Monday, February 14, 2011

Waiting for Optimum Redemption

“You’re almost at the next reward level!” A Shoppers Drug Mart sales associate breathlessly exclaimed to me a couple of days ago. As per usual I had come to Shoppers for one thing (toilet paper) and left with a vast assortment of impulse purchases ranging from deodorant (I was had by the sign that said: savings when you buy 3 or more), a couple of bags of Real Fruit, and 2 litre’s of skim milk, purportedly “on-sale”.

When I looked at my receipt – I realized the cashier was right. I have now amassed over 37,000 Optimum Points. When I get to 38,000 the good folks at Shoppers will give me $60 off my next purchase of toilet paper, milk and deodorant.

Halle-fucking-lujah. After 9 years, yes 9 years, of swiping my Optimum Card - redemption is nigh.

Although it was almost a decade ago I remember the day I started Optimizing my life. The year? 2001. The place? Pharmaprix on St. Catherine St in Montreal.

An early adopter, I joined only a year after Shoppers launched their ubiquitous loyalty program. Today, almost 10 million Canadians are Optimum members and over 2.5 million people in the Greater Toronto Area answer positively when a Shoppers cashier asks: Do you have an Optimum Card?

For a country with few cohesive national motifs Shoppers Drug Mart and the Optimum program may have come to displace the long-since departed Eaton’s Catalogue in our collective nationwide retail psyche. All we need is for someone to update Roch Carrier’s Hockey Sweater with the story of a mother in Quebec who tries to redeem her Optimum points at the local Pharmaprix for a Montreal Canadians jersey and we’re good to go.

That being said participation in this Part of Heritage moment doesn’t come cheap. I figure it has cost me over to $3600 to accumulate my current point total; you receive 1 Optimum point for every $10 spent in-store. If I redeem my points now it means that Shoppers will give me $1 off for every $63.33 I’ve already spent (assuming I spend $3800). However, the true Shangri-la for the Optimum obsessed consumer is to point hoard until you reach 95,000; at that point Shoppers will knock a $170 off your bill. Mathematically this works out to $1 free dollar for every $55.88 spent.

Admittedly – I’m not your prototypical Optimum obsessed Shopper’s customer. I don’t buy high-end make-up or cologne from the beautyBoutique, and in Ontario (unlike other provinces) you don’t receive Optimum Points for prescription purchases. I’m also not one of those wacky people who strategize their purchases so they fall on a 20x times the points bonus weekend.

But maybe I should become one of those point obsessed Canadians - it does seem somewhat disappointing that it has taken me over 9 years to benefit from what many business analysts consider one of the most successful consumer loyalty programs in Canada.

Perhaps I’m just not smart enough to get to the Optimum logic. According to Shoppers PR folks, when people redeem their points they usually splurge on things like “expensive perfume they wouldn't normally buy. With the Optimum points, the perfume is essentially free."

Uhm… sorry; can we rewind - how is spending $3800 to get $60 “off” anywhere close to free?

The program seems even more useless if you factor in “the time value of money”. As my finance professor would yell at my class during every lecture: a dollar today is worth more then a dollar tomorrow. Subsequently that $170 off that you’re being promised in today’s dollars won’t be worth $170 in twenty years when I actually amass enough points to redeem them. Using a steady 3% rate - $170 of Future Value is actually worth less then $100 today.

Furthermore, if you look at the capitalization of my investment in Optimum Points ($400 per year for 9 years) and using a growth rate of 3% my $3600 is actually worth over $4000. So thanks Shoppers, for offering less, while actually taking more.

In execution Optimum could be Canada’s greatest letdown since Paul Martin’s ascension to power.

If anything – Optimum maybe the most unexciting rewards program ever. With other rewards programs, such as Aeroplan or Air Miles, you’ll always remember the “free” trip you took upon redeeming your miles. In comparison the Optimum point redemption seems fairly unsexy; unless of course you're buying “free” condoms and lubricant with those points. And even then I'm no sure I'd describe condoms and lubricant as very sexy; its sort like calling a fork the sexist part of your meal....

Which of course leads me to my current issue: seeing as I could die before I accumulate 95,000 Optimum points, I’ve decided that it is high time to start getting my “Free” rewards. As soon as I reach 38,000 points I’m redeeming my $60 faster then Bieber fans destroyed Esperenza Spalding’s Facebook page.

Only thing is, I don’t know what to spend those sixty bucks on. Therefore it would seem apt to ask this about the Optimum program: did I shave my legs (using Gilette Foamy purchased at Shoppers) for this?

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