David Glaza
November 10,2023
3 min. to read

DEMYSTIFYING TARGET CIRCLE: MAXIMIZING YOUR ROI

Target Circle just celebrated its 10th birthday, but it seems many brands’ sales leads still grapple with how to effectively leverage this powerful platform. In this blog post, we aim to debunk common misconceptions and unveil the incredible potential of Target Circle.

MISTAKE 1: “ALL CIRCLE SHOPPERS WOULD BUY ANYWAY, SO I’LL SKIP IT.”

This is a myth that needs busting! Some brands shy away from Target Circle, thinking it subsidizes purchases. They believe Temporary Price Cuts (TPCs) are a better alternative because that has been the “go-to” tactic. However, it’s time to set the record straight: TPCs often subsidize nearly 100% of purchases.

Why Circle Over TPC?

  • TPCs provide full-price reductions that affect every unit sold.
  • This means TPCs offer more subsidization compared to Circle, which is an opt-in channel.
  • TPCs give discounts to all shoppers, including repeat customers and those less sensitive to promotions.
  • For some brands, TPCs can lead to reduced top-line sales, as the increased unit sales don’t always make up for the markdowns.
  • In a case study, the TPC delivered a 114% lift but at a 33% markdown rate. In contrast, the Circle offer drove a solid 75% lift with only a 17% markdown rate. The Circle spent less than 50% of the markdowns of the TPC with less subsidization to base volume purchases.

The bottom line: Target Circle offers better value and more control over discounts than TPCs. It’s a powerful tool that can drive incremental sales without excessively subsidizing your products.

MISTAKE 2: “TARGET CIRCLE IS TOO SMALL TO MAKE A DIFFERENCE.”

This one’s a common misconception, but it’s far from the truth. While Target Circle might have started small, it has seen tremendous growth in recent years, boasting over 100 million users. For DIGITS clients, Circle’s impact rate reached 22% YTD in 2023, marking a 46% growth increase compared to 2022.

Why Target Circle Is a Viable Option:

  • With a 22% impact rate and a 59% incrementality, the average Circle offer drives a substantial 13% lift in business.
  • This translates to $5-10 million of incremental sales annually for some DIGITS clients.
  • Target Circle’s substantial user base offers a significant reach to potential customers.

The takeaway is clear: Target Circle is not only sizeable but also a potent driver of sales, and you should consider it an essential part of your promotional strategy.

MISTAKE 3: “TARGET CIRCLE IS NO LONGER A GOOD INVESTMENT DUE TO FEES AND REDEMPTIONS.”

Contrary to this belief, Target Circle remains an excellent return on investment, offering one of the best ROIs of any Target promo. While some might fret over usage fees and ad fees, DIGITS’ data tells a different story.

Why Target Circle Is Worth the Investment:

Despite ad fees and TPC fees, the average ROI to a Target Circle offer is 2.3, which surpasses the average performance of all other Target channels.

This robust ROI is due to the outstanding 3.7 ISR (Incremental Sales Ratio).

Target Circle stands out as a high-performing, cost-effective promotional channel.

In summary, Target Circle isn’t just alive and well; it’s thriving. Brands can benefit greatly from this platform by understanding its dynamics and maximizing its potential.

Ready to harness the power of Target Circle? Reach out to DIGITS today to supercharge your retail strategy! Your investment in Circle could be the key to unlocking substantial growth and maximizing ROI.

CONTACT DIGITS

Are you ready to explore the future of Retail Media Networks and stay ahead of the curve? Reach out to DIGITS and join us on this journey towards retail media excellence.

Dave Glaza, Founder & CEO of DIGITS , remains committed to bringing digital capabilities to physical stores! Join us in this quest for omnichannel marketing on LinkedIn:

https://www.linkedin.com/in/davidglaza/

Follow DIGITS on LinkedIn:

https://www.linkedin.com/company/digits-agency/