Isetan-Mitsukoshi signs up to T-Point loyalty system

In the first case for a department store, Isetan-Mitsukoshi will establish a joint venture company with leading third-party loyalty card provider, CCC. The T-Point loyalty card system is the most widely accepted in Japan. Signing Isetan-Mitsukoshi is a major coup, and the department store is expecting the relationship to pay equal dividends in helping it better segment its market and come up with ways to target new customers, notably those under 45.

Isetan Mitsukoshi has become the first department store to adopt Culture Convenience Club’s T-Point loyalty card service. Although all the big department stores have at least one in-house membership card, with most maintaining additional schemes for VIP accounts (gaisho), this is the first case of a major chain joining an outside programme, of which T-Point is the largest.

T-Point has been around since the 1990s, and CCC has spent the past decade turning it into a complete data mining service. For years Familymart and CCC’s own video rental chain were the only major users. Today, along with a new e-wallet system also adopted by Familymart, T-Point can be used in a wide range of retail chains, petrol stations, and for some purchases online.

The tie-up with Isetan-Mitsukoshi will be through a newly established joint subsidiary due to be set up by the end of the year, a step seen as a necessary security measure to keep customer data in-house.

The department store plans to use CCC’s ever expanding analytics knowhow to mine purchase data. Results will be used to adjust ranges, develop new products, and attempt to come up with ways to target new segments, notably younger customers who department stores struggle to impress.

Isetan-Mitsukoshi’s existing customer data will be combined with CCC’s available knowledge to build a new analytics database. The department store’s IM Card itself has 2.8 million members, although usage is reportedly skewed towards mostly older, heavy spenders.

There are a whopping 55 million T-Point Card (T-Card) holders in Japan. All T-Card members will be able to both earn and redeem loyalty points when shopping at Isetan-Mitsukoshi stores – although the precise ratio of points per spend has yet to be decided and is likely to differ from more mass market chains such as Familymart. Both companies expect an immediate increase in business as a result of the tie-up, with more T-Point sign-ups and at least a small uptick in younger consumers at Isetan-Mitsukoshi stores.

The companies claim they will only analyse anonymous data, looking for general trends, although collecting and including consumer demographics will of course be key.