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Why Customer Loyalty is crucial in the fashion industry

Feb 18, 2022 | Uncategorized

By Laura Bjerre Schwalbe

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Reading Time: 3 minutes

Stakes are incredibly high in fashion.  

With a global market value of 759,5 billion dollars in 2021, fashion is the number one e-commerce industry in the world. The industry is dominated by giants and, as a result, the fashion consumer has high expectations and can be hard to win over.   

That means the competition is fierce. And the only way to differentiate your fashion e-commerce is by securing a personal shopping experience that your visitors want to come back to again and again.   

Here, a well-thought-out loyalty program that makes the consumer feel truly special is the way to go.

Loyalty is on the run!

It’s not easy. According to a 2020 survey from Qubit, 37 % of consumers shop with a higher number of different brands than they did the year before. And 46 % are less loyal to brands than they used to be.   

This doesn’t mean that loyalty isn’t important.   

In fact, 81 % of those who subscribe to a loyalty program say that their membership increases their spend – especially for Millennials. And 57% of shoppers are willing to share their information if they receive unique deals to satisfy their shopping cravings.   

That means you need to create the right incentives for them to choose you over your competitor.  

Want to avoid becoming fashion roadkill? This blog post serves you 4 ways a loyalty program benefits your personalization efforts in the fashion industry – from helping you segment your best customers (or your worst) to creating the omnichannel experience that transform visitors to trusted ambassadors.

Benefit 1

Recognize your best customers – and get more of them  

A loyalty program is not just a rewards system. It helps you identify your customers – from seasonal buyers to strong fashion ambassadors.  

SPORT24’s rewards program offers certain bonuses to high-value customers. If a customer spends 8000 DKK in a year, she will receive 10% of that amount in a yearly bonus – 800 DKK, that is.  

That creates a strong incentive to make big purchases with SPORT24 and not with a competitor. Importantly, the system makes it easy for SPORT24 to recognize their very best customers, model look-alike audiences based on them, and use the collected data to create personalized experiences catered to them.  

After all, one of the major benefits of loyalty programs is data collection. And you don’t have to ask for much to start. With just an e-mail for sign-up, you can gradually let information pile up over time as you and your member get to know each other better. 

Benefit 2

Be consistently present

A loyalty club helps you expand your customer data far beyond just online shopping. Depending on your chosen loyalty strategy, you can create a myriad of different content to interact with – special events, articles, contests, or offers, both online and in store.  A true omnichannel experience. 

It’s the ideal community for developing strong and long-lasting connections with your customers.  

These initiatives not only create an engaging customer experience where she feels special and cared for. They also create a great opportunity for up-and-cross selling by introducing her to new or related products in a different context. All these online and offline interactions can be used to improve the recommendations the customer receives on web, in apps, or in e-mails.   

Benefit 3

Reduce churnbecause people hate wasting points 

Churn is a problem that is hard to deal with in any industry, not only fashion. By creating a reward system that allows customers to gradually mature, they are less likely to churn because they build up points and perks.  

The loss associated with turning to a competitor will be significant.    

Remember “loss aversion theory”? Well, in short it describes how people’s initiate investment determines their future activities. Customers who benefit from shopping in your sportswear store will make it a habit. Especially if you have an associated app with tiers, badges, or content that makes the customer feel connected to your brand.   

How to nudge your customer to make a fast decision  

Magasin’s Goodie App lets the customer follow her own progress and its perks: How many ‘goodies’ she has achieved, how close she is to her next ‘goodie’, and what events she has signed up to.   

The app also allows the customer to scan a product in store to learn more about its benefits – which gives you information about what products she is eyeing. It digitalizes an otherwise analogue shopping experience and turns it into valuable data. 

Benefit 4

Deliver lasting customer experiences 

This is the ultimate benefit of a loyalty program. A well-running loyalty system is mutually beneficial by offering customers the convenience and benefits that keep them hooked while gifting you the data that personalization depends on.   

80% of shoppers are more inclined to shop with a brand if they feel valued and receive tailored experiences  

With a loyalty program you maintain your customer relationships by making value accessible to customers on a continuous basis. By offering free shipping or return, or tips on styling or trends, you keep customers’ interest alive. The goal is to secure their attention for the next purchase. And the next. 

Customer Data Platform and Customer Loyalty: A match made in heaven 

Without a place to store and activate all this valuable data, you will waste it. This is what a Customer Data Platform is made to prevent.  

A Customer Data Platform is a single operational platform that empowers you to unify all your customer touchpoints from every data source and make the data available to all activation channels in your tech stack. 

With a CDP, you break down the data silos that can occur when your data stems from multiple different platforms, and you get a Single Customer View of each of your customers, their interests, and their interactions. 

 It helps some of the most central pains in fashion:  

  • Calculating the Customer Lifetime Value of each customer, so you can create segments that help you target your best customers. 
  • Avoiding the the unfavorable customers that really cost you money. A common pain in the fashion industry is buyers that return more dresses than they keep. A CDP can help you segment these customers, so you can avoid offering promotions, discounts, or free shipping to those that take advantage of it.   
  • Predicting which customers are about to churn and automating the prevention strategies that keep them hooked.  

Raptor Services can’t help you build a loyalty system. There are other experts for that. But we can deliver the brain that connects your loyalty system with any other touchpoint in your business – your website, e-mails, physical store, and social media – so you can create the customer experience that keeps them coming back. 

Want to learn the art of nudging in fashion?

Personalization is the simplest way to make customers come back.

In short… 

Loyalty and personalization go hand in hand.   

In competitive industries like fashion, the right customer loyalty strategy will set you apart from the competition, create lasting customer relationships, and serve as a goldmine of valuable data for your marketing efforts.   

A Customer Data Platform ties it all together. It gives you insight to every single visitor, so you can target your favorites – and avoid the less favorable ones. 

Want to boost sales in your fashion webshop?

Learn how personalization can lead the way to increased sales.

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