Denim brands bank on customer loyalty programs – Sourcing Journal

Although Gen Z and Millennials are more likely to support companies whose values ​​align with their own, a survey by business data platform Statista showed that a large majority of these generations see themselves as caring people. Mark. Among respondents, 60% of millennials said they stick with brands they love, compared to 40% of Gen Z who said the same.

Covid-19, however, has sparked a shift in consumer sentiment that has rocked fashion brands around the world. An October 2020 McKinsey & Company report found that 35% of US consumers have tried a new brand since the pandemic began, and 77% have tried new shopping behaviors, including new channels and stores.

Now more than ever, it’s crucial for brands to engage customers and provide compelling reasons to spend with them. Introducing customer loyalty programs and adding more benefits to the existing ones help lock in customer support. Retaining a customer for any business is historically less costly in time and money. Marketing consultancy Invesp has reported that it can cost five times more to attract a new customer than to retain an existing one.

Whether a brand’s goal is to attract new customers or retain existing customers, loyalty programs are an effective strategy.

NYDJ Vice President of Marketing Steve Morales said the brand’s newly launched rewards program is already measurable after just five months. “We are currently seeing a 10% higher average order value,” he said. “It also gives us another alternative for promotions rather than running them sitewide or spreading them to our entire mailing list.”

But it’s not just about increasing spend and customer frequency. For Nudie Jeans, it’s about fostering a closer relationship with customers who buy from the brand simply out of love for denim. “We don’t want to build a relationship based on discounts or finding the best deal,” said Mathias Jonasson, director of retail and e-commerce at Nudie Jeans. “We want to build a mutual relationship based on common interests and a passion for fairly produced denim. Our program does not include registration vouchers or sales, but rather focuses on being part of a community of like-minded people.

From birthday gifts to exclusive products, here’s a look at how the denim industry is using loyalty programs as brand building opportunities.

G raw star

In October, G-Star Raw launched its program exclusively in Belgium and the Netherlands and already has 123,000 loyal members. The brand offers members one star for every euro spent, with the option to accumulate more stars by completing goals such as adding profile information, signing up for the newsletter and installing the application. The more stars the customer earns, the higher the loyalty tier, with tier-based benefits such as early access to sale or special product categories, events and free giveaways. To date, the brand notes that the most popular perks among members are special birthday gifts and free shipping.

G-Star’s program is currently 53% male and 41% female, and members spend an average of €15 more than non-members. The company aims to grow the program to 500,000 registered customers this year, which it will accomplish by rolling it out to other countries through in-app, online and in-store promotions.

Difference

Gap Inc. doubled down on its loyalty program during the pandemic, and its success inspired the company to keep the momentum going. In a recent conference call with investors, Gap Inc. CEO Sonia Syngal attributed the company’s growing market share to increased investment in marketing, noting that it was shifting dollars to programs awards like Old Navy’s Navyist, Gap Good, Banana Republic and Athleta. She added that in 2021 the program will continue to be a top priority, with the end goal of turning “every customer into a loyalist”.

In September, the company launched a program in the United States and Puerto Rico that replaced its Bright Rewards program. With the new setup, customers will earn 2 points for every $1 spent on in-store and online purchases and earn rewards in $5 increments for a future purchase for every 500 points earned. To promote new signups, Gap Inc. is offering an additional 250 points to new members through October 31.

In the fourth quarter alone, the company enrolled 6.4 million new members into the program. By this summer, the company aims to implement and integrate a single loyalty program for all of its brands, with existing members seamlessly transitioning into the new program. Syngal noted that the merger will maintain engagement at the individual brand level and at the same time promote multi-brand purchases. The updated loyalty program will be split into bronze, silver and gold tiers to allow flexibility in delivery speed so as not to overwhelm the supply chain.

american eagle

Relaunching its old loyalty program has been a successful pandemic strategy for American Eagle Outfitters, Inc. Previously called “AEO Connected,” the company’s “Real Rewards” program offers members benefits such as double points on jeans, access to members-only events, free shipping and returns, and birthday coupons. Like the Gap Inc. program, American Eagle’s program offers rewards to both American Eagle and its sister brand Aerie. It offers different levels of loyalty, with increasingly valuable perks as members move up the loyalty ladder.

In a recent earnings call, Executive Chairman and CEO Jay Schottenstein called the program a “home run,” adding that it delivers “a stronger customer experience, positive margin contribution and a higher return on investment”. He noted that this not only attracts new customers, but also inspires more frequent engagement.

Kut du Kloth

Kut From the Kloth launched its loyalty program in 2016, offering members one point for every dollar spent on the site, as well as points for following the brand on Instagram, creating an account, referring a friend and signing up for mail. electronic. Rewards can be redeemed for discounts on future orders.

According to the brand, the program has brought unprecedented value to the business as it drives customers to engage on social media and refer friends. He also noted that loyal members spend on average twice as much per order and are 46% more likely to make a second purchase within 45 days.

John Nudie

Swedish denim brand Nudie Jeans dropped its loyalty program in May 2019 with a “preview launch” that generated a 50% sign-up rate in the first three months. He added a simple message at checkout that read, “We always took care of your jeans. Now let’s take care of you.

Although the program does not offer discount-based initiatives, it does provide members with exclusive access to limited products, repair and order history, digital receipts, invitations to events for members and a behind-the-scenes look at the head office and the people who work at Nudie Jeans. The program currently has 180,000 members, with a high rate of registrations from repair shops and the brand’s website. And despite the lack of discounts, Jonasson said members tend to shop more frequently than non-members.

NYDJ

Although its loyalty program only launched in January, NYDJ has already added 10,000 members to its roster. Customers who register receive the equivalent of 5% in redeemable points to spend on the site, in addition to exclusive promotions and special prices on new products.

Customers can create a user account when making an online or in-store purchase. Currently, the brand offers “double points days” and exclusive promotions to consumers who opt into the loyalty program.

Levi’s

Levi’s turned to its mobile app to pilot the Red Tab Member program last January. The program offers users free shipping with no minimum and personalized benefits based on their unique preferences, as well as access to its collaborations with high-end fashion brands and products that are not available online.

Throughout the year, loyal Levi’s members received an influx of benefits that helped drive engagement. According to Haley Grevelding, senior director of content marketing and creative at Levi’s, the mobile rewards program is specifically tailored to the Levi’s super fan whose interests include details about a product’s history and supply chain. , and will therefore be the first to know about something like a drop of Japanese selvedge denim. Members will also receive a birthday gift, two free alterations per year, discounts on custom embroidery, direct-to-garment printing, and access to VIP events like DIY workshops.

Madewell

Madewell expanded its loyalty program, Madewell Insider, in August by introducing new member benefits. While it still offered perks like free shipping, customization, and special birthday gifts, it started offering loyalty points for every dollar spent and double points for denim and charity products. such as his Vote t-shirt, which benefits the American Civil Liberties Union (ACLU).

Under the updated program, members are rewarded on a sliding scale, with Madewell Insider status determined by the amount a customer spends each calendar year. For every 250 points earned, members will receive a $10 reward. Madewell Star and Icon members (those who spend $500 and $1,000 respectively) will earn triple points on select days throughout the year.

Madewell’s loyalty program launched exclusively in the United States in 2016 and saw 62% customer participation in August.

Joseph P. Harris