Loyalty Schemes: Trends in Fashion Retail · in-store. Sarah, a Gen Z who likes to shop online and in-store on the high street, said her favourite online shop is Zara because the

Loyalty Schemes: Trends in Fashion RetailA deep-dive into the current loyalty scheme offering in fashion retail, and an insight into what really encourages repeat purchases.

What’s the point?

What consumers want from loyalty schemes

The generation game

The gender gap

Loyalty is more than just points or discounts

What’s #trending in fashion retail loyalty schemes?

The results: Loyalty schemes in fashion

Data deep-dive

So, what can retailers do?

Research methodology

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Contents

2Loyalty Schemes: Trends in Fashion Retail

What’s the point?

How many times have you been stood at the cash desk and been asked, “do you have a loyalty

card?” And so begins the panicked rummage through your jam-packed wallet for that one

loyalty card that you can just never find. Honestly, how often do you feel confused by points-

based loyalty schemes? With a mass of coupons and a lack of points knowledge, customers

often just don’t bother with loyalty schemes. This is a huge opportunity missed by customers

and retailers alike. A chance for customers to save money and a chance for retailers to gather

valuable customer insights. But, does anybody actually know what their points mean?

Retailers need to offer, real, instant and obvious value to the modern-day customer, who has

limited time and limited patience for complicated loyalty schemes. Take for example, the M&S

Sparks loyalty scheme which has been deemed ‘too complicated’ by its customers, a scheme

that never seems to have hit the mark. Back in 2016 when M&S’ Loyalty Chief Suzanna Broer

was dismissed (1), her successor Nathan Ansell had his work cut out trying to make the scheme

work. However it seems that he was unable to fix the complicated scheme.

“It’s terrible. I have loads of points, almost as many as the number of emails I receive from M&S and haven’t found

anything I want. I even asked in-store what I could get for the points and was told that the shop assistant stopped

using her card due to the complexity of it.”

Mumsnet April 2016 (2)


So, could the prescription for failing loyalty schemes be subscription?

ASOS recently cancelled its A-List loyalty scheme to “work on even better ways to reward loyal

customers”(3). When ASOS closed the scheme it offered a £10 voucher to all A-List members and

recommended that customers use this £10 voucher to purchase 12-months of Premier Delivery,

which ASOS says that its customers love. The number of ASOS Premier customers increased

by 53% to 1.3 million for the year ended August 2018 (4). ASOS Premier offers an entire year of

next-day delivery or nominated day delivery with no minimum order value, which conveniently

enough, is just £9.95 for a one year subscription. Clever right?

Already, we can see that retailers are moving away from the traditional points-based loyalty

schemes, as customers opt for subscriptions with retailers, something Amazon has been offering

since 2005. Customers who commit funds to a delivery subscription with a company are far more

likely to purchase with that company whilst the subscription is active. This has become known as

The Prime Effect.

“We want Prime to be such a good value, you’d be irresponsible not to be a member.”

Jeff Bezos, Chief Executive Officer, Amazon (5)

Delivery management company Whistl found that one in three Millennials (25 - 34), refuse to shop

with retailers that they don’t have a subscription with. 49% of Brits admitted to regularly buying

products they wouldn’t have purchased without a subscription. Gen Z (18 - 24) are the biggest

additional spenders with 60% admitting this, while only 30% of Baby Boomers (65+) would do the

same (6). It seems that the convenience and cost-saving benefits that subscriptions offer are a real

pull for customers to sign-up and remain loyal to a retailer, at least for a specified period of time.

So, if subscription services sound so great, many retailers must be offering them, right? No.

According to our research only 15% of fashion retailers offer a subscription scheme those being;

New Look, Oasis, Amazon, ASOS and Selfridges (7). Amongst those that did, next day delivery

and free returns were core to the subscription offering, however, free returns is also available to

customers who aren’t on the scheme. The Prime Effect has set a new standard for loyalty and

subscription schemes combined. The value for money, speed and delivery is a perfect package for

the modern-day, time-poor consumer.


What consumers want from loyalty schemes

69% of consumers chose clear discounts and

offers over points-based schemes.

67% of participants said that points that

equal money to spend in-store would be their

top incentive to sign-up to a loyalty scheme.

Only 11% of participants chose VIP events, e.g.

launch parties, masterclasses, celebrity signings

and so on, as part of a loyalty scheme.11%

67%

69%

Cybertill wanted to know, so we sponsored a YouGov survey of 2,004 participants aged 18 years and

above and living in the UK. In the survey we asked consumers what would make them sign-up to a loyalty

scheme (8).


The generation game

In the YouGov survey, the results were also broken down by age, asking different generations

what would incentivise them to sign-up to loyalty schemes with retailers. The survey

participants varied in age, from Gen Z to Baby Boomers. The results provided a real insight into

what consumers of all ages expect from loyalty schemes.

To humanise the data, we also conducted 38 interviews and asked participants to tell us what

they think about loyalty schemes, and if they are signed-up or use any frequently.

Alison, a Baby Boomer, likes to shop online and her favourite retailers are Next, Zara and

Debenhams as they “cater for everything I need/like.” Her least favourite is M&S as she feels

that “it caters for the ‘older’ generation.” Her favourite online fashion website is Next because “it

has a lot of choice in petite sizes.” She uses her Nectar loyalty card the most because she often

shops in Sainsbury’s, and an incentive that would make her sign-up to loyalty schemes would be

points that turn into money to spend in-store.

As Gen Z and Millennials shop more frequently and have weightier expectations of brands

than older generations, they have been deemed as being ‘less loyal’ than older consumers.

The fashion market is so saturated that Gen Z and Millennials tend to want to shop by category

rather than brand, bringing rise to websites such as Shopbop or Trouva.

James, a Gen Z, likes to shop in-store at retail parks. His favourite shop is Topman because it is

“stylish, affordable and changes styles a lot”. His favourite online fashion site is ASOS for similar

reasons, and ASOS is also his favourite mobile application to shop on. He uses the Nando’s

loyalty scheme, “because you have tiered rewards and I like Nando’s!” And it is getting discounts

that would encourage him to sign-up to a loyalty scheme.

What they want What they don’t care about

Gen Z & Millennials

Discounts (e.g. 20% off one item, Buy-One-Get-One-Free offers

etc.)

VIP events (e.g. launch parties, masterclasses, celebrity signings etc.)

Over 55’sPoints that equal money to

spend in-store

Personal recommendations (i.e. recommendations based on your

purchase history)


The gender gapWomen use loyalty schemes more than men do. Only 16% of men said that they used a

loyalty scheme, and these were for grocery and restaurant chains, not for fashion retail. This

is compared to 48% of female participants who said they use a loyalty scheme, all of which

were for fashion or beauty retailers (9). In the YouGov survey results, it emerged that men value

discounts more than women who would much rather have points that equal money to spend

in-store.

Sarah, a Gen Z who likes to shop online and in-store on the high street, said her favourite online

shop is Zara because the products are her style, and her least favourite is ASOS due to its “poor

customer service”. Her most used mobile shopping app is Zara “the app is easy to use and it has

a barcode scanner for when in-store”. She did use ASOS’ points-based loyalty scheme and liked

it for the discounts. She would like loyalty schemes to be digital and card-less in an app, and her

top incentive would be points that equal money to spend in-store.

What’s interesting is that only 7% of men said that VIP events (e.g. launch parties, masterclasses,

celebrity signings, etc.) would encourage them to sign-up to loyalty schemes, compared to 14%

of women. It seems that women value experiential retail perks more than men do.

What would incentivise you to sign-up for a loyalty scheme?

Male Female

Points that equal money to spend in-store 61% 74%

Discounts 66% 71%

Cashback 57% 66%

VIP pre-launch access to stock or sales 11% 16%

VIP events 7% 14%

Personalised promotions 25% 32%

View and redeem offers/discounts on a mobile 21% 23%

Remembers previous orders so I can easily order again

24% 21%

Personal recommendations 11% 11%


Peter, a Gen X, likes to shop online and in-store at retail parks. Sports Direct is his favourite high

street shop for its “price, availability, and range of products” and New look is his least favourite as

he feels there are no products for him. Amazon is his favourite online retailer which he uses via the

mobile app. He likes Amazon so much because of its “100% availability.” He isn’t signed-up to any

loyalty schemes, but if he would sign-up his main incentive would be for points that equal money

to spend in-store.

The only instance where male shoppers were more enthused by a loyalty incentive than women,

was when it came to remembering previous orders so that they can easily order again, with 24%

wanting this incentive compared to only 21% of women (8).

Female participants would rather have points to spend in-store than discounts. Women are more

willing to return to a store for repeat purchase to build-up their points with a retailer over time,

whereas men prefer convenience and simplicity.


Loyalty is more than just points or discounts

36% of retailers that we researched do not offer any perks in return for repeat custom. No loyalty scheme, no store cards and certainly no VIP subscription scheme.

Online fashion giant Missguided does not

offer any schemes, subscriptions or credit

cards to customers. But as with many fast-

fashion online retailers, Missguided is trend

focused, turning out copy-cat items from

whatever the Kardashians wore the night

before. Its customers are hooked, scheme or

no scheme.

Missguided prides itself on being a cheaper

and more affordable option for Gen Z and

Millennial girls, a loyalty scheme subscription

or otherwise may bring no further benefit

when the clothing is already priced to sell

out.


What’s #trending in fashion retail loyalty schemes?

Cybertill conducted research on 33 UK fashion brands and retailers and assessed them on the following criteria:

• Does it offer a loyalty scheme?

• Does it offer a store card?

• Does it offer a VIP subscription scheme?


The results: Loyalty schemes in fashion

Only 15% of retailers offer a VIP subscription

scheme.

Only 27% of retailers offer a loyalty scheme.

54% of retailers offer a store

credit card. More retailers offer

store cards than loyalty schemes.

15%

27%

54%


Data deep-diveNone of the retailers that offered loyalty schemes offered VIP subscriptions as well. Retailers that did

offer loyalty schemes offered multiple different benefits in return for customer loyalty. Benefits ranged

from birthday treats, to discounts, to competitions.

Reta

iler

Loya

lty

Sche

me

Stor

e Ca

rd

VIP

Subs

crip

tion

New Look X

Oasis X

Clarks X X X

Dorothy

PerkinsX X

H&M X X

Superdry X X X

Dune X X X

Topshop X X

Miss Selfridge X X X

Burton X X

Accessorize X X

Missguided X X X

UGG X X X

White Stuff X X X

Fat Face X X X

Wallis X X

Reta

iler

Loya

lty

Sche

me

Stor

e Ca

rd

VIP

Subs

crip

tion

Hollister X X

Argos X X

M&S X

Debenhams X

Amazon X

John Lewis X

Next X X

Schuh X X X

Simply Be X

ASOS X X

Size? X X X

Matalan X X

Selfridges X X

Yours Clothing X X X

Jacamo X X

Mothercare X

Moss Bros X X X


So, what can retailers do?

Retailers should know their customers, and what makes their customers shop with them. Is

it their products that keep customers coming back? Or is it more? Is it the company’s moral

alignment that drives loyalty, is there an experience to be had, or maybe it’s just simple value for

money?

Customers are growing increasingly time-poor with an astonishing amount of choice, they just

don’t have time to research and keep on top of complicated loyalty schemes. Inspiring loyalty is

about offering real, and obvious value. And if it’s not instant, it better be worth the wait.

We are entering a new age of loyalty, but loyalty and points-based schemes are not dead.

Customers still want to use them, so why should retailers deprive them of that opportunity to

be a loyal customer? Points are a great way to enourage repeat custom, especially for female

consumers, but the scheme needs to be simple. Retailers need to understand that if something

is too difficult for a customer to grasp or maintain, then they will not use it.

Keep it simple, keep it clear, keep them coming back.

More retail consumer data from Cybertill...


Research methodology

Retailer selection

Using a mixture of sources, including the Internet Retailing UK Top 500 index, we hand picked

33 UK fashion retailers and brands. The retailers chosen varied in selling format, price point and

demographic.

Research and criteria

The online YouGov Survey was completed by 2,004 GB adults aged between 18-55+. A total

of 973 males and 1,031 females took part. The analysis has been broken down into the

demographics of 183 Generation Z (18 - 24), 304 Millennials (25 - 34), 728 Gen X (35 - 54) and 789

Baby Boomers (55+).

Cybertill research was executed between 5-30 Nov 2018 using a Google Chrome web browser

on a Dell laptop running Window 10. Criteria for the research included the following: Does the

retailer offer a loyalty scheme (discounts, points, etc.)? What are the loyalty scheme perks? Is it

tiered? Does the retailer offer a store card? What is the store card APR? What are the store card

perks? Does the retailer offer a subscription VIP scheme? What is the subscription cost? What is

the subscription renewal period? And what were the subscription scheme perks?

To gather persona information, Cybertill then conducted interviews with 38 participants

including; Gen Z, Millennials, Gen X and Baby Boomers. We asked participants how do they

prefer to shop for clothing and footwear? What is their favourite and least favourite high street

fashion retailer, and why? We asked them to rank retailers in order of their favourite and least

favourite. Their favourite mobile app, and why? Which loyalty scheme do they use most often,

and why? And what makes them sign-up to a loyalty scheme?

Terms and conditions

The data contained in this report is based on the researcher’s judgement at the time of testing in

relation to documented guidelines. The artwork contained within this report are copyright and

trademark of respective owners. Cybertill does not claim ownership of the artwork.

Data contained within this report may only be published if crediting ‘Cybertill Loyalty Schemes:


Trends in Fashion Retail 2018’ and link back to: cybertill.com/loyalty-schemes-trends-in-fashion-

retail/

For press enquiries, or to request the raw data, please contact [email protected]

References (1) Retail Gazette, 2016. Head of M&S loyalty scheme dismissed for ‘racist language’. [Online]

Available at: https://www.retailgazette.co.uk/blog/2016/01/head-of-m-and-s-loyalty-scheme-

dismissed-for-racist-language/

(2) Mumsnet, 2016. Suggesting that Marks and Spencer Sparks card is the worst loyalty

scheme ever. [Online] Available at: https://www.mumsnet.com/Talk/am_i_being_

unreasonable/2612001-in-suggesting-that-the-Marks-and-Spencer-Sparks-card-is-the-worst-

loyalty-scheme-ever

(3) ASOS, 2018. ASOS A-LIST ended on 24 October. [Online] Available at: https://www.asos.com/

customer-service/customer-relations/a-list/

(4) Internet Retailing, 2018. Boohoo: Growth & Agility. Carol Kane, Joint Chief Executive,

boohoo group, on growth, agility and scaling up the business. [Online] Available at: https://

internetretailing.net/magazine/magazine/internetretailing-magazine-november-2018

(5) Business Insider, 2016. Bezos to shareholders: It’s ‘irresponsible’ not to be part of Amazon

Prime. [Online] Available at: https://www.businessinsider.com/amazon-ceo-jeff-bezos-says-its-

irresponsible-not-to-be-part-of-prime-2016-5?r=US&IR=T

(6) Whistl, 2018. Subscription Services. [Online]. Available at: https://www.whistl.co.uk/news/

subscription-services-a-whistl-survey/

(7) Cybertill, 2018. Assessment of 34 UK Fashion retailers and brands. [Raw data can be shared

upon request [email protected]]

(8) YouGov, 2018. Online and in-store shopping. [Raw data can be shared upon request

[email protected]]

(9) Cybertill, 2018. Interview with 38 participants sharing their opinions on retailers and loyalty

[Raw data can be shared upon request [email protected]]


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customers coming back

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Documents

Loyalty Schemes: Trends in Fashion Retail · in-store. Sarah, a Gen Z who likes to shop online and in-store on the high street, said her favourite online shop is Zara because the