From celebrity merchandise to second-hand streetwear, to new and emerging clothing brands, the apparel and fashion industry is a trillion-dollar business. $1.5 trillion to be exact. It’s estimated that the global apparel industry “is expected to exceed $1.7 trillion in 2023, a 13.7% year-over-year increase.”
If you’re building an ecommerce apparel brand, these stats indicate the growth the apparel industry is expected to continue trending towards. For established retailers in the apparel industry, there is a constant battle to secure new customers and keep existing customers hooked and loyal.
When combined with the seasonality of products and the potential for high customer lifetime value, this competition makes a loyalty program in the apparel industry imperative for staying three steps ahead of competitors. The best part? You can provide your customers with an exceptional experience and great fashion while doing so.
Why a loyalty program is essential to the apparel industry
For your apparel rewards program to succeed, your customer lifetime value (CLV), purchase frequency (PF), and average order value (AOV) need to be relatively high. Otherwise, your business may not be able to sustain your loyalty strategy and the time you invest in developing it is spent unwisely.
It’s estimated that the average consumer spends about $2,000 a year on clothing, about $161 a month. With new brands emerging for everything from workout and fitness apparel to office and professional clothes, to comfy WFH (work-from-home) apparel, there is always an opportunity to acquire customers and retain them through a loyalty program.
With changing styles and fashion trends, each purchase has the potential to be extremely high. These factors increase each customer’s lifetime value, making a loyalty program in the apparel industry an excellent touchpoint to leverage a customer's experience with your brand.
Acquiring customers in the apparel industry can lead to always having a sale or lower prices for some products. We call this the spiral of discounting that can negatively affect your business in the long term.
After your first discount sale, your store’s revenue is going to experience a quick burst of growth. Unfortunately, that initial discounting has lasting negative consequences. Now that customers have been introduced to your products at a much lower price point, they are being conditioned to expect discounts with every purchase. Rather than seeing your brand as more valuable, it seems less valuable, since shoppers start to only buy products at the discounted rate.
What happens next is sales drop, so you run another sale and eventually, margins sink. A loyalty program is essential to provide incentives and a reason for customers to return and shop with you that will be financially sustainable.
Build an effective strategy
The strategy behind an effective apparel loyalty program is to focus on expanding your reach with visual channels, creating value through social sharing and brand community.
Unlike many other industries, apparel is highly visual. Customers are drawn to brands that look good and are in the public eye, making social media sharing and promotion the key to your acquisition and retention strategy. Eliminate the switching barrier of price by creating value through social sharing.
Rewarding customers for these types of actions helps build a community that people will want to be a part of, attracting new customers and retaining existing ones.
Rewarding customers for sharing on social media, engaging with your brand, and even creating user-generated content (UGC) in the form of photo or video reviews are opportunities to build a brand community and attract loyal customers.
You can even take your customers’ desire to share their lives with others one step further and offer rewards for writing reviews online. Apparel brand Threads 4 Thought incorporates social interactions like follows on TikTok and Instagram into its loyalty program strategy, as well as offering points in exchange for a photo review.
Customers are more likely to trust other customers, and instilling this type of conversation within your program helps build a community that is both inclusive and exclusive. When potential shoppers see how much people are enjoying your products, they’ll want to join in!
Focus on branding and design
Focus on developing a clear visual strategy for your brand. With a well-designed brand and focused social strategies, you can encourage customers to engage with your brand on different channels.
Above all, a great loyalty program in the apparel industry should have a well-developed visual strategy. Emphasizing your product’s packaging and the branding of your loyalty program will raise shoppers’ awareness of your program. The more aware they are, the more likely they are to engage, and this engagement will start to spread as they begin to share and review your products.
Apparel swim brand Blackbough does an incredible job at branding its rewards program “Beach Club.” Its rewards program offers generous rewards and gets customers excited about participating.
Diversify ways customers can earn rewards
Diversifying how your customers can earn rewards will distinguish your brand from your competitors. This will also provide the potential for value for every interaction and transaction.
Getting people excited about participating in your rewards program is only half the battle. Besides being rewarded for making purchases, offering your customers the ability to earn rewards for reviewing and sharing your products is paramount to extending your brand’s reach.
Allow customers to earn on referrals as well. Referrals are a perfect way to incentivize customers to spread the word about your product and business. A referral program has to be rewarding to both the person making a referral and the person receiving a referral.
Apparel brand Seek Discomfort, gives those being referred a $10 off coupon and 15 points for every person making a referral. This can go towards a $25 off coupon or free shipping.
All of this social sharing is what will start building a community around your brand. Round out your program with a healthy mix of experiential and transactional rewards customers can redeem and your loyalty program will be a top-tier program customers love.
TLDR: How to build a loyalty program in the apparel industry
- Develop a program strategy that places excellent value and customer service at the core of your program.
- Reward your customers for sharing your products on social media and referring friends to your business.
- Provide multiple ways to earn rewards, focusing not only on dollars spent but also on the complete experience.
- Offer rewards that are both transactional and experiential as a way of giving your customers a positive experience with your brand.
Today’s small and emerging brands can become the next major player in the market. With all of these elements working together, you’re equipped to design a loyalty program in the apparel industry that’s sure to appeal to new customers, bring old ones back, and stay at the top of the trending list for years to come.
Editor’s Note: This post was originally published on August 4, 2016, and was updated for accuracy and comprehensiveness on September 27, 2023.