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Fashion Brands Build Loyalty With Subscription Memberships And Social Responsibility

April 6, 2021 Erin Sweeney

The fashion industry could be poised for a strong comeback after a slowdown during the pandemic. To make the most of a potential rebound, fashion brands are focused on maintaining brand loyalty, reducing cart abandonment and encouraging repeat transactions by shopping via ecommerce platforms and reopened brick and mortar stores. To sustain customer retention rates and increase customer acquisition efforts, fashion brands like Ralph Lauren, Urban Outfitters, Anthropologie and Free People are adding subscription-based membership programs that combine discount perks and free shipping with sustainable clothing rental options.

The Fashion Industry Looks Toward The Future

Shutterstock_1033638667 Back view of charming female entrepreneur sitting at desktop with garment equipments and analyzing information from laptop computer with blank screen for your fashion advertising connected to wifi

With many offices closed, travel heavily restricted and in-person events cancelled, the demand for fashion plummeted during the global pandemic. According to the McKinsey & Co. report, The State of Fashion 2021, the fashion industry experienced a nearly 90% decline in economic profit in 2020. However, as the pace of vaccinations increases, there is hope for recovery in 2021. 

The McKinsey & Co. report provides two scenarios for the fashion industry comeback. In the first “Earlier Recovery” scenario, which assumes an effective containment of the virus, the fashion industry will see a strong rebound this year, equal to or down just slightly from 2019, and a full recovery in the industry by Q3 2022 is predicted. The report also provides a “Later Recovery” scenario in which the industry is down 10-20% in 2021 from 2019 profits, with a full recovery by Q3 2023. In either scenario, the fashion industry should prepare for customers needing new wardrobes after wearing sweats and t-shirts for a year, by leveraging digital activations for consumers who have developed online shopping habits and expectations for seamless digital interactions. 

Subscription membership programs focused on convenience and environmental sustainability are a strategy being tested by fashion brands looking ahead to post-pandemic customer retention and acquisition. “The pandemic will accelerate trends that were in motion prior to the crisis, as shopping shifts to digital and consumers continue to champion fairness and social justice,” states the McKinsey & Co. report.

The Rise Of Fashion Subscription Membership Programs

Stitch Fix was one of the first companies to create a subscription service for fashion in 2011, offering clothing and accessory choices to members from more than 1,000 brands chosen by algorithms derived from style questionnaires and live stylists. Today, Stitchfix has 3.5 million active clients. Amazon pioneered the recurring membership model for online shoppers when it launched Prime in 2005, initially attracting members by offering a wide selection of products with free two-day shipping. By 2019, when the online retailer added Prime Wardrobe, Prime had more than 112 million members. Prime Wardrobe gives Prime members the ability to try on clothing before they purchase it, and for an extra price, offers a “personal shopper” option with similar features to StitchFix. Both of these subscription services take a cut from the products they sell and gain members based on loyalty to the brands they offer. Stitch Fix and Amazon Prime Wardrobe set the stage for other fashion brands to explore the subscription option as fashion makes its way back to prominence in 2021.

Ralph Lauren’s ‘Lauren Look’ Rental Subscription Promotes The Brand’s Social Responsibility Efforts

Ralph Lauren’s ‘Lauren Look’ Rental Subscription

Heritage brand Ralph Lauren announced the launch of their Lauren Look subscription program in March. Members of Lauren Look browse the ecommerce platform and choose items for their “dream wardrobe” wish list. The company then selects and ships four items from the wish list to enjoy for a short term “rental” or to purchase. As soon as the member returns or purchases items in the box, another box is automatically sent from the wishlist, providing constant wardrobe updates. In an analysis for MarketWatch about Lauren Look, financial services company Wells Fargo notes, “The service provides another way to engage with existing consumers while also helping to acquire a new & younger consumer, who are more apt to use an apparel rental service platform.” Wells Fargo predicts the rental apparel market will grow to $2.08 billion in 2025 from $1.26 billion in 2019. 

The price point of $125 per month for Lauren Look is an affordable option for consumers familiar with the brand, and the rental feature of the membership is attractive to consumers who care about sustainability or who may want to try new fashion labels without fully committing. The Lauren Look membership program recirculates an item of clothing until it has “reached the rental threshold” and then donates it to Delivering Good, a nonprofit organization that provides clothing to people in need. Sustainability awareness is increasingly influencing purchasing behaviors. In a 2020 IBM Institute for Business Value survey, 57% of consumers were “willing to change their purchasing habits to help reduce negative environmental impact” and 77% reported that sustainability was “very important” to them. On the Global Citizenship and Sustainability page for the Lauren Look ecommerce platform, the company states, “By joining our rental program, you’re contributing to the reduction of clothing waste by expanding the lifespan of garments you might otherwise purchase and wear only a few times.”

Urban Outfitters, Inc. ‘UP Membership’ Program Capitalizes On Ecommerce Growth 

Urban Outfitters Inc., the parent company of fashion brands Urban Outfitters, Anthropologie, and Free People, did not experience the same level of decline that some fashion companies did during the pandemic, and that may be due to their ambitious digital marketing. Marketing Dive reports that the company’s 2020 Q4 sales only fell 7% from 2019. However, its number of digital customers grew by 50%. Building strong connections with brand loyal customers through apps, rewards programs and now a subscription membership program, could position the company to have a strong comeback when life returns to normal and fashion purchasing ticks up again. The company’s UP Membership program, launching in the Dallas and Atlanta markets and available at two price points, $48 and $98, includes member discounts, coupons, free shipping and returns and exclusive offers, both online and in stores.

Currently, Urban Outfitters and Anthropologie each have separate rewards programs, but the UP Membership will allow members access to all of the Urban Outfitters, Inc. brands, driving awareness and customer acquisition from one brand to another. The membership also drives traffic to web platforms and brick-and-mortar stores through alerts for exclusive offers and special events. “UP is designed to drive increased frequency, capture a greater share of wallet, improve retention, provide opportunities for greater cross-brand exposure, selling and attracting new customers,” said Richard Hayne, chairman and CEO of Urban Outfitters to Marketing Dive

The UP Membership has a clothing rental feature to increase sustainability and potentially attract environmentally conscious consumers. On the UO Community Cares page of the Urban Outfitters online platform, the brand states, “Our sustainable design strategy is centered on the idea of preservation through reuse.” The company supports this claim by including in the UP membership a discounted membership to clothing rental company nuuly, another brand in the company portfolio. 

Fashion Brands Are Poised For A Comeback Using Digital Strategies, Subscription Initiatives And Social Responsibility

The subscription membership programs of Ralph Lauren and Urban Outfitters, Inc. offer the benefits that online shoppers have come to expect from subscription programs. By making fashion affordable, creating seamless and personalized shopping experiences and connecting with evolving consumer demand for social responsibility and sustainable fashion, clothing retailers have the potential to capture new audience segments and build brand loyalty. By offering incentives for regular engagement and purchasing, these fashion brands are positioning themselves for a strong comeback in the post-pandemic fashion world. 

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About the Author

Erin Sweeney

Erin Sweeney is a freelance writer and professional educator. Throughout her 12 years of experience in secondary education, she has taught advanced composition, business communications and research methodology. Erin has a keen interest in psychology and the science of motivation. She received her Bachelor of Arts Degree in English Literature from Saint Anselm College and a Master’s in Education from Plymouth State University. Through research and writing, Erin contributes to DMS Insights with informative articles surrounding the digital and performance marketing industries.

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