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Luxury Fashion Loyalty Programs: A Comprehensive Guide (2020)

Luxury fashion loyalty programs aren’t just a myth. A reward system can indeed work in this industry without cheapening the brand image; you just need to take the right approach. Loyalty programs are no different from any other tool in your arsenal, as you can consistently reshape them to fit your needs.

Luxury fashion lives and dies on customer engagement. People don’t come to you for discounts or bonus points, but for VIP treatment they can’t get anywhere else. This lesson is especially relevant in the post-COVID-19 era, where people are hungrier for impactful shopping moments than ever before. In order to stand out and forge long-lasting customer loyalty in the current climate, luxury fashion loyalty programs must focus on unforgettable experiences.

What Is a Luxury Fashion Loyalty Program?

There’s one word that describes luxury fashion loyalty programs perfectly: exclusivity. Affluent buyers wish to be rewarded just like anyone else, just with the added expectation of higher-class treatment. Therefore the reward system should focus on gifts and benefits that either hold higher value or only available for the upper echelon of the member base. 

In terms of gifts, luxury fashion loyalty programs have a higher tendency of featuring experiential rewards, including designer clothes that are otherwise unavailable for purchase, signed merchandise from famous fashionistas or influencers, as well as partner rewards from high-end restaurants and hotels. 

As for exclusive treatment, luxury fashion loyalty programs offer VIP tiers that are only available to the top 100 highest spenders. Entering such a prestigious group requires a high customer lifetime value in exchange for an outstanding status within the community.

In this period of uncertainty in the luxury fashion industry, we needed to re-invent our marketing strategies and we needed to do it very quickly. Our luxury fashion-specific loyalty program is helping us retain our customers too: the increase in sales we are seeing in this period, indeed, is mainly due to our long-term customers rather than the new ones.

Francesca Montanari
Senior CRM Specialist at LuisaViaRoma

The Biggest Customer Retention Challenges for Luxury Fashion

The lack of personalization is one of the biggest challenges luxury fashion companies face. In order to nurture top spenders and give them a taste of exclusivity, the personalized experience needs to be both scalable and readily available across all channels. Other challenges include:

  • Most customers only purchase once, resulting in high churn rates
  • The top segment is already loyal — with store associates sometimes knowing customers on a  first-name basis — but there’s little to no incentive to make first-time buyers stick
  • Luxury brands are often afraid of cheapening their brand with discounts and earn & burn style program elements
  • One-on-one communication is highly important, yet hard to achieve
  • Brands require benefits and rewards capable of exciting affluent VIP customers who have it all

Luxury brands used to have hidden, inconsistent, and fluctuating prices depending on where and when you were shopping. eCommerce and digital changed that. Today the customer is much more tech-savvy and spends time to shop around to get the right deal. That means they have become less brand loyal. Post-COVID, the competition for full-price customers will be even more pronounced. With a glut of stock brands will be tempted to discount to incentivize but don’t want to damage their brands’ position.

Recruiting and keeping full-price paying customers is a massive headache. Also, hundreds of thousands of brands, that were retail or wholesale, have now opened eCommerce. Online it’s going to get even more crowded and increasingly difficult to be seen and heard especially against the backdrop of heavy discounts.

A loyalty program is a fantastic way to retain a brand’s communication with customers beyond the buying cycle. If you can get customers to engage and invest time on that program, and your brand is helping them on a journey, then you’re effectively building a strong bond and relationship. That’s the key to getting them to return to buy again.

Joanne Yulan Jong
Creative Director and Founder of Yulan Creative

Best Loyalty Program Features to Stand Out as a Luxury Fashion Company

Being able to change and adopt new strategies is the route to success. Transforming the ways you engage with customers will no doubt yield positive changes in their spending habits. Contests, exclusive clubs, or user-generated fashion content are other forms of gamification you can use for the luxury fashion audience without cheapening the privilege program. By making the program available on a smartphone app, you can unlock even more new opportunities.

The convenience and ease of accessing and managing a loyalty program via a brand’s retail app is critical for luxury brands to continue to retain customers and keep the brand at the forefront of shoppers’ minds. On the Poq platform, we see shoppers spend more time with a brand via an app than compared to any other digital channel. Utilizing this preference and rewarding engaging behavior with a loyalty program could see luxury shoppers continue to connect with a brand.

Helen Slaven
Chief Revenue Officer at Poq

Here are some other features that could benefit greatly your luxury fashion loyalty program.

1. Offer Membership Tiers Instead of Loyalty Points

It’s important to understand that earn & burn-style campaigns aren’t your only option. Instead of focusing your program solely on points, experiment with a system based on behavior, such as a tier system. That behavior could be spending habits (the more money your customers spend in the store, the higher the tier they will reach), or a combination of things, e.g. completing a challenge, donating to charity, or visiting your website every day for a specified period of time. All of these activities would, in turn, unlock tier-specific rewards.

These exclusive gifts should be one-of-a-kind items that aren’t available elsewhere. Designer phone backgrounds, limited edition product samples, and rare art prints are just a few examples. Be creative!

The benefits of tiered loyalty programs:

  • Easy to understand
  • Offer meaningful rewards
  • Emphasize long-lasting VIP status

In a points-based system, a customer can easily run out of points by spending them. Alternatively, in a tier-based system, the benefits won’t disappear so easily. For more insights, check out our video.

2. Create Memorable Moments With Surprise & Delight

Not every reward has to be expensive to make an emotional impact. Simply giving something when customers least expect it is enough to form long-lasting loyalty and entice customers to make an unplanned purchase. 

For instance, sending the valuable members a birthday message that, in addition to giving a small benefit, recounts their history of being a customer (mentioning their favorite products, best gifts they redeemed, current tiers, the day they joined and even the private or community events they attended) show that you, as a brand, truly care.

Obviously, executing such a hyper-personalized marketing campaign is only possible if you established a CRM system capable of collecting and sorting such data. Additionally, you can collect further information — product preferences, favorite colors, likes and dislikes, personality, hobbies — with gamified profiling.

Another form of surprise & delight is to invite brand advocates and top spenders to the exclusive birthday or store opening events. Luxury fashion giant Hermés is well-known for its launch events. Image source: Fig Media- Photography

Another form of surprise & delight is to invite brand advocates and top spenders to the exclusive birthday or store opening events. Luxury fashion giant Hermés is well-known for its launch events. Image source: Fig Media- Photography

3. Keep Members Engaged With Experiential Rewards

Showing VIP customers that you are genuinely invested in building a relationship fosters trust and brand loyalty. Offering unique experiences is a great way to make this happen. You can maintain engagement in the following ways:

  • Motivate social butterflies to share their latest purchase on Facebook and Instagram
  • Hold members-only events and experiences, such as a meeting with a top designer
  • Organize a limited-entry cocktail party
  • Say ‘thank you’ to your top-tier customers with a signed gift
  • Allow customers to contribute to new fashion ideas
Those who are into luxury fashion pride themselves on being in a special relationship with their favorite brand. Therefore, the rewards you give them must be close to their heart as well.

Those who are into luxury fashion pride themselves on being in a special relationship with their favorite brand. Therefore, the rewards you give them must be close to their heart as well.

4. Invite Them to Exclusive Clubs

Access (or lack of access) to certain benefits is what adds true spice to a privilege program. Knowing that only the crème de la crème of the community is allowed to access a certain feature makes that feature more desirable for customers across the board. For this reason, consider setting up special interest groups that revolve around your most popular products.

One stellar example is LuisaViaRoma’s Sneakers Club, where loyalty members can pay an entry fee in points in order to join. Once they’re in, they get early access to upcoming footwear releases ahead of the public. (Most of the time the product doesn’t even make it to the shop floor, because they are sold out to club members!) Special groups like this bring the true essence of exclusivity to a loyalty program.

LuisaViaRoma’s Sneakers Club (luxury loyalty program) sets a high entrance fee of 2,000 points, but in return, you’ll get offers that are hidden for non-members.

LuisaViaRoma’s Sneakers Club (luxury loyalty program) sets a high entrance fee of 2,000 points, but in return, you’ll get offers that are hidden for non-members.

5 Inspiring Loyalty Programs for Luxury Fashion Brands and Retailers

1. LVR Privilege – LuisaViaRoma

LuisaViaRoma is a luxury retailer based in Florence Italy. They sell established and emerging designer brands, such as Bottega Veneta, Gucci, and Off-White. The company’s loyalty program, LVR Privilege, is powered by Antavo and offers multiple features aimed at creating a unique and exclusive experience.

  • Users can start earning points by completing a purchase (spending €1 earns 1 point), sharing their purchase, and completing a client profile. 
  • There are four tiers in total.  At the highest tier, you can get the Privilege Card, which gives 15% off on all purchases for six months
  • LVR Privilege also grants a gift on customers’ birthday
  • The Sneakers Club is an insider VIP club that gives early access to upcoming products.

LVR Privilege bannder

2. InCircle – Neiman Marcus

Neiman Marcus is an American chain of luxury department stores, including the Bergdorf Goodman luxury chain. The company offers InCircle, a loyalty program with eight different membership tiers, accessible through their NM and BG Credit Cards.

  • Standard tiers range from Circle One through Circle Six, offering benefits from points to the concierge to free shipping
  • The two additional tiers are called President’s Circle and Chairman’s Circle and offer the highest rewards
  • Once members reach Circle Five, they have access to the InCircle Concierge, a resource for planning vacations, getting event tickets, and obtaining popular restaurant reservations
In general, loyalty programs have three to four tiers to avoid confusing their members. Luxury fashion loyalty programs, however, deal with exclusive benefits, which calls for ranks to climb, otherwise, members could reach the higher tiers too quickly.

In general, loyalty programs have three to four tiers to avoid confusing their members. Luxury fashion loyalty programs, however, deal with exclusive benefits, which calls for ranks to climb, otherwise, members could reach the higher tiers too quickly.

3. Hugo Boss Experience – Hugo Boss

Hugo Boss is a German luxury fashion house selling men’s and women’s wear, fragrances, and accessories, specializing in creating high-quality tailored men’s suits. The loyalty program, Hugo Boss Experience stands out for ditching both the earn & burn and tiered approaches in favor of an instantly available perk system

  • The loyalty program is free-to-join with no points or levels
  • All benefits are available for every member from the get-go
  • Rewards include complimentary alterations and monogramming, private styling appointments, and VIP events
  • The program even offers door-to-door Uber delivery from the store
Hugo Boss approaches exclusivity differently. Instead of gating off the rewards, the company extends rewards to everyone, knowing that only recurring buyers would be interested in monogramming private styling appointments.

Hugo Boss approaches exclusivity differently. Instead of gating off the rewards, the company extends rewards to everyone, knowing that only recurring buyers would be interested in monogramming and private styling appointments.

4. The Curator – MatchesFashion

MatchesFashion is a luxury retailer based in London, offering hundreds of luxury brands such as Prada, Saint Laurent, and Burberry, for men and women. Their program, The Curator, awards points for purchases, allowing shoppers to progress through membership tiers as they shop. 

  • Spending €10 grants 1 Curator point
  • Features a 5-level tier system, featuring experiential rewards, such as  early access to private sales, free shipping, and styling consultations
  • The Curator also offers birthday rewards and personalized edits to give members relevant benefits
MatchesFashion encourages customer engagement with experiential rewards and a tier system where purchases directly impact leveling.

MatchesFashion encourages customer engagement with experiential rewards and a tier system where purchases directly impact leveling.

5. Moda Rewards – Moda Operandi

Moda Operandi is a ‘fashion discovery platform’ that allows online shoppers to browse and shop directly from designers’ runway upcoming and current collections. The company is specialized in the sense that it offers multiple services for customers. Moda Rewards is the loyalty program, and it’s a traditional earn & burn point system. 

  • Free to sign up, 500 points upon signing up
  • 1:1 spend to points ratio
  • For every 1,000 points earned, $20 reward on account
  • Moda Private is a personal shopping service, tailored to the client’s shopping needs
Moda Operandi also has showrooms in New York, London, Hong Kong where customers can request a session with a private stylist or partake in members-only events, classes and panels.

Moda Operandi also has showrooms in New York, London, Hong Kong where customers can request a session with a private stylist or partake in members-only events, classes and panels.

Smart Customer Retention Instead of Discounting

High-end customers want to be pampered after reaching a new milestone. You can easily fulfill their expectations by offering exclusive gifts, unique services, and personalized experience. People will love it!

For more information on running a successful loyalty program, check out our ebook. We also love sharing our knowledge, so feel free to book a demo and we’ll show how our loyalty platform can work for your business.

The Definitive Guide to Creating a Successful Loyalty Program

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.