News

Retailer loyalty programs copycat airline industry

August 29, 2013

Retailers may be crafting their loyalty programs to reflect the airline industry — with elite levels and extra perks for shoppers who spend the most money, according to a post on cnbc.com:

In July, Sephora relaunched its Beauty Insider program, adding a reward level with free shipping, early access to new products and sales as well as VIP event invites for shoppers who spend $1,000 or more in a year. Around the same time, flash-sale site Gilt.com introduced its Gilt Insider Program, awarding shoppers five points per dollar spent and weekly bonuses for interacting with the brand. Tiers with extra benefits such as exclusive sales and a VIP customer service line kick in at the 5,000-, 10,000- and 25,000-point thresholds.

"To make it fair we crafted a program that rewarded engagement, i.e. site visitation and social interaction, in addition to purchasing, so that members could advance up tiers as they earned points," said Elizabeth Francis, Gilt.com's chief marketing officer.

They're not the only retailers to add extra perks for big spenders in recent years. Nordstrom and Best Buy beefed up their tiered rewards programs last year, and Starbucks, Gap and DSW are among the companies that also divide loyalty rewards by spending level.

According to the article, these types of loyalty programs become less about the price savings and more about access to exclusives, special treatment and experience.

Read more about customer loyalty programs.