Have you ever wondered how some beauty brands make it, while others don't? Even if the new and old brands sell the exact same thing? What if they had a secret recipe that made them successful?
Today, many of the world's leading beauty brands use loyalty and rewards programs. Boasting millions of customers and labeled among the best and most successful loyalty programs in the world, both Sephora's and Ulta's customer rewards programs are seen as industry case studies.
But what are other popular beauty loyalty programs? What makes them special? And what are these big beauty brands doing to attract, retain, and engage customers?
In this article, we'll look at several global beauty loyalty programs viewed as the best in the industry to see what makes them so successful.
The e-commerce beauty industry is one of the biggest and most competitive industries in the world. Whether it's marketing, sales, brand loyalty, or something else, there are many brands competing to nab that customer.
But loyalty programs aren't just about customer acquisition, but also focus on retention and getting customers to keep coming back.
Here’s a quick overview of the online beauty industry's data and statistics:
The global beauty industry was estimated at $483 billion in 2020 and rose to $511 billion in 2021, registering a compound annual growth rate (CAGR) of 4.75%, according to data compiled by EarthWeb.
It is expected that the industry will surpass $716 billion by 2025 and $784.6 billion by 2027. (EarthWeb)
In the United States, retail sales for beauty and cosmetics products amounted to $15.55 billion in 2021, and are forecast to reach $18.6 billion in 2022. Retail sales are expected to surge to $27.39 billion by 2025 and exceed $30 billion by 2026, a new report by eMarketer shows.
The research firm projects that US retail ecommerce sales for the beauty industry would "account for nearly a third of the category's total retail sales" by 2026.
A Groupon survey conducted by OnePoll in 2017 found that sales of beauty products amount to roughly $74 per person in the US market, with women spending roughly $313 a month on beauty products. This translates into $3,756 per year per customer.
Loyalty marketing has been around for decades. But it's come a long way since Betty Crocker was one of the first to create discount coupons on her jams.
Today, businesses from restaurants to toy stores to beauty brands to bookstores are all considered great industries for loyalty and rewards programs.
If done right, customer loyalty programs can not only entice customers to buy from a brand but also become regular customers. In other words, rewards programs build customer retention.
Further reading: 6 Creative Ideas to Boost Your Customer Retention Rate
In fact, loyalty programs are one of many customer retention strategies used by businesses to retain customers.
Now it's time we examine the world's best beauty loyalty programs and uncover the secrets that make each one a success.
For this article, we'll be looking at 14 of the most popular rewards programs in the beauty segment.
Possibly the most popular beauty rewards program out there is Sephora's Beauty Insider program.
Beauty Insider boasts over 35 million – yes you read that right – members, of which 17 million are in North America alone. Moreover, previous data by Sephora indicates that 80% of its revenues comes from its loyal customers.
And it's no surprise, after a popular Bain & Company report has found that a 5% increase in loyal customers can boost a brand's sales by as much as 25% to 95%.
- Great FAQ page
When customers get clarity on terms and conditions and benefits early on, they are able to feel at ease with a brand. And that's what Sephora offers its Beauty Insider customers: Absolute clarity about its rewards program, how to earn points, the benefits, and more.
- Exclusivity
Want to make customers feel special? Provide them with exclusivity. And Sephora does that like the experts that they are with their tiered rewards system (more on that below) and the unique perks they offer their loyal customers.
- More stores to earn points
With Sephora's Beauty Insider, not only can customers earn points using the mobile app, website, and in-person store experience, but also through partner stores and salons.
- Unique tier system
Sephora's tiered rewards program offers special benefits to each tier. The free one is called Insider, already making customers who don't want to spend too much feel like they're in on a secret.
Meanwhile, the second, VIB (Very Important Beauty Insider), offers a higher level of being special, and the third tier, Rouge, has a special $100 reward in the rewards system.
Sephora's largest contender is Ulta Beauty and its widely-popular loyalty program, Ultamate.
American beauty brand Ulta boasts 32 million customers in its rewards program. These customers make up nearly 95% of Ulta's sales, with each member in its upper two tiers spending an average $1,700 per year.
- Birthday month
Like many leading beauty loyalty programs on this list, Ulta's rewards program comes with birthday perks. However, with Ulta the rewards aren't limited to a day or week, but rather a month where customers get double points.
- Clear loyalty tiers
Like Sephora, Ulta's tiers give customers exclusivity and better perks the higher they go in those tiers.
- Points expiry
This is a benefit for the beauty retailer than for customers. With points having an expiry date, it entices customers to use them up on purchases instead of letting them go to waste. However, it's best to be fair with how much time customers have before their points expire.
Many loyalty and rewards programs put a one-year expiry date on points earned. Some may have it at three or six months. However, a three-month deadline may put off less frequent customers and drive them away.
- Mobile app
A growing trend among beauty brands and loyalty programs is having a mobile app. And Ulta isn't missing out on that. Their mobile app means customers can shop wherever they are, keep tabs on their earned points, their rewards, and more.
- Ulta & Target
One of the benefits of being a member of the Ultra rewards program is that customers who buy Ulta products at mega US retailer Target can earn points as well.
Though the British retailer is famous for its clothing, it also boasts many beauty products and a rewards program called Beauty Club.
Debenhams Beauty Club rewards program is easy to read and understand. One of the benefits of Beauty Club is that the company keeps updating it to keep it enticing and beneficial to their customers.
- Clear points system
With Beauty Club, customers can easily see how many points they'll earn per purchase. For every GBP 1 spent, a customer gets 3 points, making the calculation simple and straightforward.
- Using points as a currency
One of the fun benefits of being part of Debenhams' Beauty Club is that points earned act like a currency. This means that customers can use their points as a method of payment when checking out.
- More birthday benefits
In addition to the birthday gift customers receive with Beauty Club, Debenhams has also partnered with beauty brand Benefit, giving customers a special second gift on their birthday.
- Free shipping – for life!
Customers in general love free shipping. Debenhams rewards its loyal customers with free shipping for online orders for life! All they have to do is enter a code included in their monthly statement.
- Bonus-point events
Another way to get customers to feel special and not as if you're going straight for their wallets is by having special bonus-points events – like Debenhams. The British retailer runs various in-store and online events each year where customers can earn double or triple points on each cosmetics purchase.
Who doesn't love The Body Shop? In the US, The Body Shop has a beautifully branded loyalty program called Love Your Body Club.
They list their loyalty program FAQs in a series of short articles.
Similar to several beauty loyalty programs on this list, The Body Shop's rewards program includes a 'birthday month' which comes with a once-per-year voucher.
- Clarity on how to earn and redeem points
I always like to focus on this point because many retailers – obviously not those listed here – often keep the value vs points-earned vague, thinking it’ll help them make more money. What they don't know is that this is a big mistake among customer loyalty programs, one that easily drives away customers.
The Body Shop is well aware of this and accordingly makes it clear how to earn points and what the value of points is. For every $1 spent at The Body Shop, customers earn 1 point. Once they reach 100 points, they get a $10 voucher to spend either online or in-store.
- Double-point events
In its FAQ, The Body Shop reminds customers to check their email regularly for "special events such as double points. Then you can earn points twice as fast!"
- Points for charity
Want to buy products and do good? The Body Shop has you covered. You can use your points to make donations to charity.
- Separate loyalty page per country
As an international brand, The Body Shop needs to offer perks to customers in several countries. And it does exactly that.
For example, The Body Shop's Love Your Body Club in Austria rewards customers with 1 point for each €1 spent. Customers also get a €5 gift voucher once they accumulate 50 points.
You’ll find that they do the same for other countries where they are present and have an active rewards program.
While the majority of popular beauty loyalty programs and brands are in the United States, in comes Charlotte Tilbury to make a stand for UK beauty brands.
Charlotte Tilbury is a high-end cosmetics brand based in the UK and their rewards program is beautifully named 'Beauty Universe.'
Unlike many beauty loyalty programs, Charlotte Tilbury’s makeup rewards program is magically unique.
- Various ways to earn points
Offering various options for customers to earn points makes it easier for customers to love your brand and feel a connection. Charlotte Tilbury goes a step further by offering various rewards for certain actions. The UK cosmetics brand offers customers 10% off their first order when they sign up to receive emails.
- Gifts with certain orders
Who doesn't like gifts? Everyone loves gifts! And Charlotte Tilbury entices customers with that weak spot. Beauty Universe members get a gift with their second and third orders from the brand.
- Quizzes for rewards
We've not seen this one before. Charlotte Tilbury rewards members with prizes for answering its quizzes!
- The Magic Vault!
You've probably noticed how Charlotte Tilbury's brand is all about magic. One of the perks of being a member of their loyalty program is getting a "chance to become one of Charlotte's Stars and unlock the Magic Vault."
The brand later explains that once a customer completes three orders of GBP 49, they get to "unlock the Magic Vault," which obviously offers more perks but they keep the mystery and magic and don't elaborate what's in the vault.
There's a reason Glow Recipe's Glow Rewards is one of the unique, fun, and best loyalty and rewards programs on this list.
Glow describes their rewards program as having "one goal" and that's "making it faster and easier for you to achieve beautifully glowing skin! It’s also our way of thanking you for taking your skincare journey with us."
- Unique ways to earn points
The success of a loyalty program often depends on how creative it gets and in how it makes customers earn points and benefits without having to spend money.
It may sound counter-intuitive but looking at a customer as if they're a walking cash-filled wallet is the best way to make sure they don't shop with you often.
Glow Rewards views customers as people and builds a strong connection with them by giving them multiple opportunities to earn points and rewards.
- Referral program
A successful loyalty program often includes a referral program. Glow realizes this and expertly uses it. They even use referral marketing best practices to ensure that it's a win-for-all for customers, their friends, and the company.
- Social sharing for points
Customers can earn points by following Glow via Twitter and Instagram, liking their Facebook page and/or sharing posts about the brand on Facebook or Twitter. Each follow or share translates to 15 points to customers.
International beauty brand Lancôme boasts its Elite Rewards program. Instantly you feel like you're part of something special.
Elite Rewards is a great example of a tiered loyalty program with three tiers, artistically named Rose Gold, Gold, and Platinum. Each tier shows how many points a customer needs to get there and the perks for each.
And for every $1 spent, customers get 10 points.
- Basic tier perks
The basic Rose Gold tier comes with several benefits such as a birthday gift, free shipping for orders starting $49, various rewards, and early access to promotions.
- Free shipping benefits
We've mentioned how customers consider free shipping as a major benefit. With Lancôme's Elite Rewards, the Gold tier gets free shipping with no minimum value per purchase. Meanwhile, the Platinum tier gets "2-day expedited shipping [with] no minimum purchase."
- Many ways to earn points
Giving customers the opportunity to earn points in ways that aren't spending-related builds a strong relationship. Why? Because customers don't have to make a purchase to earn.
Elite Rewards allows customers to earn points by following them on social media and adding some information or answering questions.
- Unique gifts for higher tiers
Like any tiered rewards program, the higher the tier, the better the perks. Elite rewards is no exception. And their perks make you feel special. Both the Gold and Platinum tiers are eligible for an anniversary gift, which entices customers to become loyal for longer.
Customers in those two tiers also get free gift wrapping and a complimentary Shoprunner membership. Platinum tier members get "Invitations to Lancôme parties, artistry events, and more."
Birchbox is a different kind of beauty retailer. Their main offering is subscription boxes of beauty products. They have monthly and annual plans.
Like many beauty rewards programs on this list, the Birchbox boasts a mobile app to offer customers an added convenience.
The only downside to this rewards program is that points expire within six months. That's a pro for the brand as it ensures customers keep buying so they don't lose their points. But it may not be the best option for customers.
Most points earned through rewards programs expire after 12 months, giving customers ample time to earn, accumulate, and redeem their points.
- Multiple point-earning options
You can earn points by shopping, gifting a subscription to someone else, referring friends, and reviewing samples! Birchbox's website clearly explains the points earned for each option.
- Points don’t expire quickly
A benefit of being a member in the Birchbox rewards program is that customers can accumulate points and not worry about them expiring for 12 whole months.
As a big name in the beauty industry, MAC comes with an exquisite tiered loyalty program.
In line with its brand and voice, MAC describes its program saying "M·A·C Lover is M·A·C’s consumer loyalty program, a romance with rewards for the lover, devoted and downright obsessed."
Like Sephora, MAC's rewards program FAQs page is written in the form of a Q&A, making everything crystal clear for customers.
Customers earn an instant 15% off their next purchase when they create a MAC account and then earn 1 point for every $1 dollar spent.
Learn more about Instant Rewards: The Special Recipe for Increasing Customer Loyalty
- Easy to rise between tiers
One of the benefits of being in the MAC Lover rewards program is being able to easily rise to higher tiers. To move from Lover (basic) to Devoted, customers need to spend $150 in a year, while rising from Devoted to Obsessed, customers should spend $500 in a year.
Sally Beauty is a beauty and hair-care store, offering an omnichannel experience through their website, offline store, and mobile app.
Though the Sally Beauty Rewards program is a bit complex, it's an award-winning tiered loyalty program.
In addition to the rewards program, Sally Beauty has a Pro Membership, where "anyone with a professional beauty license, cosmetology school student ID or proof of salon ownership" is eligible to join.
The beauty brand also offers an affiliate program where affiliate members earn a commission when people they refer join Sally Beauty and complete a purchase.
Further reading: Referral Marketing vs Affiliate Marketing: Here's What You Need to Know
While it's not entirely clear who is eligible for the affiliate program, the company does mention that affiliates have to have a website that they can submit and that will be reviewed by Sally Beauty.
- Tiers and benefits
The beauty brand has a two-tier rewards program, for Preferred and Elite members. To reach Elite, customers have to spend at least $200 a year. Preferred-tier customers earn 10 points for each dollar spent, while Elite customers get 12.5 for per $1.
Both tiers offer members-only savings. But the benefits stop here for Preferred members, while Elite members get a $5-birthday gift and free shipping on all orders.
- Sally Beauty Rewards Credit Card
But Sally Beauty doesn't stop at two tiers. The brand boasts the Sally Beauty Rewards Credit Card which gives customers the opportunity to pay bills online, check card balance, and earn 2.5 extra points on your Preferred or Elite rewards program membership.
Moreover, customers who use the Sally Beauty Rewards Credit Card get more perks like: a welcome gift of 20% off, a $20 off a $50 purchase, and an anniversary gift on the day customers open their Sally Beauty Club account.
Customers using Sally's credit card also get a $10-reward on their birthday.
Global elite cosmetics and perfumes brand Dior boasts a unique luxury loyalty program.
Dior invites customers to "Discover the loyalty program of the house of Dior that rewards both your beauty purchases and your engagement."
- Rewards for different countries
Like The Body Shop, the Dior beauty loyalty program is available in several countries where Dior is present such as Malaysia, ensuring that Dior's customers are happily rewarded even if they don't live in the US.
- Challenges to earn points
Dior offers a unique way for customers to earn points and rewards and it’s something we highly encourage brands to do: It’s using challenges.
Challenges are a great way to engage customers. And Dior is well aware of that. Customers can watch tutorials or answer a mini quiz, assemble lucky charms, and more to earn rewards.
Established in 1978, Aveda is a US cosmetics firm that's now part of the Estee Lauder Companies. Aveda's Plus Rewards, formerly Aveda Pure Privilege Reward Program, is an award-winning beauty loyalty program.
Unlike most rewards programs, Aveda's is a paid loyalty program, which means customers pay a one-time $10 fee to join. For that fee, the brand promises exclusive gifts and events and free shipping on all purchases.
An initial downside to Aveda’s rewards program is the - creepy - legalese language they use to explain how their program works. As you’ll see with most if not all the loyalty program explanatory pages in the examples above the language is easy, enticing customers to join. Aveda’s legalese language is quite disconcerting. Here’s how they inform customers about their ‘birthday gift.’
"If you enroll at the Site, you must create a password in order to enroll. You may also be given the opportunity to provide your birth date and phone number, but this information is optional but you will not receive a birthday gift and birthday double points if you do not provide your birth date."
As for how Aveda Plus Rewards works, the cosmetics company offers 10 points for every dollar spent across their website and partner salons. Customers can get their first reward of a free product once they accumulate 2,500 points. Alternatively, they can keep accumulating points to get better rewards.
- Unique gifts for large point accumulations
Aveda's program operates on enticing customers to continually accumulate points. Once a customer reaches 7,000 points, they can get a $75-discount at one of Aveda's partner spas. If they reach 20,000 points, they get a spa set with an embroidered robe.
- More ways to earn points
Part of having a great loyalty program is making sure that your customer doesn't feel like a cash cow. And Aveda offers customers various ways to earn points that don't involve spending money.
For example, if a customer downloads the Aveda Plus Rewards app and connects it to their rewards account, they can get 200 points. They also run special events where customers can earn double points.
- Birthday gift
Once you get past the initial sort-of-scary legal language about birthday gifts, you'll be happy to know that Aveda has an annual birthday gift for you along with double points on your special day.
CVS is a drugstore but it's quite popular for its array for beauty products at great prices. Not only that, when customers sign up to CVS' Extra Care Beauty Club, they are instantly rewarded with a 10% off voucher.
- Spend your points as you please
Since CVS is a drugstore, points accumulated as part of their rewards program can be used in other parts of the store. Customers can use points to buy candy, chocolate, or even paper towels.
Smashbox is a global makeup brand with a fun cosmetics rewards program called 'SmashCash' featuring three action-packed tiers.
SmashCash offers customers 50 points to join and then 15% off their first order. Their beauty loyalty program is a combination of various makeup brands' programs.
However, their free shipping options are more condition-based even for the highest tier, while birthday and anniversary gifts are limited to the second and third tiers, among other benefits.
Smashbox is present in the US, Italy, and Germany with separate pages for each.
- Cashback rewards
Like Ulta and Debenham's, the SmashCash program translates points into cashback rewards. For example, every 50 points mean customers get $5.
- Exciting tier names
Having tiers is great, but what's even better is naming your tiers to entice customers to level up. SmashCash's tiers are adequately named 'Fab, Fierce, and Fearless!'
- Giving customers crumbs to rise
Rising between tiers is both easy and difficult for SmashBox. Rising from the basic tier (FAB!) to the next tier (FIERCE!) but they make it harder to rise to the third and final tier (FEARLESS!).
The first two tiers are fairly similar, where customers earn 1 point per $1 spent, whereas FEARLESS offers 2 points per $1 spent.
We mentioned earlier that we'll be uncovering secrets. Now that we’ve examined what makes each beauty rewards program special, let’s highlight the top ways beauty brands are enticing and retaining customers.
Clarity about how customers earn and redeem rewards is essential to the success of a loyalty program. As you can see with the above examples, all of the leading beauty brands with loyalty programs are clear about this.
A major benefit of using a tiered rewards program is giving customers the opportunity to feel special, get better rewards, and feel like they are part of an exclusive community.
Everyone wants a gift on their birthday and brands offering that to customers are winning at it. What the reward entails differs from discounts, to vouchers, to additional points.
Apart from the beauty industry, you'll find many bookstores, restaurants, and cafes who offer birthday rewards often have successful programs.
Offering customers several ways to earn points and rewards, not just by buying products, builds a strong relationship with them and accordingly translates to strong customer retention.
Giving customers the same reward over and over, though good, gets boring. Customers know what to expect. On the other hand, diversifying your rewards from free gifts and vouchers to special beauty events, to spa treatments, to partner discounts, means customers can stay hooked.
Having a mobile app is becoming a need rather than a luxury for e-commerce brands in general, including beauty brands.
As you've seen, most of the above beauty firms have a mobile app to make their brands more accessible to customers.
The cost of acquiring a new customer is 5 to 25 times more expensive than the cost of retaining one, the Harvard Business Review reports. So it shouldn't come as a surprise that brands are going the extra mile to retain their customers.
The above mentioned beauty brands and their rewards programs understand this and work hard to ensure that their loyalty schemes offer value to customers.
If customers don't feel like they're getting value or that they themselves are valued, the easiest thing for them is to look for an alternative. And with the sharp growth in the e-commerce market, finding an alternative is a piece of cake.
So whether you're just getting started with your e-commerce store or have had a beauty brand for years, a customer loyalty program can help you go a long way. And the best thing? Creating a loyalty program is neither hard nor time-consuming.
If you'd like to see how a loyalty and rewards program can help your store, you can explore Gameball's always-free rewards program for Shopify or book a demo to find out how Gameball can help you.
Gameball's customer engagement platform includes a built-in referral program to help you grow your customer base as well.
