The Wall Street Journal has a story about how some retailers - Nordstrom and Nike are among the more prominently mentioned - are using greater rewards as a way of keeping the luring customers and “wooing their biggest spenders with special services and access to private events.”
Some examples cited in the story:
• “Nordstrom’s revamped loyalty program, which will launch this fall and includes more than 10 million active members, has a new category to fete top spenders: invitation-only “icon” status that includes private dinners with designers and other exclusive events.
• “On Saturday, J.Crew Group Inc. stores will open an hour early for loyalty members, who will be treated to a light breakfast while they shop.”
• “Macy’s platinum cardholders will get special access to its Thanksgiving Day Parade, including an invitation to rehearsals and free grandstand seats.”
• “Nike Inc.’s new Manhattan flagship, slated to open early next year, will have a members-only floor with exclusive products and services such as personal shoppers.”
The Journal writes that “companies on average spend between 1% to 3% of their revenue on loyalty programs, according to Caroline Papadatos, who oversees the consulting practice of LoyaltyOne Co., which manages loyalty programs for retailers. But she said the overall investment can be much higher when experiences are layered on top of traditional monetary rewards.”
At the same time, “Retailers say it is worth the extra expense since loyalty members tend to spend more.”
Some examples cited in the story:
• “Nordstrom’s revamped loyalty program, which will launch this fall and includes more than 10 million active members, has a new category to fete top spenders: invitation-only “icon” status that includes private dinners with designers and other exclusive events.
• “On Saturday, J.Crew Group Inc. stores will open an hour early for loyalty members, who will be treated to a light breakfast while they shop.”
• “Macy’s platinum cardholders will get special access to its Thanksgiving Day Parade, including an invitation to rehearsals and free grandstand seats.”
• “Nike Inc.’s new Manhattan flagship, slated to open early next year, will have a members-only floor with exclusive products and services such as personal shoppers.”
The Journal writes that “companies on average spend between 1% to 3% of their revenue on loyalty programs, according to Caroline Papadatos, who oversees the consulting practice of LoyaltyOne Co., which manages loyalty programs for retailers. But she said the overall investment can be much higher when experiences are layered on top of traditional monetary rewards.”
At the same time, “Retailers say it is worth the extra expense since loyalty members tend to spend more.”
- KC's View:
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This shouldn’t be such a big stretch for retailers, but it remains one for most. There are very few that look at their numbers and figure out how to best cater to these customers, to nurture their relationships, to be more relevant and resonant to them … and you’d think that now, more than ever since there is so much competition from so many places, they’d be focused relentlessly on this issue.
The examples cited in the Journal story are more lonely scenarios than they should be.
