The fashion industry is generally known to be a competitive one. And while it’s an industry with many sub-categories or sub-industries, it’s also one where customers don’t shop every day.
But then enter the pandemic in 2020, forcing the retail fashion industry into a near standstill. With people around the world spending time and working from home, sales dropped significantly.
And though many brands, especially smaller boutiques, suffered, many were able to stay afloat and make a comeback. Customer loyalty played a role in many brands’ slow recovery.
But how do fashion retailers build loyalty? The answer is using fashion loyalty programs.
Companies that use fashion rewards programs understand the importance of repeat customers. They also know there’s a lot more to a successful customer loyalty program than just giving points.
In this article, we’ll be looking at some of the world’s best fashion loyalty programs and what makes them successful. After that, we’ll be sharing ideas, tips, and tricks to help you create your own rewards program.
The global e-commerce fashion industry struggled when COVID-19 hit in 2020 and forced people to stay at home for months. The industry declined to $485.62 billion that year from $531.25 billion in 2018.
Now, the industry has overcome this crunch and is rising once more. It is forecast to reach $672.71 billion, at a compound annual growth rate (CAGR) of 11.48%, reports Research and Markets.
Meanwhile Statista forecasts a CAGR of 14% between 2017 and 2025.
But when you think of the e-commerce retail fashion industry, it’s important to look at the industry in segments. That’s because different segments get different levels of traction over others.
Fashion retail segments include clothing, shoes, athletic wear, sleepwear, jewelry, accessories, swimwear, and others.
One of the fast-rising fashion retail segments has been ‘athleisure.’ A combination of ‘athletics’ and ‘leisure,’ the athleisure industry was valued at $155.2 billion in 2018. Fast forward a few years, the industry is forecast to reach $257.1 billion by 2026, at a CAGR of 6.7% between 2019 and 2026. (Research and Markets)
Similarly, the loungewear and sleepwear segment is expected to reach $19.5 billion between 2020 and 2024 at a 9% CAGR. (Technavio)
But what do all of these stats indicate?
They show that the e-commerce fashion industry is set to grow. Brands with an e-commerce store are expected to enjoy strong gains in the coming period.
“Fashion brands with an ecommerce store maintain a stronghold in athleisure, like Nike and Lululemon, have reported incredible growth over the course of the pandemic.” (Shopify)
However, it’s worth mentioning that a rebound in the retail fashion e-commerce industry alone isn’t enough to drive YOUR sales. Brands with a stream of loyal customers are seeing the most gains, coupled with this industry rebound. They’re also the ones that were able to weather the negative impacts of the pandemic.
Nike is one of those brands that offers an omnichannel customer experience through its e-commerce website, mobile app, multitude of physical stores. Its customers are loyal. To keep them coming back, Nike has a successful loyalty program that we’ll be exploring in the next section.
Now it’s time to look at some of the world’s best fashion loyalty programs and how they’re winning at loyalty.
While the following list includes several mega-sized brands, you’ll also find several smaller-sized brands.
The methods used by these companies are applicable to all fashion brands regardless of size.
One of the most creative fashion rewards programs on this list is Patricia Nash Designs. The brand gives customers several ways to earn points, an annual gift, and more.
They clearly explain how their loyalty program works, how customers can earn points and how they can use those points.
A quick look at ‘Ways to Earn’ shows that customers get 100 points just for signing up. They get another 100 points for following the brand on Instagram. Social shares earn customers 50 points per month on Facebook and Pinterest.
This means, customers who sign up and follow Patricia Nash on Instagram can earn a $10 coupon on the first day.
What Patricia Nash Designs are doing here is getting customers to engage with the brand. So even if a customer isn’t planning on buying anything this week or this month, they can still earn points to use later.
The Nordy Club is the rewards program for Nordstrom. The program gives customers 1 points for every $1 spent at Nordstrom, Nordstrom Rack, and HauteLook, the brand explains.
Don’t you just love the way Nordstrom positions its program? ‘Rewards look good on you.’
Nordstrom also has a mobile app, making it easier for customers to shop and earn points. Their Nordstrom credit card offers customers 3 points for every $1 spent.
For years, H&M boasted a loyalty program. But in 2019, the popular fast-fashion Swedish brand revamped its rewards program to ensure better rewards for loyal customers.
As of 2022, H&M offers a two-tier loyalty program that gives customers exclusive discounts, $5 rewards, a birthday gift, and 10% off their first purchase.
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 others.
As a luxury fashion brand, Hugo Boss uses a different approach to gaining customer loyalty. Instead of points earned to get discounts, Hugo Boss focuses on the return on experience. They do so by creating a unique customer experience and exclusivity.
The Germany company’s loyalty program is called Hugo Boss Experience. In-line with that experience, Hugo Boss customers earn a special reward for joining and can get “one standard alteration free of charge.”
And since Hugo Boss customers are all about luxury, the brand offers them a drink and a BOSS Team member to introduce them to the latest collections and help the find their perfect outfit.
The Hugo Boss Experience is considered one of the most popular luxury fashion loyalty programs.
Sportswear brand Nike offers rewards to its loyal customers via its NikePlus program. Over the years, Nike has changed and upgraded its program to ensure that customers are being rewarded for their loyalty.
Now, NikePlus offers free fast shipping, in-store rewards, along with personalized exclusive member rewards. Personalized rewards mean different members may get different rewards based on their choice of training activities.
Moreover, NikePlus members can enjoy perks via Nike’s partner programs such as Apple Music or Headspace.
One of the reasons NikePlus is successful is because the brand understands the importance of personalized experiences and what they mean for customers.
NikePlus is considered one of the most popular omnichannel loyalty programs.
Sustainability-focused Happy Feet Footwear offers a tiered loyalty program called Happy Feet Plus + Points.
The footwear brand clearly explains how the program works and their points system. Each 250 points translate to a $5 coupon or discount.
Like Patricia Nash, the Happy Feet Footwear loyalty program doesn’t rely on purchases only for points. Customers get 250 points on signing up, 250 points on their birthday, and 1,000 points after their first purchase.
Happy Feet Footwear also offers a referral program and uses one of our top referral marketing best practices. The brand rewards both their customers and the newly referred person. Happy Feet Footwear customers get 250 points for their referral and the referred person gets a 10% discount on their first purchase. It’s a win-win.
The footwear brand adds an opportunity to bond with its highest spenders. It gives its Gold tier members the chance to be featured on its social media platforms.
The only downside to this program is that points become “redemption 30 days after your purchase.” Brands put this long-time frame to reduce the hassle of returns and having to deduct points for returned items.
GAP is another fashion brand that recently overhauled its rewards program. In July 2021, Gap announced combining its credit card and rewards program into one program called Gap Good Rewards.
The Gap Good Rewards covers Gap’s 4 brands: Gap, Banana Republic, Athleta, and Old Navy, their outlets, and loyalty programs.
This means customers will be “able to shop across all four of our brands and enjoy the benefits of your One Membership. Whether you joined Gap Good Rewards, Banana Republic Rewards, Navyist Rewards, or Athleta Rewards, your membership will travel with you,” Gap explains on its website.
Gap Good Rewards includes 3 tiers: Core, Enthusiast, and Icon with each tier being based on a number of points. If a customer exceeds this points threshold, they rise to the next tier. To maintain their tier, they need to spend the minimum required number of points per tier.
Between September 2021 and June 2022, Gap has added 19 million new members, Gap Inc.’s chief customer and digital technology officer John Strain told Forbes. He added that Gap now had 37 million members in its tiered rewards program and credit card.
“There’s an easy enroll feature we just launched online and in stores as a way to continue to drive membership and membership penetration,” Strain explained.
Popular clothing brand Bloomingdale offers a rewards program with many perks. Though the value of their points scheme is quite low, one of Bloomingdale’s perks is “double, triple, and power point” days.
Starting the first tier, called Loyallist, customers get “a tailored-to-you Perk of the Month” in their inbox each month.
Here are a few of the perks offered to the basic Loyallist tier:
Another example of a luxury fashion loyalty program and one of the world’s most popular loyalty programs in the world is the Michael Kors rewards program. The KORSVIP program is a great example of a tiered loyalty program and luxury fashion program.
The brand offers loyal customers surprise gifts, access to private events, free shipping, and other benefits.
Like most tiered rewards programs, Michael Kors rewards customers with various gifts depending on their tier. The higher the tier, the better the gifts.
Fashion retailer Kohl offers a two-tier rewards program for customers. Regular customers get a 5% reward on any purchase they make, while Kohl card holders get 7.5%.
Both members and Kohl card holders get a birthday gift and personalized rewards. However, Kohl card members get more perks such as an anniversary gift (the member’s anniversary for joining Kohl) and access to exclusive monthly savings.
However, it’s worth noting that Kohl’s rewards program is often seen as a complex one. A downside to the Kohl program is that some points expire within a month, while others may remain in a customer’s account for a year.
These fast-expiring points maybe a downside for customers who may feel like they’re being forced to buy something so they don’t lose points earned.
Further reading: Follow These 9 Tips for a World-Class Luxury Loyalty Program
Popular US brand JCPenney (JCP) may have filed for bankruptcy not too long ago but the brand, now a private company, remains operational and continues to reward loyal customers.
JCPenney rewards members with a 30% discount on their first purchase. After that, customers get 1 point for every $2 spent on specific JCPenney purchases.
Like Nordstrom, JCPenney offers customers a credit card. Customers who use the JCPenney credit card earn 1 point for every $1 spent. Every 200 points result in a $10 voucher.
However, the maximum number of points a customer can earn in a single purchase is 2,000 points.
According to deal-and-coupon website Koopy, you can earn points on the majority of products at JCPenney online and in-store. These purchases include “Sephora inside JCPenney, salon purchases inside JCP, optical services, portrait purchases, and customer window treatment services.”
By now, you should have an idea about what makes some fashion loyalty programs stand out more than others.
You’re probably already considering some of the above methods and wondering how you can incorporate them in your store.
In this section, we’ll focus on loyalty program best practices to ensure a successful and effective rewards program.
If you want customers to join your rewards program, then you have to clarify how your points system works. This includes the value of points and how customers can earn and redeem them.
In fact, one of the most common mistakes in customer loyalty programs is not mentioning the value of points. Customers end up feeling frustrated and confused and their experience becomes a negative one.
Most fashion and even beauty loyalty programs offer 1 point for every $1 spent. However, there are exceptions like Bloomingdale’s, Happy Feet Footwear, and others.
In addition to specifying the value of points, you need to explain how your loyalty program works, and what benefits do customers get.
What type of loyalty program are you offering customers? Is it a points-based one? A tiered one? A gamified loyalty program or something else?
Clarify the benefits you’re giving customers and how they can get those perks.
For example, birthday rewards are popular among retail loyalty programs. In the beauty segment, brands offer a $5 or $10 voucher or a free gift. In fashion, brands offer a voucher or a number of points.
You can decide what you’d like to give customers on their birthday. It’s their special day, so make it extra special and keep your brand top of mind.
The most successful customer loyalty programs today are the ones that offer multiple ways customers can earn points.
Gone are the days where customers earn points just for spending. Though spending remains one of the ways to earn points, it shouldn’t be the only one.
The above brands’ fashion loyalty programs included the following ideas:
Last but certainly not least, don’t make it too hard for customers to earn points or redeem them. Some brands specify when customers can start redeeming points.
If there’s a one-month or three-month expiry date attached to redemption, you may be hurting your rewards program. Especially if you’re just starting out.
Fashion retailers don’t operate like cafes and restaurants. Customers don’t shop for fashion every day. Which means your customers are likely to earn their points on a slower pace compared to the nearest coffeeshop. Having a short expiry time frame can result in points expiring before customers can reach the minimum amount to redeem.
The result? Customers will get frustrated and drop your program and brand.
So how can Gameball help?
Gameball is a customer engagement and retention software. In other words, we save you the time and hassle of creating your own rewards program by giving you a simple code to integrate into your website, mobile app, or both.
Gameball also offers a referral marketing program that you can use to attract more customers, reward current customers for their referrals, and entice new customers to make a purchase.
And because Gameball provides a gamified loyalty experience, customers are called players.
Here are a few ideas you can you to make your fashion loyalty program more appealing to customers and increase engagement:
One of the cool features in Gameball is the challenges feature. Challenges allow you to engage and reward customers for specific actions in your store.
Rewards include badges and points. You can combine any of the above ideas into the challenges feature.
For example, you can create a basic social sharing challenge where customers share a post to Facebook, Twitter, and Instagram. When they’ve completed all three, they get 20 or 50 points and a badge. You can create several challenges along with recurring challenges such as a Christmas or Halloween challenge.
Learn more about the different types of challenges you can create via the Gameball Help Center.
The fashion retail market is already seeing gains as people resume their day-to-day activities. And with more workplaces adopting a hybrid culture, some fashion segments can expect an increase in sales. Especially if they have an e-commerce store or a mobile app or both.
Though launching a mobile app maybe a costly endeavor, it contributes greatly to e-commerce sales. It’s marketing and sales tool you should, at least, consider down the line.
Similarly, an e-commerce website is now a must-have for any fashion retailer that wants to grow their business.
Your customers expect you to have a website because they will look you up and visit that site. As they begin to trust you, they’ll start making their purchases from that site.
But creating a website or a mobile app aren’t enough. The secret to growing your business is turn customers from one-time or first-time buyers into loyal, repeat customers. An 5% increase in loyal customers has been found to boost profits by 25% to as high as 95%.
So why aren’t you building loyalty and using a rewards program, again?
The best way to start creating a loyal following is to use a loyalty program. And Gameball has you covered. You can sign up and explore our free trial. Or you can pick one of our paid plans to integrate with your website.
