Shawn Stewart wants you to redeem your Air Miles.
After years of financial struggles, a bankruptcy, an acquisition and a lengthy restructuring, the president and CEO of the 33-year-old Canadian loyalty rewards program is eager to see shoppers enjoy the rewards they’ve earned.
“There’s billions of miles out there,” he says. “I think in many Canadians’ minds we were actively trying to get you not to use your miles, and we’ve pivoted to a position of, ‘we want you to use your miles; we want you to reward yourself.’”
That’s especially true now, with Canadians facing economic challenges and uncertainty.
In such times Stewart says Air Miles sees a pivot from luxury rewards like travel to gift cards to pay for necessities like gas and groceries.
Once a pioneer and market leader in customer rewards, Air Miles began losing key partnerships — and with it, users — as more brands established their own rewards programs.
Soon after Stewart joined as president and CEO in 2022 its main grocery partner, Sobeys, ended its partnership, following other major retailers like the LCBO, Lowes and Staples.
In early 2023 parent company Loyalty Ventures Inc. filed for bankruptcy, and soon after Air Miles was sold to BMO for US$160 million.
Stewart, for his part, has seen Air Miles at its best, having worked for the company from 2010 to 2013 in what he describes as its “glory days,” and at its worst, during a period of financial distress nearly a decade later.
The Vancouver-native first travelled east to complete his MBA at Western University’s Ivey Business School in 2004, where he got his first taste of the retail sector through a co-op placement at Shoppers Drug Mart.
After graduation Stewart spent four years in retail strategy with Accenture, before his first stint at Air Miles, followed by eight years building another iconic loyalty program at Canadian Tire, before his return.
Today the independent BMO subsidiary is rebuilding its partner and user base, with a growing roster of more than 450 brands, 500 Canadian staff, with more than $300 million in rewards redeemed in the last 12 months, with billions more to go.
The Star caught up with Stewart from his home office in Toronto to talk about Air Miles’ long journey from industry pioneer to the brink, and why the company now feels ready to sit alongside other bank-anchored loyalty programs like RBC’s Avion and Scotiabank’s Scene.
As someone who studied statistics 20 years ago, did you anticipate analytics playing a significant role in businesses in the future?
I’d like to say I was that wise, but it was just a happy accident.
I spent five years at BC Children’s Hospital doing statistical models on health outcomes, and one of the doctors said, ‘unless you’re going to become a doctor, this is as far as you’re going to go with statistics in medicine,’ and convinced me to do an MBA.
When I got there, I realized this statistics and analytics stuff — before it was called “data science” — could be cool in business. So, I did my co-op at Shoppers Drug Mart, and that’s where I got my first dose of retail.
After school I landed at Accenture where I almost exclusively focused on retail and happened to work on loyalty programs for a couple of clients. At the time it was less about loyalty and more about using data to make better decisions and drive marketing, and loyalty programs were how you collected the data.
What brought you to Air Miles the first time?
I didn’t want to be in consulting forever. I like to create things, not just advise, so it really was the opportunity to own something. That period from 2010 to 2015, even though I left in 2013, are what I would call the last of the glory days for Air Miles.
What happened?
As things went more digital there just became more options for brands to connect with customers.
Air Miles was the only coalition loyalty program for a decade, but gradually more options became available, not just from a loyalty perspective, but in how brands connect with customers.
There were new competitors offering not just the strategic use of data in marketing, but ways for marketers to use their budgets.
As data became more of a strategic advantage brands were seeking more control, so instead of outsourcing to a third party a lot of them decided to create those loyalty programs themselves.
That all happened while you were at Canadian Tire. What did you learn about loyalty programs there?
I got to work with great teams there not just digitizing Canadian Tire money, but launching Triangle, and helping a loyalty program go from a promotional marketing vehicle to a big strategic part of that business.
Why did you return to Air Miles?
We had just gone through a year at Canadian Tire that, because of COVID, was frankly chaos, and I started to feel like I had done all I could for that business and Triangle, so I started looking for alternatives.
Air Miles’ owners reached out, and we got a deal done quick, because I had my perspective from a decade earlier around how to fix things. I kept an eye on the business and the industry in the interim, and I thought this was a chance to do what I love; build and transform another iconic Canadian brand that unfortunately had gone through some rough periods.
I felt it still had the core capability, had lots of data, had lots of collectors and just needed a fresh perspective.
What was your strategy for turning things around?
First was to stop the bleeding in lots of respects, like from a cost and revenue perspective, but also from a confidence and belief that the team has in the brand and where we’re going.
Whenever you introduce a new leader, you have a window of opportunity, and I really wanted to inspire people around what I saw in the organization around the capabilities and the strengths that it still had, and the big things that had to change to inspire confidence. Nothing was off the table in terms of doing things differently.
What were some of those changes?
Our business has a consumer side and a business partnership side, and both had their own challenges.
On the partnership side, we needed to make it easier to partner with us. Historically Air Miles would try to sign long-term deals and do big integrations, but that model is gone. In my view, we had to be more open and flexible, so if a brand wanted to do a six-month promotion on a seasonal basis, which Sephora does, that was fine.
We had to think of ourselves as a consumer engagement engine, not just a loyalty program that has to be in bricks and mortar, and that spawned our Card Linked Offer program. There were many new things we offered that allowed partners to work with us without taking a big risk or committing to a major multi-year contract.
On the consumer side, it was even more obvious; we were not giving value to consumers in the way that we once had. Our American parent company wasn’t investing in the consumer value proposition, so for me it was about putting more Miles in our collectors’ jeans.
It was important for me that we got back to doing promotions that we were known for, that we were providing good incentive, both in the ability to earn Air Miles, and the value that you got for using your miles.
The best time to be in a program is when you use those Miles and you feel like you got something for free, and the ownership at the time was not that focused on having people use their miles. We pursued cost saving initiatives to free up money to invest in giving people more opportunities to use their Miles with more brands. That was all in the year prior to restructuring and the sale to BMO.
How did the BMO acquisition come about?
They have always been an incredible partner and a big part of the Air Miles program, and we’re a material part of their business. We spent four or five months looking for a buyer, and BMO stepped up, and did a wonderful job of integrating us into their business.
When you have a stable, well regarded Canadian Bank at the table, that really set us up for where we are now.
Where are you now?
We passed the “stabilize” phase and we’re now in this exciting place where we’re able to grow.
When you’re owned by a big bank, there’s certain scale and leverage you get, first on investment, second on reach; like Air Miles is promoted in branches now, and you can see Air Miles offers in the BMO app.
In the last 12 months we’ve added dozens of brands, most prominently expanding our existing partnership with Pharmasave nationally. We’ve invested in promotional programs, so the amount of offers, the amount of value you can get, is greater than ever.
You can also earn at 97 per cent of Canadian grocers on select items by taking a picture of your receipt and uploading it to the Air Miles app. Same with the Air Miles credit card, where you can get an accelerator on your Costco purchases, on your grocery purchases.
We’ve put a lot into the value proposition, and key for us is just making people aware of the change. People gave up on Air Miles, and we need to re-educate them on the value of what we’re providing.
