Consumers are reassessing their purchasing habits, providing an opportunity for retailers and DTC brands to win over new customers and convert them into regular shoppers. A new survey by Clarus Commerce suggests that premium loyalty programs, which offer specific and immediate perks, could be a powerful way for footwear companies to attract repeat business.
In a study of 2,500 shoppers, customer loyalty platform Clarus Commerce found that nearly two thirds of respondents said their loyalty was harder to maintain than ever before. For retailers, this creates a precarious situation, particularly in the current landscape when overall spending is down. While some of these companies may have tested out loyalty programs in the past, the survey recommends taking a specific approach with premium loyalty programs, in order to reap the rewards.
According to Clarus, the main differences between a traditional and premium loyalty program are the intended audience and the way benefits are earned. Traditionally, retailers target all shoppers, who then earn points tied to how much they spend, thus requiring a long-term commitment. Premium programs offer immediate benefits upon paying a sign-up fee and are usually aimed at only a company’s most active consumer base.
Clarus reported that 69% of those already in a premium program planned to join additional ones in 2020, with 74% of all millennials intending to do so. Of those not currently in a program, 70% would join one at a preferred retailer if the benefits were deemed “valuable,” and 54% would specifically be interested in programs at clothing or accessory brands.
When asked to rank the most beneficial offerings of a loyalty program, a majority of respondents chose free shipping (66%), instant discounts (60%) and free giveaways (56%). Other popular features included faster shipping (47%), surprise rewards (45%) and exclusive deals, such as access to pre-sales (35%). Deterrents were price (35%) or lack of clear value (42%).
Showing value is important for member acquisition: “Brands can’t wait for customers to stumble on the program themselves — they need to be proactive about showing the clear, personalized value of upgrading to a premium program,” said the report.
For retailers considering which customers to target, Clarus suggests that the millennial demographic is one to pursue. Compared to non-millennial loyalty members, they shop more frequently at their participating retailer — in fact, 66% of millennial members visit at least once a week, compared with 58% of other demographics. They are also more likely to jump from a free program to a premium one, at a rate of 74% compared with 67% of all respondents.
The report also found that program membership could help maintain loyalty, even when competitors offer cheaper product — 88% of respondents said they would choose a retailer whose premium program they belong to, over a competing retailer offering a lower price.
That customer loyalty increases during the holiday season, with 95% of millennial respondents saying they shop where they have a membership at that time. Retailers still weighing up whether to implement a premium loyalty program may want to act fast, in order to capitalize on this spend; Clarus found that 48% of millennials begin their holiday shopping before October.