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The value of loyalty programs is undeniable. With the rise of competition in an increasingly saturated market, consumers are overwhelmed with choice.
How can your brand stand out? You build a connection with your customers. You make them feel like you know them, and that they matter.
Here’s where fashion loyalty programs come in.
In this article, you’ll see how reputable fashion companies like Nike, H&M and Urban Outfitters have increased sales and retained customers in the long run.
Let’s take a closer look at how other brands did it, and what you can learn from them.
4 Examples of the Best Fashion Loyalty Programs
1. NikePlus
Nike’s membership program has garnered 100 Million members, with that number expected to grow. The best part? Their average time spent on the website is 3x that of a guest visitor. Incredible!
How it works: Once you sign up, you automatically become a member.
You’re granted exclusive benefits like customized footwear, free shipping, receiptless returns and a 60-day wear test.
But wait - there’s more!
Members can also join one of four communities - Nike App, Nike Runner Club, Nike Training Club or SNKRS - and get access to cool features that support your passion for running or training, feed into your sneaker obsession or just general love for the brand.
Each app is highly targeted to a specific interest and aims to be a guiding force on that journey.
How?
By offering personalized workouts that are tailored to your fitness goals. Every time you reach a new milestone, you unlock a new reward. These rewards can come in the form of a discount for example but can also extend to Nike’s partner programs. So you can be rewarded with a free month of Apple Music, get 40% off your Headspace membership or free classes at Classpass.
Why it’s special: It’s completely free. No fees, no points and no tiers. Instead, it offers community. NikePlus’ loyalty program is tailored to their customer’s interests - it’s personal. It hinges on their habits and seamlessly integrates into their lifestyle. In other words, it’s about more than exclusivity, NikePlus connects you to like minded people and makes you feel like you’re a part of something.
They wanted to increase the average order value and increase customer retention without going down the traditional point- and tiersystem route. They didn’t want to get lost in the crowd. And they didn’t.
Nike created a loyalty program that doesn’t feel like one. And it has meaningful impact.
2. H&M
Already one of the world’s leading ready-to-wear brands, H&M managed to significantly amplify it’s already existing customer base of 100 million with one of the best clothing rewards programs.
How it works: H&M offers a two-tier loyalty program; Members and Plus.
For each dollar spent, you earn one point. Once you’ve reached 200 points, you get a 5$ reward. Points expire after 12 months.
As soon as you spend $500, you get to the second tier. Both Members and Plus also get to participate in double-point days and a monthly gift card giveaway. Plus members enjoy more perks such as unique experiences, express shipping 4 times a year, and more.
Why it’s special: They have two types of points; regular points and conscious points. And their value is exactly the same. You earn one point for every dollar you spend.
It’s a clever way to encourage their customers to shop from their conscious collections while highlighting their commitment to sustainability. So not only are they increasing customer engagement, they’re also fostering lasting relationships with the right people.
3. The Nordy Club - Nordstrom
Nordstrom’s take on a fashion loyalty program is ‘The Nordy Club’. Not only does it have an estimated 13 million program members, they also spend four times as much as regular shoppers and triple their amount of visits.
Nordy Club members make up one-third of Nordstrom’s customer base and 56% of their sales.
How it works: There are 4 tiers: Member, Influencer, Ambassador and Icon; where the customer falls depends entirely on their spending.
Members earn one point per dollar spent. Double your points when you use a Nordstrom debit or credit card or triple them with a Nordstrom credit card if you’re an Ambassador or an Icon.
Once a member spends $500 or more in a calendar year, they are automatically upgraded to Influencer. If you apply to a Nordstrom card, you start out as an Influencer. To become an ambassador, you need to spend at least $5000 a year.
Then there’s the much less advertised fourth tier: the Icon. That’s the boss level of tiers.
Icon status is reached once you spend at least $15,000 on qualifying items using a Nordstrom card.
The higher the spending, the higher the tier. Simple, right?
Yes. But as you advance, so do the obstacles to getting to the next level. Pure gamification.
Why it’s special: Having tiers as part of your loyalty program isn’t new, but combining it with a co-branded credit card is completely outside the box.
The first three tiers get the usual perks of a clothing loyalty program: redeemable points, discounts, free alterations, priority on sales and style events.
Icons get the VIP experience.
Special treatment includes unlimited free alterations, same-day delivery, a dinner with three guests or a spa experience for two, and icon-only events. Icons will also be reimbursed for their Nordstrom credit card fees!
The one that really stood out to me, however, is getting after-hours access to Nordstrom with a stylist. That’s like every REAL shopper’s dream.
Nordstrom plays on their customer’s need for exclusivity and status while also segmenting them to be able to personalize the perks and make them worthwhile.
4. Hugo Boss XP
The luxury brand previously had a very unique approach to loyalty. There were no points to be earned or redeemed, no special discounts and no tiers. Becoming a member was instant and easy and rewards included free alterations and personalized style advice.
However, they just launched an upgrade to their program - Hugo Boss XP. They’re positioning it as one of the best luxury loyalty programs.
How it works: HUGO BOSS XP integrates traditional loyalty features with blockchain-supported elements, allowing members to earn and use tokens (NFTs) through purchases and interactions. Tokens unlock exclusive products, brand experiences, and offers from BOSS, HUGO, and partners, with future plans for token trading.
There are currently two types of tokens.
The Frequent Visitor Token is earned by checking in and tapping your smartphone at various touchpoints in a BOSS store. This way, you grant access to store employees to your personal information, which helps personalize your service and product recommendations.
The Hugo Blue token can only be earned by shopping from Hugo Blue, a specific brand line.
Why it’s special: What previously made it stand out was that it was purely focused on customer’s return on experience. With this new and improved program, they are building a decentralized system for rewards and community engagement where members choose how much or how little personal information they want to share.
If members want to get hyper personalized benefits, then they are encouraged to share more information.
5. Urban Outfitters
The brand is known for its cultural relevance among younger generations. It’s fresh, it’s creative and does so much more than just clothes. So they already give their customers plenty of reasons to stay engaged. But that’s the secret behind Urban Outfitters: they use everything in their arsenal and leverage that to stay relevant. That includes one of the best store rewards programs out there.
How it works: They also deploy a tiered program. There’s the entry level membership that has the least amount of perks, followed by the silver and gold levels. You start out with milestones like a $5 reward every time you earn 100 points, anniversary discounts, bonus points days and early access to products and sales. Once you level-up, you get more attractive perks like higher points value, shipping offers and surprise rewards.
Why it’s special: Because Urban Outfitters is deeply connected to the music scene, surprise awards include things like tickets to events and signed merchandise from various artists - which is a LOT more exciting than 20% off if you ask me. They also reward you for engaging with them on social media and leaving reviews. They make it so easy it almost feels like they’re just giving away points.
Awarding members for leaving a review with points is pure genius, in my opinion.
Insights by The Bazaar Voice have shown that brands with an active reviews section experienced a 144% increase in conversion rate. This also impacted the conversion rate of casual visitors with a 162% lift and a 13% higher average order value.
These are some pretty impressive numbers.
Each brand got creative with their loyalty programs and built something that really works for them. Let’s see if we can steal their moves to achieve higher customer engagement, increase retention and build lasting relationships.
How to Elevate Your Fashion Rewards Program to Icon Status
For years now I’ve been shopping online, just like everybody else. The habit has become even worse after the pandemic (a sub-pandemic, if you will). Price, shipping, delivery time, return policies are all barriers we’re familiar with. I want to show you how you can leverage action-based rewards, tiered systems, referral programs and non-material perks to keep customers engaged, retained and ultimately, happy!
1. Eliminate barriers
If you run a fashion business or are responsible for their growth, sales or marketing, I’m sure you can relate to the difficulty of driving traffic to your online store. This is especially true if you have a higher price point, which is just another added obstacle to the customer’s decision making process.
I’m going to try to break these barriers and show you how you can borrow and adapt tactics from companies like Nike, H&M and Hugo Boss using a fashion loyalty program for my (imaginary) brand. Let me paint you a picture to make it more realistic. It’s an ethical fashion brand that’s more on the expensive side, but not luxurious. I recently decided to close down the brick and mortar stores and sell exclusively online. I’m struggling because a lot of my customers are used to having the option of going to the store and trying things on.
So, even though I have a clearly stated return and exchange policy, delivery takes no longer than 3 days and I’m targeting the right audience - people are still hesitant to place their orders. I know because I get a lot of questions about my products on social media, but often they don’t follow through. It’s frustrating. How do I encourage them to order online? And how do I convince them that it’s worth it?
I’m going to take a page out of Urban Outfitter’s book. Here’s my game plan to address each barrier:
- Free Entry: Anyone can become a member. No subscription needed, just your email. I want to make the process as easy as possible.
- Delivery offers: Members would get a next-day delivery guarantee and no charge if they decide to return the order. Time is often a bigger barrier than price. If I can leverage that without any financial commitments, I gain the customer and my accountant is happy.
- Reward Reviews: I think this is such a great incentive. Happy (or unhappy) customers gain points when they leave a review and the number goes up if they add a picture. When a visitor, or even a fellow shopper, is hesitant about a purchase they can turn to the reviews section. Unfiltered feedback is the best way to gain their trust and push them in the right direction.
2. Tiers and leaderboards
I already have a good customer base that’s loyal, and I have a database of all of my clients. I haven’t done much to connect the two and rely on scattered data and records to track any customer's history with the brand.
After researching the different fashion loyalty programs out there, I realized if I connect the customer data I have with loyalty, I get to influence their decision making and build a relationship with them.
So I would definitely set up a tiered system and have different membership levels. It’s a sneaky but super effective way to keep customers engaged and make them feel like they’re working towards something, while also segmenting them, which helps you tailor your perks and rewards according to their spending level. The data I get from this would help me identify who’s loyal, what they value most and keep rewards dynamic and relevant (which is the whole point).
I would give the different tiers quirky names that relate to my brand, and would incorporate behavior-based challenges as well as purchase-based ones.
So let’s say I have three tiers: flirting, bonding and committed. (Yes I have taken the relationship path). To move up from the first tier, you need to spend $300 in a calendar year. If you want to be committed, really show you care and spend $800.
- Flirting: You’re interested, you like the brand but you only shop here occasionally. I’m hoping that these beginner perks will convert you into a more frequent shopper. And if not, I’d like to know.
You get:
- 10% off for becoming a member
- A free tote bag with your first order
- Early access to sales
- Birthday discount
- Bonding: You’re definitely a returning customer and we have a good rapport going, but I want to give you a little something to remind you of why you like the brand.
You get:
- First dibs on new collections
- To be the first to know about surprise drops and pop-ups.
- Free alterations
- Customization privileges (free alterations and minor design changes at your request)
- Committed: It’s official, you love the brand. I want to keep it interesting with these extra perks, so you know you’re special.
- Custom-made/one of a kind pieces
- Private appointments at our workshop
- 25% off when you spend over X
This way you also get a clear view of who your most loyal customers are, and who’s only here for the sale.
Try it out! It’s free. (No card, no hassle)
3. Diversify rewards
As we’ve seen with NikePlus, it’s so important to give your customers more than just transactional rewards. Show them you know what they care about, and make it accessible to them. Don’t bombard them with points-systems and discounts that they have to sign up for - instead, gently lure them in.
I mentioned my imaginary brand was ethical, so I could have a section on the website where we encourage customers to donate their clothes so we can repurpose them, for example. And instead of just giving out points to those who complete said action, I would reward them by naming the resulting design after them.
The idea is to connect with my audience over our shared love for ethical fashion and sustainability. And what better way to do it than with a boutique loyalty program?
Members of my brand community would also get invites to exclusive events, first dibs on sales and would be the first to hear about surprise pop-ups.
Having a points-system is good, and people definitely want discounts and money-saving perks. But the value of community-based rewards shouldn’t be overlooked!
4. Action-based rewards
We know that different brands have built different programs, each in alignment with their business setup, their objectives and tailored to their communities. So these are the questions I would ask myself, and so should you. Which products or collections do I want to push? What do my customers value most? How do I give it to them without compromising on my ROI?
I would want my program to not only help me with my customer retention and engagement in general, but also make slow-moving products more attractive. I would do something similar to H&M and have ‘flash days’ where you earn double (or triple) the amount of points on these products only.
The more features you combine, the more effective and attractive your program will be. Earning points for things like creating an account, placing your first order or leaving a review easily incentivize customers to engage with you.
You can play around with it yourself, see which combo would suit your brand best.
Wrapping Up
Even the biggest and most successful fashion brands are using loyalty programs, so that must mean they work. So my personal take away from all of this is: it can for you too.
The great thing about fashion loyalty programs is that there are so many features to choose from, and that you can customize your own according to the needs and wants of you and your customers.
If you really understand your customer base and what your brand is all about, then creating the right formula should be easy.
Increase repeat purchases and average order value. Increase loyalty among your customers. Try Gameball for free
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