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Play your cards right to improve customer loyalty

Andy Wood is managing director of data marketing company GI Insights.

Loyalty schemes have been a huge success for supermarkets and food chains and as technology has developed they have become a rich source of data for the companies that offer them. But our research suggests the fashion industry is failing to make the most of these potentially lucrative schemes.

In August, we asked more than 1,000 members of the public which loyalty schemes they belong to.

Just 12% mentioned fashion, compared with the 79% that belong to a supermarket scheme. And only a quarter of those in a fashion loyalty scheme felt it met their needs - a poor finding for a sector that, given the frequency and nature of purchases, should be able to use transactional information and other data to create offers that hit the mark.

Of course, some fashion retailers have caught on to the potential of loyalty schemes. Dublin department store Arnotts launched its Wonder Card on September 1 [see page 20], allowing shoppers to collect and spend points on any product in store and online. Asos launched its first loyalty scheme earlier this year, offering users five points for every £1 they spend, with each point worth 1p. It was met with much excitement in the fashion world, with fans of the retailer tweeting about how much money they would save and in turn be able to spend on the site.

Jaeger not only sees the benefits of a loyalty programme, but also the importance of using the data collected. Jaeger’s loyalty card allows customers to start earning vouchers as soon as they spend £150, and then for every £150 they spend on top of that they receive an extra £10 in rewards. Offering vouchers is a clever way of tracking a customer’s spending habits.

However, not enough fashion retailers are taking advantage of what these schemes have to offer. Supermarkets have shown how loyalty schemes can be used to gain customer loyalty and increase sales by using data on customer spending habits to tailor offers to individuals. More fashion retailers would be wise to follow their lead.

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