The Rewards of Loyalty
By George Anderson
The moral of this story is loyalty costs and pays.
Retailers continue to spend huge amounts of money on loyalty programs and, according to Christine Chen, a research analyst at Pacific Growth Equities, a few such as Chico’s are finding the investment well worth it.
The best programs, she told the San Francisco Business Times, “get people into your stores on a regular basis and incentivize them to spend money.” For those that do it right, “the rewards are so great.”
Chico’s, according to Ms. Chen and others, is the gold standard of loyalty programs.
The apparel retailer’s Passport program, launched in 1991, rewards shoppers that have spent $500 in its stores with a five percent discount on all purchases made after that figure has been attained. It also offers free alterations and shipping. An added bonus is that Passport members receive invitations to special events and member-only sales.
According to Chico’s, 70 percent of its shoppers are Passport members. The chain, which caters to women 35 and up, operates 710 stores in 47 states.
“Look at the results of (Chico’s) same-store sales,” said Christine Chen, a research analyst at Pacific Growth Equities. “They keep posting incredible numbers year after year. Passport keeps growing and it gets people coming into stores.”
Forth & Towne, Gap Inc.’s new concept targeting the same 35+ female demographic as Chico’s, is offering its own loyalty program known as Indulge. The new concept’s loyalty program (www.forthandtowne.com/indulge.html) reads like a carbon copy of the Passport program.
Moderator’s Comment: Of the retailers offering card programs, which have the most loyal shoppers? What is behind the loyalty of those shoppers?
George Anderson – Moderator