Resources > Articles > Fashion Loyalty Programs: A Comprehensive Guide (2020)

Fashion Loyalty Programs: A Comprehensive Guide (2020)

With the rise of fast-fashion brands, which offer styles similar to more expensive brands, at far more affordable prices, deep transformations have occurred in the industry. We now have no less than 52 micro-seasons of fashion! Not only that, but constant markdowns have led customers to expect coupons, rendering this type of incentive less effective. Now, one thing is as clear as the summer sky: offering high-quality products and discounts is no longer enough to retain customers. Brands need to offer benefits that engage, such as fashion loyalty programs, and build a brand story that resonates with customers.

“The best way to retain buyers in the fashion industry is to focus on the most valuable customers rather than chasing new ones. You’ll need a data-driven focus with personalization of service, channel, fashion, and reward. Avoid all price wars. The loyalty program provides the framework for the retention effort. It must be multi-channel, multi-tender – something that many fashion retailers have been unwilling to do in the past. Segment the loyalty database and differentiate the reward offering and all soft benefits according to a segment.”

Mike Capizzi
Director of Education at The Loyalty Academy – a Wise Marketer Group company

What Is a Fashion Loyalty Program?

Fashion loyalty programs are customer retention tools that are built from the ground up based on a fashion brand or retailer’s needs and unique characteristics. First of all, such loyalty solutions are easily recognizable, thanks to a variety of program structures and features you rarely see in other verticals. These include, but are not limited to: perk systems, early access to product releases, enhanced return options, in-store stylist sessions for high-tier members, and so on.

“Only a sophisticated customer loyalty programme can create loyal customers and this requires a clear strategy, a strong CVP and CEX processes and a best in class CRM/Loyalty platform. Members should receive relevant and attainable offers in their preferred media and be encouraged to interact with the business. Loyalty is a journey, not a destination, and should be the most important tool in the marketing strategy.”

Mike Atkin
CLMP – The Customer Strategy Network

Fashion loyalty programs are also innovative in the sense that they often reward non-transactional engagement. For example, brands can reward their members for bringing back old clothes, wearing clothing with smart tags, or participating in Instagram contests,

It’s also worth highlighting that fashion reward programs focus heavily on omnichannel engagement. From supporting app-based experiences to store-specific campaigns and technologies, they aim to create a unified customer profile, which fuels personalization.

“A best-practice loyalty program will give brands the ability to capture, analyse and access customer data. This provides the brand’s marketing team with a structured program framework to work with, allowing them to strategically communicate with customers throughout their lifecycle, maximising sales opportunities by segment and delivering value. More importantly, a good program will be able to recognise signs of churn or disengagement and move to rectify – this will ultimately assist in retention.”

Max Savransky
Chief Operating Officer at Loyalty & Reward Co

The Biggest Customer Retention Challenges for Fashion Brands and Retailers

The number-one priority for fashion companies — especially those in the fast fashion segment — is to encourage people to spend their fashion budget exclusively at their stores. But increasing customer lifetime value (CLV) with a VIP program is just the first step.

“Keeping customer engagement during a very uncertain time has its challenges but I think the fashion industry has adapted well and we have certainly learnt a lot more about customers. Getting the right loyalty program in place for your brand will definitely encourage repeat customers. Our brand is at an early stage looking at how we want to ensure we get this right for our customers and ensure we get the best omnichannel experience for them.”

Chloe Smith
Digital Development Manager at Quiz Clothing

Some other KPIs that a customer loyalty program can boost include:

  • Reduce customer churn: Avoid high churn with a reward system that allows customers to gradually progress through the program. Gamification features, tiers, badges, and loyalty communities help to foster a habit for members to continually interact with the program on a daily or weekly basis.
  • Increase footfall: Utilizing store-specific campaigns, receipt-scanning, POS systems, digital loyalty cards and other technology ensures that the time customers spend in the store will be pleasant, fun, and above all, convenient.
  • Show eco-consciousness: Modern customers prefer to align themselves with companies that care about nature. Fashion companies can demonstrate their green side by rewarding those who give to charity or donate used clothes for a good cause.

“The challenge for fashion brands is to remain relevant when more fundamental issues like health and safety are no longer a given. A loyalty programme is the most powerful way that a brand can demonstrate its loyalty to its customers. The permission to communicate with customers creates the opportunity for direct conversations, to showcase stories that inspire the customer to continue to love the brand and ensure they return when their spending power permits.”

Paula Thomas
Host of the ‘Let’s Talk Loyalty’ Podcast

The Best Loyalty Program Features to Help Your Fashion Company Stand Out

Here’s a list of fashion loyalty program features you should consider implementing if you’re planning to create one of the best loyalty programs in the world.

1. Next-Gen Program Structure

Earn & burn logic

This is the most common program structure, where members earn points by making purchases, signing up for the newsletter, writing user reviews, etc. It’s the easiest to design, but not very memorable on its own. That’s why we recommend combining a point system with other reward structures to create a hybrid program.

Tiers

Highly popular among fashion loyalty programs, tiers (or ranks) are the ideal approach to long-term engagement. Earning points or making purchases help members climb the ladder, with each new tier unlocking more attractive benefits. Being a Diamond or Premium tier member, for example, counts as a status symbol for many and inspires other members to follow their example by becoming a more actively engaged customer.

Tiered programs for fashion loyalty programs

With tiers, customers have long-term goals to work for, and reminding them about how close they are to the next level is a good reason to reach out to people.

Perks

A rather unique loyalty solution, the perks system, grants the same benefits for each and every member. Instead of creating a haves and have-nots economy, this approach increases CLV by cherishing the customer. In this case, rewards usually consist of a welcome gift, free shipping, and early access.

2. Sophisticated Reward Experience

Experiential rewards

Being a loyalty program member should be memorable. From time-to-time, surprise customers with an unexpected birthday reward, or put high-end gifts up for grabs, such as merchandise signed by a popular designer or influencer.

To learn more about loyalty rewards that work, we have a dedicated ebook that will help you get inspired and start planning.

Gamification 

Another way to entice people to return to the loyalty program is to add in some gamification elements. The term “gamification” can cover multiple features, such as gamified profiling, prize wheels, reward calendars for the holidays, or even arcade-like games where customers can try to win a prize.

Social media contests

Organizing a comment contest on Twitter or an Instagram contest can help you boost virality for a relatively low cost. The recipe is simple: to become eligible to win a prize, members simply need to post a comment with a specific hashtag, or upload a photo of themselves wearing a specific item of clothing.

“The new reality has meant that more customers than ever are choosing to shop online. However, the way to retain customers has not changed. It should always be about offering great service and products and engaging customers with your brand. A loyalty program rewards and engages customers building a sense of community and provides additional incentives to choose to keep purchasing from the brand.”

Emma Brannan
Marketing Director of JoJo Maman Bébé

VIP clubs

Special interest groups and early access to upcoming product releases is the go-to way to spice up a fashion loyalty program. People just love the idea of being an insider, or having the ability to buy something before it officially becomes available. And the best thing is: this type of benefit costs you nothing!

Special interest groups are a breakout hit among product-savvy customers, demonstrated by the huge success of the Sneakers Club, a VIP club inside LuisaViaRoma’s loyalty program.

3. Seamless In-store Engagement

Mobile Passes as digital loyalty cards

Physical cards are often left forgotten at home. Instead, switch to digital loyalty cards that are always available on the smartphone. There is no need for customers to install anything, and cashiers can scan the digital cards with a POS device during checkout to identify customers making a purchase. Doing so enables you to gather more accurate information about your loyalty members.

Learn more about digital loyalty cards and Antavo’s Mobile Wallet solution in this video.

Send push notifications

Another benefit of digital loyalty cards is that you can use them to send push notifications to customers about relevant deals. And to take your push messages to the next level, use offer management and geolocation to give customers with special offers whenever they’re near their favorite store.

Design a loyalty app

With a smartphone app, you can reach customers on-the-go. Moreover, you’ll always be in arm’s reach. Though people are very conscious about what kinds of apps they download, a small loyalty program incentive can help sweeten the deal.

In our webinar with Mito, we discussed an innovative app accelerator solution that can shorten the loyalty app development by months.

Receipt scanning

For brands selling through retailers, receipt scanning is the ideal solution to deliver the loyalty program to customers, wherever they shop. All they have to do is take a picture of their receipt, and upload it in a designated section of the website or on the loyalty app. Then, after a short delay, the point balance will be updated through the loyalty provider.

Another way for brands to boost in-store interactivity when selling through partner retailers is to place a QR code on product tags.

7 Inspiring Loyalty Programs for Fashion Brands & Retailers

To better understand how each of these features work, let’s look at some of the largest fashion loyalty programs in the US, Europe, and Asia.

1. H&M Membership Program

Widely known in the world of fashion, H&M launched a reward system that ticks all the boxes for a next-gen fashion loyalty program.

  • Customers earn one point for every $1 spent, and after earning 200 points they receive a $5 coupon.
  • Newly registered members receive a $10 discount as a welcome gift, and more exclusive discounts are available later on.
  • Members receive access to free online returns, birthday offers and insider shopping events.

Why it works:

H&M’s customer loyalty program is a perfect blend of transactional benefits (coupons) and community-driven experiences. It also makes shopping more convenient with the ‘Shop now and pay for items later’ feature.

Although they don’t have a full-fledged tier system, H&M does have one bonus membership level for those who reach the 500-point milestone. This also works as a more accessible VIP level, as it unlocks additional benefits that regular members don’t have.

2. Simply Be Perks

Part of N Brown and headquartered in Manchester, Simply Be is the go-to digital destination for size 12-32 women who adore fashion.

  • The loyalty concept is avant-garde: instead of having customers collect points or scan loyalty cards, they offer personalized rewards based on each customer’s history of interactions with the brand.
  • Rewards are all about customer well-being, and were carefully selected after surveying active customers.
  • Some of the privileges are made possible through Simply Be’s partnerships with brands in beauty, fitness, travel, entertainment and fine dining.

Why it works:

Simply Be Perks encourages customer participation with user-generated content, which is fully in line with today’s trends in decision-making for fashionistas. It is a highly personalized concept that lets Simply Be offer experiential rewards that cater to millennials’ preferences and are awarded based on customer value, individual preferences, and past rewards claimed.

Simply Be also runs a permanent offer on its site, encouraging loyalty program members to share photos of themselves, which has helped them build a fashion-loving, like-minded community.

3. Nicce – N Coin

A streetwear brand started in 2013, Nicce focuses on the young, urban demographic. The company has a mostly online presence, with only one brick-and-mortar store. However, Nicce ships worldwide.

  • In the loyalty program, spending £1 earns 5 N coins.
  • Each point is equal to a £0.01p discount.
  • Creating an account, referring a friend and performing special promotional tasks are worth a large amount of N coins.

Why it works:

N Coins is a loyalty program that treats loyalty points as a real currency. Since it’s easy to collect and redeem, there are plenty of engagement opportunities for customers.

Rewarding non-transactional activities is the key to maintaining customer attention.

4. Urban Outfitters – UO Rewards

Multinational lifestyle retailer Urban Outfitters targets young adults with a merchandise mix in women’s and men’s fashion apparel, footwear, beauty, and wellness products.

  • The UO Rewards loyalty program has three tiers.
  • Loyalty points are given for purchases, registration, writing product reviews and visiting the UO site or app.
  • Member benefits include early access to products, anniversary discounts and a chance to win a prize in hashtag contests.

Why it works:

As a brick-and-mortar chain, Urban Outfitters allows customers to use a dedicated app to track their progress and identify themselves by having the app scanned — a great way to boost in-store loyalty.

Urban Outfitters has regular giveaways as well, with countdowns displayed clearly on top. This adds a little FOMO effect to the mix.

5. Love, Bonito – LBCommunity+

One of the largest vertically integrated, omnichannel women’s fashion brands in Asia, Love, Bonito targets the modern Asian women both online and in stores. Its loyalty program, LBCommunity+ goes all out in terms of exclusivity:

  • There are birthday rewards, early access to products and private sales, as well as surprise experiences — and all of them scale in value depending on the member’s tier.
  • Gold-tier members can book a stylist session with a brand influencer for free in one of their Singapore stores.
  • LBCommunity+ is powered by Antavo and allows loyalty program members to use the Mobile Wallet to effortlessly earn points at any store location.

Why it works:

Love, Bonito’s program is a great example of how special treatment forges a bond with customers. If you can make them feel special and valued, they’ll keep coming back, just to be part of the experience. And they’ll tell their friends about it, too.

LBCommunity+ utilizes Antavo’s Mobile Wallet system on smartphones. The loyalty cards are updated when the user reaches a new membership level, so customers never miss out on a reward or benefit while shopping.

6. Anthropologie – Anthroperks

Anthropologie is an American clothing retailer operating in over 200 stores. Their loyalty program, Anthroperks, is similar to Simply Be’s concept, with a few key differences.

  • There are no tiers or points, only members-only perks that apply to every registered member.
  • Participants enjoy paperless returns and free shipping over $150+ orders.
  • Other benefits include early access to new collections and birthday rewards.

Why it works:

Anthropologie demonstrates that fashion loyalty programs are equally capable of building communities and making the shopping experience more pleasant. Rewards such as free shipping could have been tiered benefits, but turning them into a perk generates loyalty by building customer gratitude instead.

The loyalty program membership page plays an important role in showcasing the rules and benefits for members.

7. TK Maxx – Treasure

TK Maxx is a store chain selling fashion clothes and accessories, homewares as well as gifts. TK Maxx demonstrates that even if fashion isn’t the only product you sell, your brand can still benefit from a fashion loyalty program.

  • TK Maxx Treasure offers purchase-based surprise-and-delight rewards.
  • Customers can redeem their rewards on a monthly basis using their membership card.
  • The program offers in-store VIP experiences and access to flash events.

Why it works:

TK Maxx’s fashion loyalty program taps into the desire for exclusive experiences and easy-to-redeem rewards that keep customers coming back for more. It also features a creative combination of online and offline experiences, ensuring that engagement happens across all channels.

TK Maxx emphasizes the experiences that their audience is interested in: culinary events, decoration and eco-friendly items.

Dress for Success

High CLV, a plethora of customer data, in-store tech, gamification: retailers and brands with a loyalty program can have all of these with a well-planned reward system. If you’re interested in the capabilities that Antavo offers as a pure-play loyalty provider, feel free to include us in your loyalty program RFP.

In the meantime, feel free to get inspired by downloading our case study to learn more about Love, Bonito’s loyalty initiatives.

Zsuzsa Kecsmar
Zsuzsa Kecsmar
Zsuzsa is CCO and Co-founder of Antavo, listed by Forbes as one of Europe’s top 100 female founders in tech. After acting as Antavo’s CMO for nearly a decade, she took over the role to help the company’s clients. She is also a former journalist and has been awarded by the European Commission.