On June 21, 2022, Staples customers who signed up to receive flyers or promotions were treated to some amazing news.
Effective July 1, 2022, just 10 days later, Staples unexpectedly Ending their partnership with Air Miles.
It quickly followed the news that Sobeys’ parent company was acquiring a stake in Empires Scene + and was planning to phase out Air Miles, quickly leaving the disrupted “loyalty program” with a number of partners.
Another messy public breakup for Air Miles
Staples is one of the largest and most iconic office retail stores in Canada, generating billions of dollars in revenue each year. This is the latest high-profile Air Miles partner to announce the end of their partnership.
The concern is how fast this separation is happening. Customers were sent only one reckless email, which was light in detail.
The letter appears to have been rushed, as it made no provision for future loyalty programs beyond a vague assurance that Staples’ in-house “preferred” loyalty programs would be developed and upgraded for customers.
Of course, the program of choice is of some interest because it offers some discounts on certain products and comes with benefits like free shipping, but unfortunately, it is only available to small businesses. When you sign up for this link you will need to check a box stating that you are a business.
Even if you’re a proud sole proprietor who makes great use of your American Express small business payment solutions, signing up isn’t boring.
Loyalty programs with open redemption options for travel, even if Air Miles was fairly weak in that case, are much more flexible than flat discounts which are less likely to be significant.
What’s next for Air Miles?
To put it bluntly, it seems that Staples saw Sobes’ decision to exit Air Miles and then decide to leave the ship immediately. At this stage, it seems that the future of the whole loyalty program may be in serious question.
Traditionally, Air Miles has relied on a combination of two factors to stay competitive in the Canadian market.
The first is ubiquity: whether it’s filling the shell with gas, shopping for home renovation supplies in Lowe’s, or collecting wine at the LCBO, you can be sure you’ll be able to earn at least a few air miles a day – on a day-to-day basis, usually boots. With promotional accelerator to do.
However, things weren’t too rosy in the late Air Miles world: at the same time there was a tendency to devalue rewards and lower earnings rates on co-branded credit cards like BMO Air Miles World Elite MasterCard, which went from 1 1 earnings per 20 air miles in 2021. It cost 1 air mile.
Meanwhile, the program has also been bleeding partners left and right. Lowes (and its authorized hardware stores, Rona and Réno-Dépôt) left Air Miles directly, while LCBO joined the new-and-advanced Aeroplan.
Universalism is not something that Air Miles has been enjoying in the Canadian retail space for the past few years and it has only increased due to the loss of their recent Sobes and Staples.
The second way Air Miles retains customers is to increase cross-brand loyalty through promotions like Shop the Block, which encourages shoppers to make multiple purchases from multiple partner retailers. With Air Miles losing a large stake, the ability to maximize revenue through Shock the Block has shrunk significantly.
On top of all this, the basic income rate of $ 20 per 1 air mile is not only measurable when a huge 95 air mile is worth only $ 10. Add to that the lack of utility of the program’s flight rewards, and the hamstring of once-profitable seasonal promotions, there is little reason to be loyal to the remaining few Air Miles-affiliated companies.
Loyalty Ventures, Inc., the parent company of Air Miles, needs a serious change plan if this program is to continue, and one would expect that the person in charge of this work would begin the difficult process by adopting a more consumer-centric approach.
It’s sad, but it looks like one of Canada’s most iconic loyalty programs could soon be at its best, or at worst sent to the dustbin of history. Staples joins Sobeys as another partner, ending their relationship with Air Miles on July 1, 2022.
If there is anything to be understood from the fall of Air Miles, it is not to grant allegiance; Instead, customers must feel that they are getting both valuable and real value.
This basic requirement is something that Air Miles has rarely done to satisfy numerous myths and controversies, and a question they must address if they are to survive.
Until next time, cash out your Air Miles while you still can.