How to Build a Loyalty Program in the Apparel Industry

August 4, 2016 Alex McEachern

In 2015, the U.S. apparel market was valued at approximately 343 billion U.S. dollars.  While these numbers are astonishing, they’re merely one indication of how profitable the apparel industry has become.  With a global value hovering around 3 trillion dollars, retailers in the apparel industry are in a constant battle to secure new customers and keep them hooked.

When combined with the seasonality of products and potential for high customer lifetime value, this competition makes a loyalty program in the apparel industry an imperative for staying three steps ahead of competitors.  The best part?  You can still provide your customers with an exceptional experience and great fashion while doing so.

Loyalty Program in the Apparel Industry title

In order for your apparel rewards program to succeed, your customer lifetime value, purchase frequency, and average order value need to be relatively high.  Otherwise, your business may not be able to sustain your loyalty strategy and the time you invest in developing it is spent unwisely.

Loyalty Program in the Apparel Industry overview

(Find out how these metrics and your company’s margin are perfect for a loyalty program HERE!)

With the average household spending more than $2,000.00 per year on apparel and related products, though, you have nothing to worry about.  With clothing changing every season, customers are given at least four good reasons to shop at your store every year, and with changing styles and fashions each purchase has the potential to be extremely high.  These factors increase each customer’s lifetime value, making a loyalty program in the apparel industry an excellent idea.

Loyalty Program in the Apparel Industry competition

Competition is the last thing you need to keep an eye out for, but with markets like children’s wear growing over 15% in five years, you can bet competition is out there.  While your first instinct might be to offer lower prices, I can assure that this model is unsustainable and will get you nowhere fast.  A well-branded loyalty program, on the other hand, is an ace in the hole.

Loyalty Program in the Apparel Industry strategy

(Increase profit, build community and more with a loyalty program designed with our FREE guide!)

Unlike many other industries, apparel is highly visual.  Customers are drawn to brands that look good and are in the public eye, making social media sharing and promotion the key to your acquisition and retention strategy.  Eliminate the switching barrier of price by creating value through encouraging social sharing.  Rewarding customers for these types of action helps build a community that people will want to be a part of, attracting new customers and retaining old ones.

Loyalty Program in the Apparel Industry social media

(Discover how to acquire, retain, and nurture your best customers in the full guide!)

With younger customers checking social media over 100 times per day, applications like Instagram become a natural extension of your customer experience.  Incorporating your brand into daily routines demonstrates that you understand their lifestyle, and these types of considerations do not go unnoticed by today’s savvy shoppers.

You can (and should!) even take your customers’ desire to share their lives with others one step further and offer rewards for writing reviews online.  Customers are more likely to trust other customers, and instilling this type of conversation within your program helps build a community that is both inclusive and exclusive.  When potential shoppers see how much people are enjoying your products, they’ll want to join in!

Loyalty Program in the Apparel Industry community

(Learn about the power of tiered rewards and how a loyalty program can capitalize on them)

Above all, a great loyalty program in the apparel industry should have a well-developed visual strategy.  Placing emphasis on your product’s packaging and the branding of your loyalty program will raise shoppers’ awareness of your program.  The more aware they are the more likely they are to engage, and this engagement will start to spread as they begin to share and review your products.

Loyalty Program in the Apparel Industry diversified earning

(Find out more about the impact of strong branding in the Loyalty Programs for Apparel Guide)

Getting people excited about participating in your rewards program is only half the battle.  Designing a program that encourages people to engage can be tricky, but designing a rock-solid earning and redeeming model  that provides value for your customers makes it easy.  Besides being rewarded for making purchases, offering your customers the ability to earn rewards for reviewing and sharing your products is paramount to extending your brand’s reach.  People love to show off their newest purchases, but it never hurts to give them a reason to!

All of this social sharing is what will start building a community around your brand.  You can further this growth by rewarding customers for referring their friends, too.  People often go shopping in groups, and your most loyal customers will be more likely to bring their friends to your store if they’re rewarded for doing so.  Round out your program with a healthy mix of experiential and transactional rewards customers can redeem for, and your loyalty program will officially be the talk of the town.

Loyalty Program in the Apparel Industry summary

So what does it take to build the best loyalty program in the apparel industry?

1. Develop a program strategy which places excellent value and customer service at the core of your program.

2. Reward your customers for sharing your products on social media and referring friends to your business to encourage community.

3. Provide multiple ways to earn rewards, focusing not only on dollars spent but on the complete experience.

4. Offer rewards that are both transactional and experiential as a way of giving your customer experience a complete 360 degrees makeover.

With all of these elements working together, you’re equipped to design a loyalty program in the apparel industry that’s sure to appeal to new customers, bring old ones back, and stay at the top of the trending list for years to come.

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