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Loyalty Programs Evolve During COVID-19

September 10, 2020 Carolyn Harding

Shutterstock_1701052582 Young beautiful woman shopper in protective face mask hold laptop, credit card and shopping bags in hand. Happy girl in medical face mask shopping at online store. Coronavirus COVID-19, sale, discount

COVID-19 continues to shake up nearly every industry with regards to consumers' spending habits, with a recent McKinsey study revealing that more than 75% of consumers “tried new brands, places to shop or methods of shopping so far during the pandemic.” Evolving consumer habits, like those that resulted from the pandemic, have highlighted the urgency for brands to rethink their loyalty program offerings.

Major brands, like Michaels, Madewell, Sephora and Kohl’s, have launched, updated or expanded their loyalty programs in order to drive repeat business, maintain strong customer bases and provide more enticing incentives.

Michaels Seeks Long-Term Engagement Through Enhanced Loyalty Program

Michaels craft store introduced new incentives for customers through its loyalty program, Michaels Rewards. The updates to the program allow customers to earn rewards from purchases and receive bonus offerings, weekly rewards specials and seasonal promotions. According to RetailDive, customers will obtain a $5 “Rewards Voucher” for every $5 they collect in rewards. Leveraging its brand app, Michaels is also promoting the option for customers to manage their personal rewards by accessing the loyalty program straight from their mobile devices. 

Michaels has shown its ability to adjust to the effects of the ongoing pandemic over the past several months, creating convenient offerings for customers. In April, for example, the craft store introduced contactless and same-day delivery options in order to connect with consumers who were adhering to the stay-at-home orders.

“We are constantly looking to enhance the ways we engage with our customers as we expand our digital and omnichannel capabilities,” said Vidya Jwala, Michaels Chief Customer Officer. “Our revamped loyalty program allows us to create long-term engagement with our Michaels Rewards members, while strengthening our relationships with the Maker community. As the program expands, we’ll look to introduce even more ways for our members to earn rewards and provide more value to our community of crafters.”

Madewell Prioritizes Personalized Experiences For Consumers

Shutterstock_1176853714 Woman At Home Sitting On Kitchen Island Whilst Using Mobile Phone

Madewell recently revamped its “Insider” loyalty program, introducing a point system for customers. Madewell shoppers now receive points for each dollar spent, ultimately working toward the goal of receiving a $10 reward after earning 250 points. Additionally, Madewell is offering Insider members a slew of bonus perks from limited edition items to free shipping to the chance to rake in double the points on clothing items tied to charities. According to RetailDive, 62% of today’s Madewell customers are part of the Insider loyalty program, adding, “In response to the program’s success, the retailer wanted to create more experiences and incentives for loyal customers.”

“It [Madewell Insider] is a platform to help us build stronger relationships with our customers and deliver more personalized shopping experiences,” said Derek Yarbrough, Madewell Chief Marketing Officer. “We're excited to announce the launch of points and rewards to deepen the membership experience and further deliver on our promise of premium quality at a great value.”

Sephora Plans For A Post-Pandemic World With Evolved Loyalty Program

While many brands are adapting their strategies to fit into a pandemic-friendly world, Sephora is showcasing an optimistic outlook on the return of in-store shopping with the newest addition of its famous Sephora “Beauty Insider” loyalty program. In an effort to take the shopper’s experience one step further, Sephora’s new and improved loyalty program offers devoted customers a variety of exclusive options and experiences, including Beauty Insider Cash (with which customers can exchange loyalty points for cash off their next purchases), expanded makeup sampling choices, free shipping and early access to exclusive brand events and product launches (as soon as social distancing restrictions have subsided). 

“Our goal is to create a multi-faceted and well-rounded program to cater to the changing needs of our clients. We know they [loyal Sephora customers] want more ways to save and even more access to things like products, brand founders, services and one-of-a-kind experiences that are unique to Sephora,” said Allegra Stanley Krishnan, Vice President and General Manager of Loyalty at Sephora. “We also know rewards that provide greater emotional and memorable experiences are the most meaningful for our clients, and we want to continue to deliver personalized experiences where our clients can choose what works best for their needs. The emotional component of loyalty is a vital driver of our loyalty program and what really matters most to our clients.”

By updating its loyalty program and focusing on experiential rewards rather than traditional loyalty offerings, Sephora is setting itself up for success when pandemic-related restrictions are lifted and consumers (hopefully) return to their previous shopping habits. 

Kohl’s Simplifies Loyalty Program To Drive Engagement

Kohl’s recently introduced its new “Kohl’s Rewards” loyalty program, a simplified version of its previously established “Yes2You Rewards” program, following a successful trial run. Each of the 30 million Yes2You Rewards members – along with their existing rewards points – will be moved over to the updated loyalty program. Kohl’s Rewards members are offered 5% Kohl’s Cash each day, personalized deals, birthday gifts and more. Kohl’s will activate consistent communication with members by sending out friendly reminders to use their allotted “Rewards-issued Kohl’s Cash.” 

khols loyalty rewards program

According to RIS, “The retailer [Kohl’s] will leverage personalization capabilities to create unique customer deals and perks, driving deeper engagement. Furthermore, new elements, such as printing out a customer’s Kohl’s Rewards balance on the shopping receipt, digital reminders of available Kohl’s Cash coupons and syncing Kohl’s Rewards balances across channels, make the Kohl’s Rewards experience easier.”

The launch of the Kohl’s Rewards loyalty program comes on the heels of the brand’s reported 58% spike in digital sales during Q2 of this year. “COVID has accelerated important movements that have been underway for some time,” said Kohl’s CEO Michelle Gass. “Customers are adopting more active and casual lifestyles, and they are shopping more digitally.”

Loyalty programs have the ability to draw in and retain customers, even in tumultuous times. Through enhanced loyalty program offerings, brands can gather useful first-party data and connect with their audiences in meaningful ways, encouraging more and larger purchases during every trip to the store or the ecommerce website.

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About the Author

Carolyn Harding

Carolyn Harding is an Associate Manager of Communications at Digital Media Solutions (DMS), the fastest-growing independent digital performance marketing company. DMS helps its clients accelerate growth by deploying diversified and data-driven customer acquisition solutions that deliver scalable, sustainable and measurable marketing results. DMS performance marketing solutions connect the right consumers with the right offers at the right time to achieve the marketing objectives of our clients. DMS is continually innovating to provide new and emerging media and technology solutions that minimize waste and maximize results across the most competitive industries. Since its inception, DMS has demonstrated incredible year-over-year growth which has earned recognition on the Inc. 5000 list in 2014, 2015, 2016, 2017 and 2018.

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