Those four words are such a brilliant way to differentiate what Target is doing. Look, it’s really not all that complicated: Not paying $139 a year is almost always better than paying $139 a year.
Yes, Amazon Prime has other benefits, and if those are valuable to you, that’s great. We pay for Prime because we buy a lot of things from Amazon, and the free shipping is probably worth it alone.
Target isn’t trying to compete with Amazon by getting Amazon’s customers to quit shopping at Amazon or paying for Prime so they can pay for its membership instead. You literally can’t pay for Target’s membership program. And Target’s strategy is to make it easy to have both.
First of all, it’s not the same type of thing. Target doesn’t even think of it as a membership program — at least, not in the same way as Amazon Prime. It calls it a rewards program. The main benefit is that members receive 1 percent back which can be used off future purchases.
Sure, there are a few other benefits. For example, Target has partnered with Apple to offer trials of its services, like Apple Arcade and Apple Music — but you can get those same offers elsewhere.
But, more importantly, it’s free. Target doesn’t charge anything for its Circle Membership. Granted, it doesn’t come with a lot of the benefits you get with Prime. For example, you don’t get a streaming video service with Target’s membership.
The point, however, is that it doesn’t cost you anything to sign up and save money during Target’s Prime Day competitor. Target is eliminating the friction of signing up for a paid membership in order to participate in its shopping event.
And if Target can get people to sign up for its free rewards program, that’s a win even if they aren’t paying for it. In the long run, those customers are a lot more likely to keep shopping at Target.
