- Like so many others, the Rakuten Group has its own loyalty program.
- Except that the Japanese firm created and chaired by Hiroshi Mikitani had, as early as 2006, the vision of creating a Rakuten ecosystem that would attract consumers and accelerate cross-use with a points-based program that would act as a catalyst, while adding reductions as it went along within the group’s various activities.
- Today, the programme has 1.3 billion members worldwide, including 109 million in Japan (Japan’s population is 126 million). France is not to be outdone with its network of 5,500 professional merchants, its 500 affiliated partner brands and its 2.5 million members, to whom Rakuten has already paid 65 million euros in more than 2 years.
In Tokyo, in the Crimson House building, Rakuten’s headquarters in Futako-Tamagawa.
Buy shares on the Tokyo Stock Exchange and get discounts in your favorite stores? It’s possible. This is even one of the proposals that Rakuten Japan makes to the members of its R POINT Programme.
2002: Rakuten Japan creates the R POINT.
Loyalty programs are nothing new. From the dyer’s small card to the airlines’ plastic cards, this form of customer commitment, which is regularly updated, has survived the decades.
But while Starbucks, for example, is banking on a smooth mobile shopping experience and points to be converted into ‘free Starbucks’ products, or when Amazon creates the clever Reward, which is nothing more than a disguised loyalty program with an annual fee, Rakuten Japan has opted for a points system to be converted into discounts, the equivalent of cash back. Today, Rakuten Super Point is at the heart of the Group’s business model. Until we come to support the Japanese state’s desire for a more cashless society. In the United States and in France, Rakuten deploys the mechanics with the same success. For consumers but also for partner brands. Detailed review.
Cash back was introduced in France by Catherine Barba Chiaramonti. In 2009, Catherine, then founding president of the Malinea group, which includes the Cashstore website and the Malinea Conseil agency, gave me an interview in which she explained how she came up with the idea of cash back. “In 2004”she explains, “there were on the one hand consumers who arrived massively on the net, and on the other hand merchants who needed business introducers to direct them to their sites. So I asked myself: one, how can I help dealers with their performance models? Two, what would make me, as a consumer, want to go shopping online?
At the time, remember, the search for the right price, the right bargain, was not as strong as it is today. And then I came across a billboard advertisement from the late EGG bank that said: ‘Buy and earn money’. What a beautiful promise! It carried within it the demand of the merchant coupled with that of the consumer. […] I had found my model: compare, buy with confidence and earn cash”
Credit: Catherine Barba Chiaramonti.
And we know the success achieved by Catherine Barba Chiaramonti, today in New York, entrepreneur, investor, president of French Tech New York and since January 21st, she has been sitting on the jury of the new weekly program of M6, Who wants to be my partner?, based on the Shark Tankmodel, alongside Marc Simoncini and Frédéric Mazzella.
Rakuten introduced Super Point (SP) in Japan in 2002. Members can then earn and redeem their points by using or shopping at the Group’s various departments and merchants. It was in 2006 that Rakuten unveiled its vision, that of federating an entire ecosystem of services and businesses, and ensuring that the more a member spends in the ecosystem, the more Super Points they earn. Great idea: immediately, Rakuten Japan saw the Lifetime Value of its members increase in each of the group’s business activities and services. Why spend elsewhere if, by spending at Rakuten, I can get many discounts on Rakuten Super POINT?
The Rakuten Ecosystem.
How is that possible? Three components make this mechanics possible:
- the ID – lsesame – a unique ID that follows the member through all purchases and consumption of Rakuten services. He has no effort to make, everything is user-friendly – including the management of his points, whose daily accumulation, without doing anything, becomes a game for many members.
- The Rakuten Ecosystem –Rakuten is present in Japan in all areas of consumer interest: e-commerce with Rakuten Ichiba, travel (Rakuten Travel) but also FinTech (Rakuten Card, Rakuten Bank, Rakuten Securities), sports, digital media and content, books, fashion, beauty, … in all areas of consumption, and often at the forefront.
- A Virtuous Mechanism
1- Rakuten attracts users with its many services
2- Rakuten delivers Super Point Rakuten under the SPU Program (SUPER POINT UP)
3- and encourages cross-use by making it very simple (via the ID) to purchase goods and/or use services within the Group, while earning not only points that can be used throughout the ecosystem, but also earning more points if one moves from one service to another. It is very fruitful, for example, to link your Rakuten Card to your bank account:
1X Point if the Rakuten Card payment card is linked to the Rakuten Bank
2X Point if investments are made through Rakuten Securities.
The Crimson House building, Rakuten’s headquarters in Futako-Tamagawa, Tokyo.
Among the 9,000 employees working in the Crimson House building at Rakuten’s headquarters in Tokyo, the Customer Strategy Department is the team responsible for maximising the value of Rakuten points and the associated experience, both from a consumer and a brand perspective. In other words, a small team made up of probably the world’s best customer loyalty experts. What they observe of Japanese consumers is probably common to other consumers around the world:
What MS Program members appreciate:
- Points are accumulated without warning.
- There are many ways to use them, and not necessarily to make physical purchases.
One study has even shown that people who get Rakuten Super Point feel 30% happier than those who don’t…
Rakuten Super Point also has a positive impact on the Japanese economy. While the cuts are causing a drop in gross domestic production (GDP), the opportunities to spend the Super Points are creating a surge in consumption.
And Super Stitches don’t just benefit consumers. Merchants are also winners, and this is where we get into the psychology of the consumer. Rakuten tested the sales of the same product on its e-commerce site Ichiba: the control product showed a 9% discount plus one point of cash back, while the same Test Product was sold with a cash back of 10 points (both resulting in 10% savings). Sales of the Test Product (offering 10 Cash Back Points) were 30% higher than sales of the product offering 10% discount. The Deferred Reward Point has more impact than a discount!
Another example: the distributor TBS Shopping asked the Customer Strategy team to propose a marketing plan to increase its sales to Rakuten members. The team offered to multiply the points by 10 for any purchase made in the last week of the month (in addition to the classic operations such as the Super Sales and the Shopping Marathon).
Thus consumers would have a specific appointment (end of each month) to benefit from discounts. In Japan, however, shopping is done on a daily or weekly basis, mainly due to the lack of space in apartments to store groceries. Result of the campaign: TBS Shopping not only saw its sales increase during the last week of the month, but also increased the frequency of purchases by its customers. Therefore, there was no cannibalization on purchases in the first three weeks of the month, which could have been the case.
Senior Vice Manager, Home Life Business Section, Consulting Department Commerce, Rakuten
Taking advantage of the points in their daily lives
Credit: Rakuten https://global.rakuten.com/corp/innovation/rnn/2019/1906_027/
And since Rakuten employees are also of consumers, the Customer Strategy team surveyed Rakuten Entousiasts (who have accumulated more than one million Rakuten points) among Rakuten employees. Here’s how they describe the program:
- One of them chose to use his Rakuten Card as his only credit card, a Gold, and he quickly accumulated points because Golds cards give more points through the SPU (SUPER POINT UP) program than other cards. It also monitors all marketing campaigns made by Rakuten Card, Rakuten Edy (the contactless smart card) and Rakuten Pay (the mobile app), allowing it to earn more points. In fact, for this consumer, accumulating points is a daily game.
- Another employee explains that the points earned when making hotel reservations allow her to pay for her child’s hairdresser, via Rakuten Beauty, or the purchase of physical or digital books, on Rakuten Books, or to treat herself to an excellent dinner at a good restaurant.
Anyone going to Japan for a few days is surprised by the still very present use of cash in shops. The Japanese government has set itself the goal of moving from a 20% cashless payment ratio in 2016 to 40% in 2025. An ambitious progression, but one that the Rakuten points will, it seems, help to achieve.
“We are very happy with this loyalty programme. Good results for us, but also excellent results for our customers and retail partners
Alison Zemny Stiefel – General Manager ShopStyle, Inc.
In 2019, Shopstyle, the Rakuten-owned fashion shopping and discovery site, which draws on more than 20,000 influences, has introduced a new loyalty program called Shop Smarter, offering its members exclusive products, a higher level of personalization and cash back – up to 10% cash back – on purchases made through ShopStyle at more than 21 retail partners such as Saks and Intermix.
Since the launch of this feature, ShopStyle has found that members who join the rewards program generate 38% more sales compared to non-cash-back buyers, due in part to a 21% higher average order value.
“We are seeing a significant increase in the number of repeat customers returning and an increase in turnover for our partners participating in the cash back”explained last summer Alison Zemny Stiefel, now Managing Director of ShopStyle.
The process: the person simultaneously creates an account with Rakuten when they sign up for cash back on ShopStyle. When she is ready to purchase a Cash Back product, she clicks on the product to be redirected to the merchant site and complete the purchase. Rakuten will track the transaction and credit his Rakuten account accordingly.
In France, the Loyalty Program is called Club R. It is free, without commitment, without subscription and accessible to all.
For each purchase made on the platform, on new or used products, Rakuten refunds up to 40% of the purchase amount in Rakuten Super Point. These Super Points can then be accumulated and/or spent in the marketplace or, more broadly, in the Rakuten ecosystem (Rakuten TV, Rakuten Viber…). And for each sale made by the member, Rakuten France offers 2% more in Rakuten Super Point. Today, Rakuten is the only marketplace in France to offer such a generous loyalty program.
And to make the Programme even more attractive – imitating the virtuous circle of its parent company – Rakuten has federated a group of partner brands and affiliated companies in France: for each purchase made from more than 500 major brands, Rakuten reimburses up to 20% in Rakuten Super Point.
- Rakuten France : Rakuten.com
- Club R – Rakuten: Rakuten.com/event/club-rakuten
Discover the Creative Book DECODE Retail by Laurence Faguer
Laurence Faguer is a go-between marketer and entrepreneur from France and the USA, founder of Customer Insight.
At the request of French companies, she personally identifies innovations in Digital, Mobile and Retail in the United States, before they are known in France, and then helps them to successfully transpose these proven strategies to the US.
Laurence is one of FrenchWeb’s retail and beautytech experts, you can regularly find her analyses and interviews on Decode Retail.
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