Some of the newest and deepest discount deals at Target aren’t for everyone, just for people in the know through a new project with Facebook called “Cartwheel.”
With the double entendre name, Cartwheel invites some of the store’s most loyal customers to start picking deals on about 700 items in the store and to share their excitement online. The more deals that Cartwheel members pick and brag about on Facebook, the more deals Target offers them.
“We know people like to talk about and find great deals,” said Target spokesman Eddie Baeb. “This allows them to do just that — it creates that excitement about sharing.”
One catch, however: The deals are only available on products in stores, which is a savvy tactic to help keep customers coming back instead of shopping online at Target’s archrivals, Walmart and Amazon.
Target started quietly testing Cartwheel months ago with employees, which caused a few posts on Facebook, and a few weeks ago Target started talking about it with retail bloggers and marketing officials. On Thursday, Target started emailing customers who use the store’s Red Card debit and credit cards.
To sign up, customers go to cartwheel.com or click on a link that appears in their Facebook feeds from friends already using it. The system displays hundreds of products in categories like Baby, KitchenAid and Wedding Bells, and seasonal categories like Graduation and Father’s Day.
The Father’s Day category, for instance, has deals like 15 percent off iPad cases, five percent off LG televisions and 10 percent off Merona polo shirts. Each deal a customer clicks counts as a “card.” Beginners start with 10 cards available.
Customers then go to the store, pick up the item and use their smartphone to log into their Cartwheel account, which then displays a bar code the cashier scans to enable the discount.
Customers can also “stack” the deal with printed coupons and the 5 percent off deal with their Target Red Card.
At various steps in the process, the Cartwheel system makes a post on the customer’s Facebook page about the deal, which can cascade to other friends’ Facebook pages with an invitation to Cartwheel.
The system is set up to automatically make such posts, but customers wanting more privacy can change their online settings so news of the deal only appears on their own Facebook page.
That’s a smart strategy, said Barbara Kahn, a Wharton School marketing professor.
“As a retailer, you don’t want to lead all the time with price promotions, especially online, because it’s addicting for the customer and you’re only competing on price,” Kahn said. “This, however, encourages people to come in the store, where they are going to buy more things. If you put soda on sale, you know people will come in for soda, and then buy other things.”
Several years ago, retailers started offering deals when customers “Checked In” on apps like Foursquare, but those projects largely fizzled, she said, partly as retailers started asking why they were starting to sell items below cost. A check-in alone didn’t create a direct incentive or method for the next customer to take action that generated new revenue.
“Everyone now is trying to figure this thing out,” she said. “The multiplier effect of doing things through social media was why the Facebook IPO was so huge.” The risk, she said, is that social media posts about someone getting a good price will just become “noise” on people’s Facebook pages.
For now, there are no plans to expand the Cartwheel system from Facebook to that other giant of online product buzz: Pintrest. But Target’s Baeb noted the system is set up to evolve, and more partnerships could come in the future.