THE CLARUS Blog

Retail Recap Q3 2019: Premium Loyalty Study, Prime Day Takeaways, and 3 Outside the Box Trends to Watch For

In our third edition of Retail Recap for 2019, we saw a flurry of activity that included the launch of the first-ever premium loyalty data study, some takeaways from the fifth annual Prime Day, and key developments with some retail loyalty programs.

Here’s what stood out to us in the third quarter:

 

Industry’s First-Ever Premium Loyalty Study

The Clarus Commerce 2019 Premium Loyalty Study was released on July 10 and served as the first-ever industry report focused on premium loyalty.

We’ve received considerable buzz around it within the loyalty industry.

The study sheds important light on the growth of premium loyalty programs as they gain deeper traction.

Here is a snapshot of the study’s most compelling points:

  • Eighty-eight percent of consumers agree retailers could do more to earn their long-term loyalty.
  • More than 70 percent of consumers would join a premium loyalty program if their favorite retailer offered one.
  • More than half of all premium loyalty participants shop with that program’s retailer at least once a week.
  • Eighty-seven percent of consumers who are satisfied with a retailer’s premium loyalty program will likely choose that brand over a competitor that offers a lower price.

It’s important for retailers to build loyalty through a series of positive brand interactions and moments.

Premium loyalty programs support this strategy by allowing retailers to consistently engage with customers across multiple touch points and provide personalized, exclusive benefits that make customers feel truly special and valued.

This creates deeper brand connections and consumer trust over time.

Click here to download your free copy of the premium loyalty study.

 

Prime Day Takeaways

Amazon’s fifth annual Prime Day is in the books and here are some of our key takeaways:

Prime Day positively impacts most retailers: Large retailers with $1 billion-plus in annual revenue experienced a whopping 72% increase in online sales.

Smaller retailers also saw a 30% increase in Monday online sales.

A Prime membership isn’t just about transactional benefits. The main component of Prime, which has more than 100 million members, is to create emotional connections and sustainable relationships.

Prime Day has certainly evolved since 2015, but it remains a critical acquisition and retention tool for Amazon.

Prime Day is the perfect time for Amazon to encourage people to sign up for the program and build stronger relationships with current members.

Nearly 70% of consumers agree their loyalty is more difficult for a retailer to maintain than ever before, while 88% agree retailers could do more to earn their long-term loyalty.

Yet Prime continues to grow and gain more members.

Consider one of our study’s statistics that says more than 70% of consumers would join a premium loyalty program if their favorite retailers offered them.

 

Regal’s New Feature: A Subscription Loyalty Program

There’s a new feature coming to Regal’s screens all over the country!

Regal’s new paid subscription plan, Regal Unlimited, will be exclusively available on the Regal mobile app where moviegoers can choose from three different plans based on theatre location starting at $18 a month.

Other theater chains have seen the benefits of paid loyalty programs: AMC Theatres and Cinemark.

 

Customers At the Center of Target Circle

When it comes to customer loyalty and retention, we always talk about how important it is for retailers to place customers at the center of everything they do.

In a recent press release to announce the Oct. 6 nationwide launch of the Target Circle loyalty program, Rick Gomez, Executive Vice President and Chief Marketing and Digital Officer for Target, said: “Our guests are at the center of everything we do.”

Target tested the program in several cities during the past 18 months.

“We worked directly with guests to develop Target Circle, and the program includes the benefits and perks they told us were most important to them, from earning on every trip to having the opportunity to help Target make a positive impact in their local communities,” Gomez added.

A key aspect of the Target Circle program is it lets members get involved on the philanthropic side of their respective local communities.

Our CEO, Tom Caporaso, talked about the Target Circle program in this article from Retail Customer Experience.

“It offers the points, discounts and cash back that entice consumers to initially enroll in the program, but the experiential benefits like the ability to pick a nonprofit for Target to donate to are what will drive that emotional loyalty long-term,” Tom said.

 

Lululemon Expands Premium Loyalty Test Program

For Canadian athletic apparel retailer Lululemon Athletica, its premium loyalty test program is performing quite well.

It hits on both retention and new customer acquisition, and ties everything back to a memorable in-store experience.

After testing the program in Edmonton, Denver, and Austin, company officials expanded the program to Chicago.

During Lululemon’s second-quarter earnings call last month, CEO Calvin McDonald addressed the success of the company’s premium loyalty program.

“We are seeing men connect with us via the program with over 20% of our members being male in Austin,” he said. “While we continue to test and learn, we won’t get into the specific economics of the program yet, but we recently launched in our fourth test market of Chicago. With the opening of Lincoln Park, we’re excited to see the potential synergies that our membership program and experiential store can create together.”

For $128 annually, members receive a pair of pants or shorts.

Lululemon mixes a slew of attractive experiential benefits in the program to complete the loyalty loop.

Brands seek differentiation through experiences that build emotional connections and brand loyalty.

 

3 Outside the Box Loyalty Trends to Watch For

According to Tom, these are three ways that brands are rethinking loyalty to appeal to the modern consumer:

 

1. Strategic Loyalty Program Partnerships

We’re starting to see brands take advantage of these partnerships in the loyalty space.

Earlier this year Hilton Honors and Lyft announced a partnership that is the first of its kind in the travel and hospitality industry.

Hilton Honors partnered with rideshare leader Lyft to reward the 89 million Hilton Honors loyalty members in their everyday lives.

Now, when members link their Hilton Honors and Lyft accounts, they’ll earn Hilton Honors Points for every $1 spent on Lyft rides in the US and Canada.

 

2. Loyalty Programs That Give Back

Corporate social responsibility has been tied into loyalty programs before, but as brands try to appeal more to people on an emotional level, I think we’ll see this trend grow.

For example, DSW VIP members can donate shoes and rewards to those in need through Soles4Souls and Be Strong.

Since May 2018, more than 1.4 million shoes have been donated.

Among the transaction benefits, Target Circle members will also have an opportunity to cast votes to help direct Target’s giving to approximately 800 nonprofit organizations in their local communities.

 

3. Premium Loyalty Programs with Elevated Benefits

Eighty percent of millennials (and 68% of non-millennials) would be willing to join a premium loyalty program if their favorite retailers offered them and the benefits were valuable to them.

While traditional, free loyalty programs still have a place among the casual consumers, we’re starting to see more brands launch premium programs.

In the simplest terms, a premium loyalty program is a loyalty program that’s so valuable, your customers are willing to pay for it.

And 87% of consumers who are satisfied with the special benefits offered by a retailer’s paid loyalty program will likely choose that retailer over a competitor that is offering a lower price.

 

Premium Loyalty to the Fore

From the feedback we received on the Clarus Commerce 2019 Premium Loyalty Study, to the impressive offerings in the Target Circle and Lululemon’s programs, to the momentum premium loyalty has gained in the market, it was an exciting third quarter!

When nearly 90% of consumers say retailers could do more to earn their loyalty, it sheds light on a massive opportunity in the marketplace.

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