For sales-focused industries, loyalty programs have been a hot topic of discussion for a while.
From catering and restaurants to grocery and coffee shops, you’d be hard-pressed to find an industry not interested in nurturing loyalty with a top-shelf rewards program… including retail.
The retail industry has used loyalty programs for hundreds of years, albeit with a slightly different approach than restaurants and coffee shops.
Restaurant loyalty programs often have a more narrow focus, emphasizing repeat transactions and frequent purchases. This approach prioritizes only the most frequent fliers, offering them points or discounts for their repeat business.
On the other hand, retail loyalty programs often have a broader, “all-inclusive” approach. Their incentives tend to be wider-reaching, with rewards less focused on transaction frequency and more about nurturing an exclusive, members-only experience.
And, while there’s nothing “wrong” with how restaurants traditionally approach loyalty… there’s something to be said that the world’s most successful loyalty programs all belong to retail brands like Amazon, Bath & Body Works, and H&M.
In this blog, we’ll look at three inspirational retail loyalty programs, identifying the parts of each program that restaurant owners and operators should pay close attention to.
So… let’s get started, shall we?
Retail Loyalty Case Study 1 — lululemon
lululemon Essential Membership Details
- Free to join
- Partner perks
- Early access to new products
- Exchange/credit on sale items
- Access to select Peloton classes
- Membership-only events
- Receipt-free returns
- Free hemming services
The Rationale
The first iteration of lululemon’s loyalty program launched in 2018, offering its Members “curated experiences, free shipping” and other exclusive benefits for ~90 USD/month. Now, while this fee might seem steep to the average loyalty-seeker… the brand’s research showed otherwise.
In lululemon’s Q4 2018 earnings call, Chief Executive Officer Calvin McDonald said customer response has “exceeded [their] expectations” in both the US and Canada, suggesting customers would pay even more than the original fee of ~$90/month.
“[We] initially tested in Edmonton, and we’ve just recently tested in Denver,” said McDonald. “We launched at CAD 128 in Edmonton [then] tested USD 148 in Denver and saw wonderful take-up. So, it sort of confirmed our thinking, which is there's real value in the memberships.”
So, if there was proof that customers would pay ~$150/month for a lululemon Membership… you might wonder why the brand completely changed its Membership in 2024, transitioning to a new, completely free membership offering instead.
The answer is surprisingly simple:
The post-pandemic world called for new ways to foster community and inclusion and lululemon’ answered with its new Essential Membership.
“[As] we're moving into post-COVID world, we're once again connecting with our guests in person while also continuing to leverage new ways to engage digitally,” said McDonald in a Q2 2022 earnings call. “Our new two-tier membership program, which we'll be launching shortly, is a perfect example of our ability to connect with guests in new ways.”
In August 2024, the activewear brand expanded its Essential Membership even further with Partner perks, granting Members access to exclusive deals and discounts at 12 different health and wellness brands, from ClassPass and Sweetgreen to Supergoop! and Erewhon.
And, in lululemon’s Q2 2024 earnings call, McDonald said “early [Perks] feedback from guests has been very positive,” reflecting the brand’s ongoing commitment to building community and fostering loyalty.
“[Strategies like Partner perks] illustrate just a few of the ways we engage with our guests beyond a simple purchase transaction by offering exclusive experiences and benefits and helping them feel their best, all of which drives and deepens loyalty.”
Make It Happen with Craver
Take a page from lululemon’s loyalty book by creating a membership community for your restaurant’s most loyal diners.
With Craver’s Memberships & Subscriptions feature, you can create custom membership options and tiers for your restaurant, offering your most loyal customers a well-deserved spot in your new, highly exclusive Membership community. Then, reward your Members’ with offers and deals they can’t get anywhere else — like invitations to private events or reciprocal discounts with other businesses — to maintain (and grow) their loyalty to you and your brand.
Create the Membership & Subscription program your customers want (and deserve).
Retail Loyalty Case Study 2 — Sephora
Sephora Beauty Insider Details
All tiers earn 1 point per $1 spent
Tier 1 - Insider: Free to join
- Free standard shipping
- Beauty Insider Cash (redeemable for discounts)
- 10% off seasonal savings
- 2x points on multiplier events
- End-of-year discount
- Free birthday gift from 5 options
- Access to auto-replenish subscription, the Rewards Bazaar, same-day unlimited delivery, app exclusives and events
Tier 2 - VIB: Must spend $350 a year
Same as Tier 1 with a few exceptions and additions:
- 15% off seasonal savings
- 3x points on multiplier events
- Free birthday gifts from 6 options
- Exclusive gifts
Tier 3 - Rouge: Must spend $1,000 a year
Same as Tier 1 with a few exceptions and additions:
- 20% off seasonal savings
- 4x points on multiplier events
- Rogue Reward (up to $100 off)
- Exclusive gifts
- First access to products
The Rationale
Sephora’s Beauty Insider program first launched in 2007 as a single-tier program offering benefits at the Insider level. Not long after the program’s initial launch, Sephora added two more tiers to its program — VIB in 2009 and Rouge in 2013.
This marked the first version of the three-tiered Beauty Insider program that Sephora customers know and love… but it definitely wouldn’t be the last version.
Over the last decade, Sephora has continuously evolved the Beauty Insider program, regularly changing, upgrading, and expanding to better serve the program’s 31 million members (while appealing to prospective members, too).
And, according to Emeline Berlind, Sr. Vice President and General Manager of Loyalty at Sephora, that commitment to continuous improvement is “how you [keep] a vibrant program going.”
“[We] always try to keep in mind [the] two key tenets of giving value and convenience, which is what we are always going back to as we think about new opportunities for the program,” said Berlind. “Having the program really correspond to why people are shopping at your store in the first place, and rewarding the [regulars]…that’s really the foundation of Beauty Insider.“
In addition to regularly reinventing the program’s value and convenience positioning, Sephora’s data-driven personalization is another massive driver in the Beauty Insider program’s success.
Take the Beauty Insider program’s birthday gift, for example.
Sephora’s birthday gift is their most successful loyalty reward, not just because people love gifts, but because people love feeling seen, heard, and like they’re special.
When a Member (of any tier) celebrates their birthday, they get to hand-pick a birthday gift from a selection of high-end products. Sephora’s team hand-selects the birthday products too, showing a dedication to delivering top-notch gifts to its top-tier shoppers.
“[Every] time we do consumer research, [the birthday gift is] always the No. 1 benefit. People just love the birthday gift,” explained Berlind. “We work really hard with the brands that participate to make it a compelling gift each year. And we’ve continued to offer more choice to our clients as well over the years.”
Make It Happen with Craver
Offer your restaurant’s customers the Beauty Insider experience with personalized offers and incentives that show you’re paying attention and that you care.
With a custom-branded Craver app, you gain access to customer data like order history, customization preferences, and special requests, showing you exactly what they like (and exactly what they don’t). With that customer data guiding your personalization efforts, you can create targeted push notifications, exclusive rewards, and other offers that make your customers feel seen, heard, and special.
Take a data-driven approach to loyalty with Craver’s custom-branded mobile apps.
Retail Loyalty Case Study 3 — adidas
adiClub Details
- Members earn points as they shop
- As their point balance increases so does their Membership level
Level 1: 0-999 points
- Welcome bonus
- Free shopping
- Members-only products
- Access to CONFIRMED app
- Early access to sales
Level 2: 1,000 - 3,999 points
All Level 1 benefits plus:
- Members-only sales
- 3 months free premium access to adidas Running app
- Level 2 bonus
Level 3: 4,000 - 11,999 points
All Level 2 benefits plus:
- Early access to products
- Priority customer service
- Level 3 bonus
Level 4: 12,000+ points
All Level 3 benefits plus:
- Tickets to exclusive events
- Priority CONFIRMED access
- 12 months free premium access to adidas Running app
- Level 4 bonus
The Rationale
Launched just over two years ago in June 2022, adiClub by adidas is one of the youngest loyalty programs featured in this blog… but it’s also the most successful.
In Q1 2024, adiClub had not only surpassed over 300 million members, but the company’s earnings call credited direct-to-consumer business (like membership sales) as “driving top-line growth for the company” that quarter.
So, adiClub had undoubtedly hit the ground running (bad shoe pun intended)... but why? What makes adidas’ loyalty program stand out from other point-based ones just like it?
Put simply, other brands don’t have the engagement strategy adidas does.
Unlike other points-based loyalty programs, adiClub points aren’t exclusively tied to spending amounts or dollar values (although members do earn 10 points for every $1 they spend).
Instead, adiClub encourages its members to engage with the brand, earning points by completing unique challenges, attending events, and even sharing photos. Some of the more unconventional ways adiClub engages its members to earn points include:
- Getting active — Members earn 10 points for every training session they complete
- Sharing selfies — Members earn 50 points for sharing their adidas ‘fits in the app
- Participating in events — Members earn 100 points for joining an adidas running event
But, the real icing on the adiClub cake is how focused their Membership is on fostering “hyperlocal experiences” — despite being a global company.
“Essentially, [we] output unique content [through adiClub] that caters [to] the market itself,” said Claudio Corti, Global Membership Strategy Senior Manager at adidas. “[The] partner portfolio [we have enables our] market representatives to activate local content with local partners that are relevant for the members within that market.”
So, whether adidas partners with the US’s National Football League, India’s National Cricket Team, or the UK’s Premier League, one thing about the brand’s “local” efforts is certain:
Every Member will feel like they belong, no matter what “local” means to them.
Make It Happen with Craver
Entice your customers to engage with your restaurant more meaningfully (and enthusiastically) through unique, never-before-seen reward incentives like adiClub.
With Craver’s customizable loyalty program feature, you can create a points-based loyalty structure tailored to your restaurant’s priorities and your customer's preferences, rewarding them for engaging with your brand in fun new ways. And, what’s more, you can tailor the amount of points needed to redeem rewards, making your loyalty program as accessible — or as exclusive! — as you and your customers like.
Create a loyalty program that speaks to any and every customer.
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