US rewards operator invests in Brazilian programme
The LoyaltyOne business of Alliance Data Systems has bought a 29% stake in a Brazilian loyalty programme.
The online rewards programme, called Companhia Brasileira De Servicos De Marketing or “Dotz”, was founded in 2000. It has more than 200,000 active participants, 50 online sponsors and a rewards catalogue featuring more than 6,000 products and services.
The deal, terms of which were not disclosed, is the first in a series of planned steps by the loyalty specialist to expand its business outside North America.
LoyaltyOne and Dotz say they hope to expand the program to bricks-and-mortar retailers.
The two companies launch a pilot programme in October fashioned after the LoyaltyOne-operated Air Miles Reward Program in Canada, which has more than 9.5 million participants and more than 100 business and retail sponsors.
Despite dramatic demographic differences between Canada and Brazil, LoyaltyOne president Bryan Pearson believes the Brazilian programme can achieve success comparable to that of the Air Miles Reward Program. “While there are 190 million people in Brazil, we’re really only targeting about 40 million who fit into our demographic,” he says. “But of that demographic, we believe that within three or four years we can get between 40% and 60% of the market participating. That does, however, depend on our partners.”
The pilot, which launched in Belo Horizonte, Brazil’s third-largest metropolitan area, will feature 13 new Dotz sponsors, including a national bank (Bacno do Brasil), regional grocer (SuperNosso) and national gas station chain (Ale). Throughout the next year, LoyaltyOne hopes to add cellular phone providers, pharmacies and other national or super-regional players, says Pearson. The pilot is scheduled to run through 2010.
Alliance Data provides private-label credit card services to retailers and wholesalers.