Five Best Innovative Retail Loyalty Programs to Reinvent Customer Loyalty

Loyalty programs are no longer an accessory! They are indeed an entire ensemble and a key facet in driving customer retention. With 64% of retailers saying that loyalty rewards programs are the best way to connect with consumers, it reinforces the significance of loyalty programs in the retail industry. A loyalty program increases the customers’ lifetime value and boosts revenues. A whopping 75% of customers reported they are more likely to make another purchase after receiving a loyalty reward. Comprehensive, multi-dimensional loyalty programs for retail companies are the key to creating fiercely loyal customers, building 360-degree engagement, and converting customers into brand ambassadors.

In this blog, we will cover the 5 best retail rewards programs:

1. Sephora Loyalty Program

Category: Retail personal care and beauty products

A leader in prestige Omni-retail, Sephora’s purpose is to create a welcoming beauty shopping experience and inspire fearlessness in the community. Sephora has been recognized by Forbes as one of America’s Best Employers three years in a row, in 2018, 2019, and 2020.

In 2007 Sephora launched a client loyalty program, ‘Beauty Insider’ to offer clients exclusive benefits and rewards. The Beauty Insider program is available in Sephora stores nationwide and at sephora.com. Sephora’s loyalty program is a wonderful example of a tiered loyalty program. As members move up the tiers, they get incremental benefits – monetary, non-monetary and aspirational – leading to a genuine sense of belonging.

Loyalty Program Structure

Sephora’s Beauty Insiders earn one point for every $1 spent, and the tier names offer a sense of exclusivity:

• Insider (Free to join)
• VIP (Spend $350)
• Rouge (Spend $1000)

The Insider level is free to join while the other 2 levels are unlocked after the users spend a certain value. The rewards offered by Sephora are a mix of transactional and emotional benefits. Depending upon the tier, members get exclusive gifts, free shipping, end-of-the-year discounts, etc. The Rouge tier is truly aspirational in nature as one can exchange 2500 points for $100 off their purchase along with other exciting perks like access to exclusive events hosted by Sephora, featuring special services, elite swag, new product launches, restocking, and more. Depending on the points accumulated, Beauty Insiders can exchange points for immersive experiences like a one-on-one with a brand founder, a chance to see how their favorite products are made, etc.

2. Gap Rewards Program

Category: Retail apparel

Gap Inc., a collection of purpose-led lifestyle brands, is the largest American specialty apparel company offering clothing, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. The company uses omnichannel capabilities to bridge the digital world and physical stores to further enhance its shopping experience.

Loyalty Program Structure

Gap’s Good Rewards Program membership encompasses of four brands – Gap, Banana Republic, Old Navy, and Athleta. Members earn 1 point for every $1 spent and cardmembers earn 5 points for every $1 spent.

The program – one membership for four brands, makes it easier for cardmembers and rewards members to earn points, and redeem their rewards, and creates opportunities to give back by donating to charitable funds. There are different perks, bonuses, and exclusive brand benefits for members and cardmembers and the rewards get sweeter and truly luxurious in nature for cardmembers as they climb up the tiers. Customers can redeem 100 points for $1 reward across Gap’s family of brands. Exciting and opulent Gap Good Rewards Program offers its customers with fascinating tiers – Core, Enthusiast, and Icon and the membership tier levels are based on annual spending.

• Core, is free to join with zero to $500 spend per year. It offers bonus points for quarterly cross-brand purchases, a birthday surprise, and free three- to five-day shipping on orders of more than $50 etc.
• Enthusiast, all cardmembers start at the Enthusiast level for a $500-$999 annual brand spend. Enthusiast level includes all the Core benefits plus added benefits.
• Icon includes cardmembers with 5000 points or $1000+ annual brand spend. Apart from all benefits in Core and Enthusiast tier, Core customers can double the value of their rewards on double reward days and create their own sale day.

A key feature of the program is the Do-Good component, which gives customers the ability to give back by donating their points to one of five funds that support the brand and company’s core values. Gap’s Good Rewards Program offers incremental benefits to its members which are both monetary and non-monetary in nature, leading to a genuine belonging and exclusivity.

3. Designer Shoe Warehouse Program

Category: Retail store chains

Designer Brands Inc. is one of North America’s largest designers, producers and retailers of footwear and accessories. The company operates a portfolio of retail concepts in nearly 1,000 locations in the US and Canada under the DSW Designer Shoe Warehouse, The Shoe Company, and Shoe Warehouse brands and operates leased locations in the U.S through its affiliated business group.

Loyalty Program Structure

DSW has designed a truly customized, engaging, and comprehensive loyalty program based on customer feedback and is one of the best customer loyalty programs in retail industry. The DSW VIP loyalty program offers a more personalized experience for members, with relevant and compelling rewards. Features include the ability to receive free shipping on all purchases, earn rewards, and donate shoes for points. Members get 1 point for every $1 spent and $5 reward for every $100 spent. DSW VIP introduces three interesting tiers and ties in the rewards, perks, benefits with each tier making the program truly aspirational in nature.

The three tiers are VIP Club (free to join); VIP Gold ($200 annual spend) and VIP Elite ($500 annual spend). All tiers receive an accelerated reward of $5 for every 100 points earned; Club and Gold members earn 1 point for every $1 spent, while Elite members earn 2 points for every $1 spent.

• VIP Elite members receive 3X points on every purchase for an entire day once a year. What’s truly exciting here? Members can choose the day for this 3X points earning!
• Exclusive access on special promotions, events, announcement, and free stuff
• A birthday gift of $10, redeemable online or in-store

DSW unveiled a survey on how closely members’ feelings about shoe shopping align with the new DSW VIP rewards, and this influenced the development of this program. More than a third of women buy new shoes at least once a month and 25% of women have a pair of shoes in their closet that is more than 12 years old. This influenced the perk of donating shoes to earn points and tied in with the overall DSW VIP program.

4. Jelly Belly Loyalty Program

Category: Retail candy and confectionery

Jelly Belly manufactures high-quality confections including the flagship Jelly Belly jellybean brand, candy corn, chocolates, licorice and gummies, Sunkist Fruit Gems, Sport Beans. Today, candy corn is the most popular type of jellybean in the world. People eat enough of the beans in a year to circle the globe more than five times!

Apart from its exceptional candy and die-hard candy lovers across the globe, Jelly Belly presents one of the most sought-after loyalty programs – Jelly Belly Sweet Rewards which offers discounts to its customers. Engaging customers at various touch-points, Jelly Belly rewards customers points for purchases, referrals, account creation, writing reviews, subscribing to email etc.

Loyalty Program Structure

Jelly Belly’s Sweet Program has truly converted its customers into brand ambassadors which is a testimony to the massive number of reviews on their website. Gamifying the experience further, Jelly Belly offers interesting tiers to its customers, that embody a sense of exclusivity.

• Fan – Default tier
• Rookie – 1000 lifetime qualified points
• MVP – 2500 lifetime qualified points
• All-Star– 5000 lifetime qualified points

Free shipping, bonus points on purchases, free gift box on purchases, discounts etc. are some of the perks customers are eligible for as they move up the tiers. As customers earn 10 points for every $1 spent; they can redeem these points seamlessly on candy coupons. The redemption is 500 points for a $5, 950 points for a $10, and 1800 points for a $20 candy coupon. Jelly Belly’s Sweet Rewards program provides holistic customer engagement and provides a powerful hook for repeat purchases, increased retention, and enhanced customer lifetime value.

Jelly Belly’s Transformation: A 77% Surge in Customer Retention!

Discover how a strategic loyalty program boosted Jelly Belly’s repeat purchase revenue by an astounding 1.69X. Dive into the case study to uncover the game-changing tactics.

View Case Study

5. Kohl’s Rewards Program

Category: Retail department stores

Kohl’s is a leading omnichannel retailer with more than 1,100 stores in 49 states. With a commitment to inspiring and empowering families to lead fulfilled lives, Kohl’s offers amazing national and exclusive brands, incredible savings, and an easy shopping experience in stores, online at Kohls.com, and on the Kohl’s mobile app.

Loyalty Program Structure

Customers who enroll in Kohl’s Rewards, a free loyalty program, will earn 5% Kohl’s cash every day no matter when or how they choose to shop, personalized deals and perks throughout the year, and a special birthday gift. Customers’ Kohl’s Rewards balances are converted and issued in $5 increments of Kohl’s Cash coupons on the first day of the following month. Each Kohl’s cash coupon shall expire 30 days after issuance and needs to be redeemed prior to its expiration. The adage that loyalty programs need to be carefully designed to meet brand objectives couldn’t be truer for Kohl’s, for, these cash earnings work like a charm and customers feel closely knitted to the program.

Gamifying the experience further, customers get $10 Kohl’s Cash for every $50 spent during all Kohl’s promotional periods. 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 and more enjoyable for everyone. Kohl’s omnichannel rewards program is a combination of Kohl’s longstanding cash program with rewards. Kohl’s has ensured their customers can redeem their Kohl’s cash easily and in a seamless manner.

Retail Rewards Programs: Conclusion

Customer rewards programs evoke a sense of emotion and form a strong bond between the brand and the customer. As we cover the loyalty programs for the retail industry in this blog, we conclude that the programs that go beyond transactional loyalty form a long-lasting relationship and 360-degree engagement. Engaging with customers at various touch-points of their journey not only keep them engaged in the rewards program but also provides a powerful hook for repeat purchases, improved customer retention and high profit margins. The brands listed above have carefully crafted their customer rewards program to ensure that it blends with their overall brand objective and resonates with their customers’ journey. These factors have truly contributed to a compelling and award-winning loyalty rewards programs.