Loyalty programs are no longer about collecting rewards or offering occasional discounts. Acquiring new members and creating long-lasting loyalty means tailoring offers, providing instant gratification, and allowing flexibility in how points are earned or redeemed. The loyalty landscape is changing as customers opt for digital and seamless rewards options while shopping both online and in-store.
In no particular order, here’s a look at the best loyalty programs in Canada from the past year—and what we can learn about customer retention from the greats.
1. Sephora: Beauty Insider
Sephora’s Beauty Insider Program is the leading beauty loyalty program in the US and Canada, with over 15 million members in North America. What makes the loyalty program unique is its tiered membership system. Starting with the first “Insider” level that’s free to join, members then graduate to the “VIB” level by spending $350 or more in a year and “Rouge” if they spend $1000 or more in a year. The elite Rouge comprises roughly 10% of Sephora’s member base.
The higher the tier, the greater rewards customers can access on top of their points. For example, all Beauty Insider members get a free birthday gift, but only the upper tiers access seasonal savings, free custom makeovers, and free shipping on online orders. The Rouge tier also offers a private hotline and invitations to exclusive in-store events.
The key to Sephora’s success seems to be its attainable tier system built for purchasing higher-end beauty items. Several research studies suggest that tiered rewards provide strong incentives for consumers to spend more, and this program is no different. Beauty Insider blends status with exciting rewards, offering an aspirational model for other companies to follow.
2. Starbucks: Star Rewards
Starbucks is one of the most well-known rewards programs. It’s a traditional program with digital payment methods because customers earn double the points if they pay with the Starbucks app. After scanning the app, customers can still pay with cash, credit or debit cards but only earn 1 star per dollar instead of 2 stars. Encouraging customers to use the app centralizes transactions and provides data on preferences, such as seasonal favourites, popular orders, and the most visited locations.
Ordering from the app also improves the digital customer experience. Starbucks holds about $3.5 billion in unspent gift card revenue, proving just how lucrative a points-based loyalty program can be.
3. Amazon: Prime
For a one-time annual fee, an estimated 200 million Amazon members enjoy unlimited two-day shipping. These members also get access to discounted perks like Prime Video, eBooks, Amazon Music and Prime Day. With competitors like Walmart, Amazon needed a loyalty program that offered serious value.
Prime members spend an average of four times more than non-members, mostly because paying for the service compels customers to get their money’s worth. Almost everything is on Amazon, shipped to your door before you remember placing the order.
4. Air Canada: Aeroplan
It goes without saying that Aeroplan is a loyalty legend. Between its popularity and partnerships with major brands, Air Canada’s Aeroplan program has a leading rewards experience. Using TD, American Express or CIBC Aeroplan credit cards, users earn points on every purchase. Further, then get extra at retail partners, such as Starbucks and Apple. Credit card members also benefit from non-expiring points, a higher earn rate on flights and free checked bags or lounge passes while travelling. Customers also earn when they fly with Air Canada, partnering airlines or when booking certain hotels and car rentals.
The Aeroplan loyalty program provides ultimate flexibility. Since Air Canada overhauled the program in 2020, changes include point-sharing, expanded partnerships (with LCBO most recently), and support multiplying points with the Aeroplan Booster. Additionally, Aeroplan plans to expand into the U.S. with Chase Bank credit cards.
5. Petro Canada: Petro Points
Since about 84% of Canadians own a car, earning points at every gas fill-up is a big draw. Petro Canada differs by partnering with other leading Canadian companies. The loyalty program is linked to RBC, Hudson’s Bay and the CAA, so customers can earn 40% more points by shopping at affiliated brands or using eligible gift cards. Making it as easy as possible for customers to earn points and building partnerships is its recipe for success.
6. Loblaw Companies: PC Optimum
PC Optimum is by far one of the largest rewards programs in Canada. Members gain points by shopping at Shoppers Drug Mart, Pharmaprix, Esso, or Mobil. One unique perk is the “Spend Your Points” events where customers can redeem points for sought-after items. Many members save up their points in anticipation of these promotions, driving customer engagement and long-lasting loyalty.
Instead of using a physical loyalty card, the PC Optimum mobile app makes it easy to scan a virtual card at checkout and watch your points grow. Members also receive flyers and tailored emails with rewards on products they enjoy buying the most.
7. Hudson’s Bay: HBC Rewards
Boasting three rewards tiers and an omnichannel customer experience, Hudson’s Bay refreshed its loyalty program in 2020. The program is built on a digital-first focus, allowing new members to link their membership and online profile once to earn unlimited rewards while online shopping and tap and pay with contactless cards. The brand also made a physical rewards card optional, so earning and redeeming points is frictionless.
The Bay has valuable partnerships too. Members register for a Hudson’s Bay Mastercard that doubles rewards points on each purchase, offers cashback at other merchant partners, and integrates with the Petro-Points and Air Miles loyalty programs. The card strengthens customer loyalty with each purchase made—even ones outside of the department store—and provides a flexible alternative to credit cards. Hudson’s Bay demonstrates that an iconic, legacy brand can reinvent its loyalty strategy with digital features and an appeal to modern customers.
8. The North Face: XPLR Pass
North Face’s loyalty program offers innovative ways to earn and redeem points. With every $100 spent, you receive $10 towards merchandise and early access to exclusive products. Members can also earn rewards by downloading the mobile wallet app, using reusable bags while shopping, and attending North Face events. The outdoor gear brand deeply understands its clientele’s needs and values, catering the program to their curiosity for trying new gear and passion for the outdoors.
9. Indigo: Plum Rewards
Indigo’s loyalty program doesn’t have any membership fees, readers start earning by creating an account. The Plum Rewards app helps customers track their points and redeem for special offers.
But what makes Indigo stand out? Its loyalty program is a vital part of the in-store customer experience. Members enjoy free wi-fi in retail locations while browsing products. Also, new discounts are announced via app notifications, giving members the inside scoop. Personalization is built into the program too, with book suggestions based on buying history.
The brand also introduced plum PLUS in 2019—a sister rewards program that offers discounts in addition to points. PLUS members save an extra 10% on purchases and get free shipping without a minimum price requirement.
10. IKEA: Family Program
Finally, IKEA Family is a loyalty powerhouse with over 150 million members across 30 countries. The program aims to inspire members and create a more informed shopping experience.
All members receive a free beverage at in-store restaurants and discounts on meals or specific products. Members also receive insurance on their products to cover accidental damage during assembly. By providing value-adding benefits (like interior decorating tips), IKEA generates an inclusive, loyal customer base.