Launched in 2015, Plenti captured a lot of attention by offering customers the ability to collect loyalty points at a variety of retailers under a single heading. The concept was like a credit card rewards program without the credit card. (Plenti points are different from American Express member reward points.)
“It will really be the first time where U.S. consumers, on a single program, can take the rewards they’ve earned in one industry and take it to another,” said Abeer Bhatia, then-CEO and founder of Plenti at American Express, in an interview with PYMNTS at the program’s launch.
The number of points a customer can earn on a transaction varies from merchant to merchant, the limitations of which are set by each merchant.
And merchants were somewhat uniquely chosen, since there could only be one representative per category. That meant Exxon-Mobile was the only fuel partner, and Macy’s was the only department store, for example.
The redeem rate, however, was set at $10 per thousand points.
Which seems to have initiated the issues that — two years down the line — have created trouble for the program.
Macy’s did initially find success in the Plenti program, with new merchants in new verticals joining up.
The platform seems to have gotten quite a bit of traction with customers. As of late 2016, the chain was boasting 36 million active members who had netted 40 billion points and redeemed something on the order of 90 million offers.
“They’re earning significant value in the program,” noted Joshua Berwitz — then-Plenti president, now SVP of Enterprise Strategic partnerships at American Express. “And our partners see the value in putting additional offers in front of our customers to further engage existing customers or to drive additional customers into their stores.”
The program has been around for a little under three years and has had three different leaders since then. Bhatia was out mid-2016 and moved on to Chase. Berwitz evacuated the president position in May 2017. The current leader of the program is Amex VP Jacob King reporting to Pierric Beckert, head of the loyalty business,
The bigger issues for Plenti, though perhaps foreshadowed by irregular staffing, really began to show up in late 2017, when merchants began dropping from the platform.
In late 2017, several Plenti merhcants decided to take leave of the coalition rewards platform. AT&T was the first to flee, followed quickly by Chili’s.
But the big wave came at the start of 2018, when on New Year’s Day, Direct Energy, Hulu, Nationwide, Enterprise and Expedia all announced they too had had their fill of the coalition loyalty experiment and decided to move on.
The biggest and most attention-grabbing drop, however, came care of Macy’s. As January drew to a close, the long-embattled department store retailer announced that it too would be exiting the Plenti program as of March.
Macy’s did note that it will allow Plenti points to accrue on qualifying purchases until March 15, and customers will still be able to redeem program points on Macy’s purchases until May 3. Remaining earned points can be redeemed with Plenti partners after the cut-off date.
The official reason: Macy’s wanted to reset their entire loyalty offering to focus more on rewards than discounts — i.e. rewarding customers more heavily for spending through the new Star Rewards program than offering them large amounts of money off their purchases. It was an explanation for leaving Plenti that bore resemblance to the sentiments of merchants like AT&T and Chili’s.
But a source at Macy’s, speaking on the condition of anonymity, noted that the program was structurally problematic: Coalition loyalty, they said, works better for some merchants in the collective than for others. Coalition offerings, as used by airlines for example, work well when all the partners offer somewhat similar services, but don’t directly compete with one another. So, airlines that fly different routes are good candidates.
Plenti, our Macy’s source explained, did manage to ensure the non-competition part of the coalition, but its goods offerings were asymmetrical. Consumers could — and apparently often did — generate points at “staple” shops like grocery stores and gas stations, places where points are relatively easy to collect, before expending those points at Macy’s, where they could be used against a wider range of goods.
American Express remains mum on the subject, though they’ve noted they are in communication with their partners as they try to make a decision.
But given the mass merchant exit, and why it happened — added to the fact that American Express has not put a permenant head on this department since June of last year?