Loyalty programs have become a crucial component of customer retention strategies and a way to differentiate in a competitive landscape. Myer One, the loyalty program of Australian department store giant Myer, stands out as a prime example of how loyalty program initiatives can drive business growth. Myer One has undergone a significant transformation which has delivered exceptional results.
The journey Myer One has gone through offers valuable insights to loyalty program consultants and strategists seeking to enhance their own initiatives. The program’s success story highlights the importance of data-driven decision-making and consumer-centric design. This article explores the key features behind Myer One’s effectiveness, its impact on Myer’s business performance, and the lessons it provides to loyalty agencies and program managers looking to improve customer acquisition, spend, and retention.
Myer One’s transformation journey
The 2019 turning point
In 2019, Myer One faced a critical juncture; the loyalty program was underperforming, with non-members outspending members dollar for dollar [1]. This prompted a comprehensive review by newly appointed CEO John King, as the program’s value proposition had diminished significantly [1].
Strategic changes implemented
To revitalise Myer One, the company implemented strategic initiatives focusing on two key areas: data-driven engagement and leveraging supplier partnerships [2].
The goal of these initiatives was to enhance the program’s value proposition and increase customer engagement by delivering more relevancy and improving the value members could access.
Data-led engagement
Myer adopted a data-led approach to better understand customer preferences and tailor offerings accordingly [2].
By utilising data in decision making, Myer was able to improve key loyalty metrics, including greater engagement, new member acquisition, and increased spending [1].
This strategy included segmenting the base to determine which members Myer would invest in and which they would ignore based on the current value or future potential value to the company.
The power of supplier partnerships
Myer also recognised the importance of key partnerships in innovating Myer One. These have proven to be crucial role in enhancing Myer One’s value proposition. The program now has partnerships with Virgin, Amex, and Commonwealth Bank [1]. These collaborations provide members with exclusive benefits and experiences, contributing to the program’s resurgence [2].
Current status as Australia’s third-largest loyalty program
Today, Myer One in one of Australia’s largest loyalty programs, boasting 4.3 million active shoppers and over 7 million database members [1]. The program’s transformation has been remarkable, with 76% of Myer’s sales now attributed to Myer One members [1]. This success has positioned loyalty and data at the forefront of Myer’s business strategy, as evidenced by the appointment of Olivia Wirth, an executive with a successful track record in loyalty programs (including several years as CEO of Qantas Loyalty), to lead the company [1].
Myer One has been recognised by industry experts and won awards in the 2024 International Loyalty Awards – Best Use of Customer Analytics/Data, Best Long Term Loyalty Program, and Australia and New Zealand category. In 2023 International Loyalty Awards for: International Loyalty Program of the Year – Global Regional Winner (ANZ), Best Use of Customer Analytics/Data and Best Use of Communications in Loyalty. They also won the Asia Pacific Loyalty Award for Best Use of AI Technology.
Key features driving Myer One’s success
· Machine learning models
Myer One leverages machine learning to analyse vast amounts of customer data, identifying individual preferences and behaviours. This enables the program to offer personalised rewards, recommendations, and experiences [3].
Predictive analytics models are powerful, they analyse historical data to forecast future customer behaviour, such as purchase likelihood or churn risk [3].
· Personalised CRM ecosystem
Myer One utilises a personalised CRM ecosystem to enhance customer experiences. The program collects demographic and firmographic data through various touchpoints, allowing for tailored messaging and improved lead scoring in real-time [4]. This personalisation has resulted in an estimated 11.5% increase in sales from Myer One members [5].
· Exclusive offers
Myer One sources exclusive offers for their members including sales, promotions and events that are not available to non-members. These are sourced by existing supplier relationships, with suppliers able to configure campaigns targeted at Myer One member directly, a massive efficiency improvement.
· Pay with Points partnerships
Myer One has established partnerships with CommBank Awards, American Express Membership Rewards, and Velocity Points, allowing members to use their points for purchases [6]. These collaborations enhance the program’s value proposition and contribute to its success [7].
· Continuous innovation
Under the leadership of Olivia Wirth, Myer One continues to innovate. Wirth’s experience in transforming Qantas Loyalty into a successful customer engagement and online retail business is expected to drive further growth in Myer’s loyalty program [8].
Myer One has also incorporated engagement initiatives to maintain customer interest, including gamification elements and periodic challenges.
· Supportive management and Board
The appointment of Olivia Wirth as executive chairwoman, with support from major shareholders like Premier Investments and Wilson Asset Management, demonstrates a commitment to leveraging loyalty expertise for Myer One’s continued success [5].
- Clear communication
Myer One effectively communicates the benefits and value of the program through various channels, ensuring that customers are well-informed about what they can gain from participation.
· Ethical data use
The program adheres to strict data privacy regulations, ensuring that member data is protected and used responsibly, which builds trust among customers.
Impact on Myer’s business performance
The transformation of Myer One has had a significant influence on Myer’s overall business performance. The program has experienced substantial growth:
- active members, increasing to 4.1 million in the last twelve months [9].
- new member acquisitions have risen by 36.1% [9].
- become one of Australia’s largest loyalty programs, with 7 million contactable members [9].
- contributed 76% of transactions now attributed to Myer One members [7].
This growth has positioned loyalty and data as central to Myer’s value proposition, driving the company’s survival and financial performance [7].
Myer One’s transformation showcases the power of well-executed loyalty programs in retail. The program’s shift to data-driven engagement and strategic partnerships has led to impressive results, with 76% of Myer’s sales now coming from Myer One members. This success story highlights how loyalty initiatives can boost customer acquisition, spending, and retention when designed with the consumer in mind.
For loyalty program consultants and strategists, Myer One’s journey offers valuable insights to improve their own initiatives. There are key learnings from the program’s focus on personalisation, continuous innovation, and leveraging supplier partnerships which provide a blueprint for success. As Myer continues to evolve its loyalty strategy under new leadership, it serves as a prime example of how loyalty programs can be a driving force in a company’s overall business strategy and financial performance.
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References
[1] – https://gravitasco.com.au/how-loyalty-saved-myer-from-the-retail-graveyard-afr/
[2] – https://www.listcorp.com/asx/myr/myer-holdings-limited/news/approach-to-premier-and-strategy-update-3047094.
[3] – https://www.linkedin.com/pulse/leveraging-machine-learning-transform-customer-sanjeewa-rathnayake-h22tc
[4] – https://www.superoffice.com/blog/personalization/
[5] – https://www.afr.com/companies/retail/myer-s-premier-pick-a-corporate-governance-fail-20240522-p5jfsv
[6] – https://www.myer.com.au/content/points+pay
[7] – https://www.afr.com/companies/retail/how-loyalty-saved-myer-from-the-retail-graveyard-20240315-p5fcrq
[8] – https://investor.myer.com.au/DownloadFile.axd?file=/Report/ComNews/20240314/02784693.pdf
[9] – https://www.ragtrader.com.au/news/myer-loyalty-scheme-draws-international-attention
