6 Examples of Mobile Loyalty Programs in Retail

It costs up to five times more to acquire new customers than it does to retain existing customers. This makes customer loyalty crucial for business growth as boosting customer retention has a positive impact on profit.

If you’re asking yourself whether customer loyalty is worth fighting for, let me tell you, it definitely is.

The importance of customer loyalty in retail

Loyal customers should be cherished by all businesses, including retail where new options await customers just around the corner. How can retailers promote loyalty? By introducing loyalty programs – with a strong emphasis on mobile loyalty programs. Seventy-five percent of consumers say they would more actively participate in loyalty programs if they were accessible via mobile phone.

Why use loyalty programs in retail?

Introducing loyalty programs in retail can bring significant benefits, such as:

• Increased spending – offering rewards for every purchase acts as a motivator to buy more. In fact, loyalty members spend on average 5-20% more than non-members. Additionally, thanks to having access to a larger pool of data, companies can cross-sell and upsell their products, for example, suggesting accessories which complement a customer’s recently purchased outfit.
• Higher referral rates – loyal customers are more likely to share their experiences with friends and word of mouth recommendations are exceptionally effective. This is confirmed by the numbers – according to Bain & Company, apparel shoppers referred 50% more people after the 10th purchase than first-time shoppers.
• Higher purchasing frequency – loyal customers tend to return to a store more frequently and have more consistent purchasing patterns. According to Bond’s 2019 Loyalty Report which surveyed over 55,000 customers, 79% admitted that having a loyalty program makes them more likely to purchase again.

This is no surprise – satisfied customers are less prone to switching, plus special deals offered to loyal customers are too tempting to miss.

Six examples of the best mobile loyalty programs in retail

Sixty-three percent of shoppers treat mobile devices as part of their shopping experience. They use it for product research, price comparison, and to check product availability in-store. Here are six retail loyalty programs that you can use for inspiration:

1. NikePlus

Nike puts a lot of effort into making their loyal customers feel like superstars. Some of the benefits they offer include:

• Free expedited shipping
• Free merchandise in their stores in exchange for points
• Access to products available exclusively to NikePlus members

Members are also rewarded for working out – the more active you are, the more points you get. Nike partnered up with Apple, Headspace, and ClassPass to offer its members access to the best music, guided meditation, and new workout routines.

Nike offers a fully personalized experience, from product discounts for a customer’s birthday, to receiving free gifts after completing a purchase. For example, if you buy a sports bra via the Nike app, you’ll get a free one-month subscription to ClassPass. The more frequently you use the Nike app, the more tailored to your needs their reward program becomes.

2. H&M Customer Rewards Program

The H&M Loyalty Program is fully digital and mobile-focused. It enables their app users to collect points which they can exchange for rewards. For every dollar spent, customers receive 1 point – if they collect 200 points they are entitled to an additional $5 off their next purchase.

Customers get targeted offers and discounts, can use free online returns, participate in exclusive shopping events, and even have the option of deferred payment. The benefits differ depending on the tier that the customer belongs to. After collecting 500 points, members are promoted to “Plus Members”.

3. Sephora’s Beauty Insider Program

Sephora’s app is regarded as one of the best apps in the industry and works similarly to H&M’s loyalty program. Customers earn points on their purchases, where 1 point equals $1 spent and points can be exchanged for rewards.

Loyalty program members get access to exclusive previews and promotions, free standard shipping, and access to exclusive events. They can also use a virtual makeover tool to test chosen products, as well as get product recommendations that match their beauty type.

Sephora’s loyalty program benefits both their customers and Sephora itself. Thanks to the data it collects, Sephora can further optimize its online and in-store experience, and as a result, improve conversions and customer retention.

4. Amazon Prime

Amazon Prime is slightly different from the retail loyalty programs mentioned above. Prime members pay an annual fee of $79 which gives them access to unlimited free two-day shipping, instant streaming of movies and TV shows, and access to thousands of free Kindle books.

5. Starbucks Rewards Program

The Starbucks app has 16.3 million active members and is the most used mobile app among major U.S. restaurants.

Customers collect loyalty points called stars, which they can exchange for rewards. Paying just two visits to Starbucks lets you get customized drinks, order ahead and pay, get birthday treats, receive personalized offers, and get free coffee and tea refills in-store.

Same-store sales rose by 4% in Q2 2019 in the United States, with Starbucks Rewards members accounting for 41% of the revenue increase.

6. The North Face VIPeak Program

The North Face loyalty program is a real treat for customers. They can collect points in various ways:

• Purchasing items – they earn 8 Peak Points for every $1 spent in-store and online, and 4 Peak Points for $1 spent at the North Face outlet
• Attending a North Face event
• Checking in at certain locations
• And even downloading the North Face app

Customers are given multiple options to redeem their rewards, some of which are very exciting, like a trekking trip in Nepal. What’s unique about the VIPeak Program is its personal approach to customers. Rather than offering generic discounts, The North Face suggests rewards based on customers’ personal preferences. This makes them feel special and keeps them coming back for more.

Conclusion

Looking after customer retention should be an integral part of your sales strategy. Introducing customer loyalty programs is one of the tactics retail companies can use to show customer appreciation and drive retention.

Not only do loyalty programs lead to increased spending, but they also positively impact purchasing frequency and boost referrals as loyal customers are more keen to recommend your brand to their friends.

Considering how easy it is to switch between brands in retail, not having a mobile retail loyalty program is risky. If you don’t have one yet, you should start thinking about designing a mobile retail loyalty program soon.