtion amounts
2. Don't hassle with tiers
3. See your cashback show up in every month's statement, automatically, no request necessary, right down to the penny.
CHASE PERFECTCARD™
I got one of these earlier this year and I'll never go back to a program that isn't a) cash, b) credited automatically each month, and c) not subject to increments. The 3% gas cashback gives it a nice bump each month, too. Go for it.
PEACH
1. Don't wait for incremental redemtion amounts
2. Don't hassle with tiers
3. See your cashback show up in every month's statement, automatically, no request necessary, right down to the penny.
CHASE PERFECTCARD™
I got one of these earlier this year and I'll never go back to a program that isn't a) cash, b) credited automatically each month, and c) not subject to increments. The 3% gas cashback gives it a nice bump each month, too. Go for it.
PEACH
10-17-04, 09:04 AM
#8
Originally posted by MISS PEACH
3% CASHBACK (ALL GAS PURCHASES) + 1% CASHBACK (EVERYTHING ELSE)
1. Don't wait for incremental redemtion amounts
2. Don't hassle with tiers
3. See your cashback show up in every month's statement, automatically, no request necessary, right down to the penny.
CHASE PERFECTCARD™
I got one of these earlier this year and I'll never go back to a program that isn't a) cash, b) credited automatically each month, and c) not subject to increments. The 3% gas cashback gives it a nice bump each month, too. Go for it.
PEACH
3% CASHBACK (ALL GAS PURCHASES) + 1% CASHBACK (EVERYTHING ELSE)
1. Don't wait for incremental redemtion amounts
2. Don't hassle with tiers
3. See your cashback show up in every month's statement, automatically, no request necessary, right down to the penny.
CHASE PERFECTCARD™
I got one of these earlier this year and I'll never go back to a program that isn't a) cash, b) credited automatically each month, and c) not subject to increments. The 3% gas cashback gives it a nice bump each month, too. Go for it.
PEACH
I use it with my BB Reward Zone, so I make out twice. No need for the CC card.
10-19-04, 01:35 PM
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I prefer specific gas company credit cards.
I have a Chase Marathon and a CitiBank Shell card which offers 5% on all gas purchases plus 1% on everything else. With today's prices that's at least a 10-cents per gallon discount.
This is not a come-on, but the permanent reward program--certainly beats 3% on the PefectCard.
I have a Chase Marathon and a CitiBank Shell card which offers 5% on all gas purchases plus 1% on everything else. With today's prices that's at least a 10-cents per gallon discount.
This is not a come-on, but the permanent reward program--certainly beats 3% on the PefectCard.
