Urban Outfitters is a very well known brand all around the world. With sales dropping 7% for such a big brand, the company tried finding ways to spark sales growth. Since the beginning of the pandemic, sales had decreased since the stores were temporarily closed. However, the digital customers increased by 50% during the pandemic and in order to keep the growth consistent, Urban Outfitters began their loyalty program or most commonly known as membership. The loyalty program is said to run for around 12 months in order to test it. This program provides free shipping and returns as well. Additionally, this test also extends to other store brands including Free People, Anthropologie, and a few others. The CEO of Urban Outfitters, Richard Hayne has mentioned that the loyalty program is currently functioning on the duration of how many customers sign up for the same.
More Engagement
There are various benefits of starting a premium loyalty program and the team of Urban Outfitters has come up with the same in order to improve retention and also attract new customers. One of the reasons for their introduction of the loyalty program is for more engagement. It is more likely for premium loyalty members to spend on the brand, as compared to the free loyalty members. The paid membership program encourages the customers to purchase more. Hence the engagement is such that, the purchase is more in number and frequency of the sales are also high. The basket size being bigger will affect the brand affinity as well.
Right Benefits
As mentioned above, Urban Outfitters provide various benefits to the customers which motivate them to join the program. Some of the benefits include free returns and shipping, a $10 coupon every month, a 15% discount on purchases and access to the promotions and events of the brand. Most of the brands provide similar benefits to their premium customers, however, monthly coupons and their access to events and promotions among its store brands are also considered a nice touch to the loyalty program. Since the brand is more catered towards popular culture as well, involvement of the brand’s exclusive events and promotions is a golden opportunity for the customers.
Existence of Premium and Traditional Programs
Urban Outfitters provide UO Rewards to its customers, however, a loyalty program is a completely separate program. Since the brand has both these programs available for their customers, the team will find it easier to get more insights and also make adjustments for their members. The two-tiered approach towards loyalty programs, also allows the customers to choose between the two programs and explore the same with respect to their liking and purchase patterns. Having customers that are already part of the free program is a plus point for the brand. Earning UO rewards will allow the customers to get first-hand experience of the loyalty program. Moreover, once the customers have tried out the free program benefit, it is easier to introduce them to the premium loyalty program. Engaging them into one of the programs by the brand is enough to gain loyalty and offering additional elevated benefits will easily lure them into the premium program.
Other additional details
The brand also has two tiers in its premium loyalty program. One of them is $48 per year and the other one is $98 per year. The former includes a 15% discount on purchases along with free shipping and returns as well. Whereas the latter includes a monthly $10 coupon along with the other benefits. Along with these features, the CEO also mentions that this loyalty program focuses on building a stronger community within the brand itself. The program encourages its members to interact with other members, share pictures of the products they like and many more. This again has its own benefits, since the customers also get the opportunity of earning more rewards based on how much they have interacted. The only challenge for Urban Outfitters is that the customers can have a difficult time understanding the difference between the loyalty program and the UO rewards program. However, the main goal of the brand is to test the behavior changes of the customers and also measure the amount of time it takes for them to respond to the benefits provided by the brand. Most brands that sell apparel don’t offer such test programs, however, since the pandemic, e-commerce has been a priority for most of them and hence they have decided to run it for over 12 months and gather insights accordingly. Urban Outfitters offer a 15% discount on all purchases including free shipping and returns in its first tier, which is $48 per year. Moreover, a monthly $10 coupon along with a discount on the subscription of Nuuly comes under the $98 per year tier. UO rewards are very limited and offer coupons to its members, however, the paid membership to UP offers additional benefits, like free shipping and returns, coupons, access to events, promotions of the brand and much more.
