On June 21, 2022, Staples customers who signed up to receive flyers or promotions were treated to some surprise news.
Effective July 1, 2022, a mere 10 days later, Staples is unceremoniously terminating their partnership with Air Miles.
This quickly follows the news that Sobeys’ parent company Empires is acquiring a stake in Scene+ and also plan to phase out Air Miles, leaving the beleaguered “loyalty program” with a rapidly dwindling number of collaborators.
Another Messy Public Breakup
Staples is one of the largest and most iconic office supply retail stores in Canada, operating on billions in revenue per annum. It’s also the latest high-profile Air Miles partner to announce that their partnership will be coming to an end.
What’s alarming is just how rapidly this severance is occurring. Customers were only sent a perfunctory email, which was light on details.
The letter seems to have been rushed out, as it made no provisions for future loyalty programs beyond a vague assurance that Staples’s in-house “Preferred” loyalty program was going to be enhanced and upgraded for customers.
Of course, the Preferred program is of some interest because it offers some discounts on certain products and comes with perks like free shipping, but unfortunately, it’s only available for small businesses. You even have to check a box affirming that you are a business when you sign up at this link.
Even if you are a proud sole proprietor who makes great use of your American Express small business payment solutions, it still may not be worth bothering to sign up.
Loyalty programs with open redemption options for travel, even if Air Miles was fairly weak in that regard, are still much more flexible than flat discounts that are unlikely to be substantial.
What’s Next for Air Miles?
To be blunt, it feels as if Staples saw Sobeys’s decision to pull out of Air Miles, and then decided to immediately abandon ship. At this stage, it looks like the entire loyalty program’s future may be in serious question.
Traditionally, Air Miles relies on a combination of two factors to remain competitive in the Canadian marketplace.
The first is ubiquity: whether filling up on gas at Shell, shopping for home renovation supplies at Lowe’s, or picking up wine at the LCBO, you could rest certain that you’d at least be able to earn some Air Miles on a day-to-day basis, usually with promotional accelerators to boot.
However, things haven’t been too rosy in the Air Miles world of late: there’s been a trend of simultaneously devaluing rewards and cutting earn rates on co-branded credit cards such as the BMO Air Mile World Elite Mastercard, which went from earning 1 Air Mile per $10 spent down to 1 Air Mile per $12 in 2021.
Meanwhile, the program has also been hemorrhaging partners left and right. Lowes (and its affiliated hardware stores, Rona and Réno-Dépôt) left Air Miles outright, whilst LCBO joined up with the new-and-improved Aeroplan.
Ubiquity simply isn’t something that Air Miles has continued to enjoy within the Canadian retail space over the past few years, and this has only been compounded by their recent losses of Sobeys and Staples.
The second way in which Air Miles retains customers is by fostering cross-brand loyalty with promotions such as Shop the Block, which incentivizes shoppers to make multiple purchases at multiple partner retailers. With Air Miles losing partners en masse, the ability to maximize earnings via Shock the Block has shrunk significantly.
On top of all this, the basic earn rates of 1 Air Mile per $20 spent is just not scalable when a whopping 95 Air Miles are worth only $10. Add to this the lack of utility of the program’s flight rewards, and the hamstringing of once-lucrative seasonal promotions, there’s little reason to remain loyal to the few Air Miles-affiliated companies that remain.
A serious turnaround plan is needed if Loyalty Ventures, Inc., Air Miles’s parent company, is to keep this program afloat, and one hopes that anyone entrusted with the task will start the arduous process by adopting a more consumer-centric approach.
It’s sad, but it looks like one of the most iconic loyalty programs in Canada may soon be greatly reduced at best, or consigned to the dustbin of history at worst. Staples joins Sobeys as another partner that will terminate their relationship with Air Miles as of July 1, 2022.
If there’s anything to understand from the decline of Air Miles, it’s that loyalty is not something to be taken for granted; instead, customers must feel like they are both valued and receiving real value.
This basic need is something which Air Miles’s numerous devaluations and controversies have done little to satisfy, and a question they’ll need to address if they are to survive.
Until next time, cash out your Air Miles while you still can.