In the fast-paced world of fashion, where trends come and go with the seasons, one thing remains constant: the value of loyal customers. Fashion brand owners, marketing professionals, and ecommerce managers understand that retaining customers is just as important as attracting new ones. This is where fashion loyalty programs come into play.
In this blog, we’ll delve into the world of fashion loyalty programs, explore why they matter, showcase five iconic examples, and provide practical tips on how to build your own. Whether you’re a luxury fashion house or an emerging online boutique, this guide is tailored to help you understand and enhance customer loyalty.
In this guide:
– Why Fashion Loyalty Programs Matter
– Iconic Fashion Loyalty Programs
– Key Elements of a Successful Fashion Loyalty Program
– Steps to Create Your Own Fashion Loyalty Program
– Case Study: Never Fully Dressed’s loyalty program increased its repeat purchase rate by 64%
Why Fashion Loyalty Programs Matter
Before we dive into the specifics, let’s address the “why” behind fashion loyalty programs. These programs are not just a trend; they’re a strategic necessity in the fashion industry. Here’s why:
1. Customer Retention
In the highly competitive world of fashion, keeping customers coming back for more is a constant challenge. Loyalty programs provide a structured way to nurture and retain your customer base.
2. Reduced Reliance on Discounting
Fashion retailers are discounting 40% more than brands in other ecommerce industries.
Loyalty programs significantly reduce a brand’s reliance on discounting by providing alternative and more sustainable ways to incentivize and retain customers.
3. Increased Sales in Quiet Periods
Loyalty program members tend to spend more than non-members, all year round. The promise of rewards encourages them to make repeat purchases, boosting your sales revenue even in the quiet periods, evening out your sales cycles.
4. Valuable Data
Loyalty programs gather data on customer preferences and behaviors, providing insights you can use to tailor your marketing strategies and product offerings.
5. Competitive Advantage
When done right, a loyalty program sets your brand apart from the competition. It can be a key differentiator that helps you stand out in a crowded marketplace.
Now that we understand the importance of fashion loyalty programs, let’s explore some iconic examples that have set the bar high.
Iconic Fashion Loyalty Programs
1. Nordstrom’s Nordy Club
Nordstrom’s Nordy Club is a well-known and successful loyalty program for several reasons:
Tiered Membership: The Nordy Club has a tiered system, including Member, Influencer, and Ambassador levels. This tiered structure offers escalating rewards and benefits as customers progress through the tiers, encouraging members to engage more with the brand to unlock higher-tier benefits.
Exclusive Access: Members of the Nordy Club gain access to exclusive perks, such as early access to sales, private shopping events, and priority in-store services. These exclusives make members feel valued and special.
Personalization: The program offers personalized product recommendations based on members’ preferences and purchase history. This personal touch enhances the shopping experience and encourages members to return for more tailored selections.
2. Lululemon’s Membership Program
Lululemon is a yoga-inspired fashion brand, best known for luxury leggings and stylish athletic wear. Lululemon’s loyalty program caters to fitness enthusiasts, allowing its members to feel part of a real community. Here are some of the reasons the membership program is a success:
Exclusive Access: The program provides members with exclusive access to products and events, like the Lululemon Studio Classes. This exclusivity fosters a sense of belonging and makes members feel valued by the brand.
Community and Networking: Lululemon emphasizes community and networking among its members. This includes special events, workout sessions, and other activities that allow members to connect with like-minded individuals who share a passion for fitness and lifestyle.
Brand Loyalty: The membership program encourages brand loyalty by offering ongoing benefits and rewards, such as receipt-free returns and free hemming. Members are more likely to continue shopping at Lululemon to take advantage of these benefits, reducing the likelihood of them switching to other activewear brands.
3. H&M’s Loyalty Program
H&M’s loyalty program provides a generous mix of discounts, early access, and sustainable fashion initiatives – which is why it does so well. Here are some of the reasons this program made the list:
Powerful Mobile App Integration: The H&M loyalty program is accessible via the H&M app or at hm.com. Integrating the membership program into the app makes it more convenient for members to access their benefits and regularly engage with the brand at the touch of a button.
Free Delivery: H&M offers free delivery as a perk for members who spend over the $20 threshold. This is a great way to give value to loyal customers, while also increasing AOV by encouraging them to spend at least $20.
Experiential Rewards: As well as offering money-off vouchers and free delivery, H&M reward their members with exciting experiential perks, such as access to exclusive music events. These experiences make members feel special and valued while creating a highly emotional connection to the brand.
What sets these programs apart from the rest is their ability to offer value to customers beyond discounts. They create a sense of belonging and provide unique experiences that forge emotional connections.
Key Elements of a Successful Fashion Loyalty Program
To create a loyalty program that not only attracts but retains customers, you need to carefully consider several key elements. Including these essential components can turn your fashion loyalty program into a customer magnet.
Create different reward tiers to motivate customers to reach higher spending levels. The key thing here is for brands to offer unique perks in their tiers to differentiate the loyalty program – for example, your top tier members could be invited to a panel where they get to influence which products are released next.
A great way to win back customers who haven’t shopped with you for a while is ensuring that your points have an expiration date. This gives you the perfect opportunity to reach back out to your customers and let them know that they should shop with you before x amount of time or they’ll lose their benefits forever.
Double Points Events
Running promotional events – such as double or triple points weekends – is a great way to get your customers spending with you out of the peak seasons. This helps you even out your sales cycles so that you don’t see such steep peaks and troughs.
When it comes to buying clothes online, shoppers have come to expect fast and free shipping. Working free shipping into your loyalty program is an effective way to get one-off shoppers to sign up to your program, meaning you can collect more data and deliver even better communications to them in future.
7 Steps to Creating Your Own Fashion Loyalty Program
Creating a fashion loyalty program from scratch requires careful planning and execution. Here’s a step-by-step guide to help you get started:
1. Define Your Objectives
Before diving into the details, it’s crucial to define the objectives of your loyalty program. What do you want to achieve? Common objectives include:
– Customer Retention: Increase customer loyalty and reduce churn rates.
– Sales Growth: Boost sales by incentivizing repeat purchases.
– Brand Advocacy: Encourage customers to become brand ambassadors and refer others.
– Data Collection: Gather valuable customer data for better marketing and personalization.
Clearly defining your objectives will guide every decision you make throughout the program’s development.
2. Choose Your Rewards
Decide on the rewards you’ll offer to your customers. Rewards are the heart of any loyalty program and can include things like:
– Discounts: Offering percentage or fixed discounts on future purchases.
– Free Products: Allowing customers to redeem points for specific items.
– Exclusive Access: Providing early access to sales, limited-edition products, or VIP events.
– Surprise Gifts: Sending unexpected gifts to loyal customers to create delightful moments.
Ensure that your rewards align with your brand and resonate with your target audience.
3. Choose a Loyalty Platform
Selecting the right technology to manage your loyalty program is crucial. Consider the following factors when choosing a loyalty platform:
– Integrations: Ensure the platform integrates seamlessly with your store and existing tech stack.
– User-Friendly: The platform should be easy for both customers and your team to use.
– Data Analytics: Access to customer data and analytics is essential for tracking program performance and making informed decisions.
– Scalability: Choose a platform that can grow with your business as your loyalty program expands.
4. Set Program Rules
Establish clear program rules and guidelines to avoid confusion. Define how customers earn points, how they can redeem rewards, and any terms and conditions associated with the program. Communicate these rules clearly on your website and promotional materials.
6. Launch and Promote Your Program
Once your loyalty program is set up, it’s time to launch and promote it. Use various channels, including your website, email marketing, social media, and in-store signage to inform customers about your program. Consider offering a sign-up bonus to incentivize initial participation.
7. Test and Iterate
After the program is live, continuously monitor its performance. Use data and feedback from customers to identify areas for improvement. Regularly assess whether the program is meeting its objectives and adjust as needed.
When Never Fully Dressed met with LoyaltyLion, they already had an aspirational brand community and growing fast. However, NFD’s team wanted to enhance their brand identity and values by growing their brand community.
To highlight their brand values and increase the repeat purchase rate, Never Fully Dressed designed an on-brand tiered loyalty program structure. Members can progress across three levels respectively; Something Sassy, Strikingly Sassy, and Supremely Sassy. To encourage their regular customers to repeat purchase and spend more, NFD provides exclusive gifts as they move up to the next tier.
Using LoyaltyLion’s integration with Klaviyo, NFD encourages customer loyalty with their post-purchase emails, keeping customers engaged between purchases.
Thanks to their unique combination of financial and experience-based rewards, NFD generates 32% of its total revenue from its loyal customers today. They have also increased their member spend by 59% compared to non-redeeming members and increased their repeat purchase rates by 64%.
Fashion loyalty programs have proven time and again to be a catalyst for building lasting relationships with customers. By learning from iconic programs and following the steps outlined here, you can create a loyalty program that sets your brand on a path to long-term success. So, what are you waiting for? Book a demo here.