Whether it is consumers repeatedly purchasing from a trusted brand or a business giving back to its frequent customers, in the beauty industry, loyalty sells. Eighty-three percent of consumers report belonging to brand loyalty programs, stating that this influences their decision to purchase from the brand again; a further 95% say that loyalty programs help them feel closer to a brand. According to Paymotion, brands have a 60 to 70% chance of selling to an existing customer compared to a 5 to 20% chance of selling to a new prospect. Hoping to encourage sales through a sense of community, Selfridges is the latest retailer to introduce a loyalty program.
Named Selfridges Unlocked, the loyalty program gives members access to Selfridges event invitations, services, and product launches before regular shoppers. The program was inspired by Selfridges founder Harry Gordon Selfridge, who offered keys to the first customers on the store's opening day in 1909 in the hopes they would "feel at home." Selfridges Unlocked furthers the sense of community put in place by Gordon Selfridge, who once famously said, "Everyone is welcome" at his store. This message is amplified through the choice to name members of the loyalty program "Keyholders."
Upon signing up, Keyholders are given their own "key" in the form of a QR code, which can be added to the wallet mobile app and scanned at various retail spots. Each Keyholder that checks in at Selfridges will be entered into a prize drawing to win a day of experiences at Selfridges, with one winner announced each month. Selfridges Unlocked also enables consumers to make their purchases go a little further. Each time Keyholders make a purchase and scans their QR code, a percentage of the sale will be donated to Centrepoint, Selfridges' charity partner that focuses on bettering the lives of young homeless people.
Customers who have already signed up and those who intend to are able to have full access to Selfridges' summer line-up, which includes exclusive product launches, masterclasses with respected beauty individuals, as well as a first look at supper clubs and specially curated experiences in partnership with the Manchester International Festival. Alongside this, Keyholders will have access to Selfridges' debut Swap Shop—an initiative where customers can exchange their older, pre-loved clothing items with those of the same value. Members will also receive perks on a smaller scale, including free UK shipping on orders over £150 ($190).
Selfridges is joining the ranks of other retailers who already have strong loyalty programs. Sephora’s Beauty Insider leads the way with a loyalty program that rewards its customers with points for purchases online and in-store. The program boasts 35 million members, from which 80% of its sales come. Ulta Beauty’s Ulta Ultimate is a close second with a program that appeals to its 32 million members (who make up 95% of all the retailer's sales) with perks throughout their entire birthday month. The program features loyalty tiers offering rewards that progress as points are earned through purchases.
As an increase of beauty brands continue to enter these retailers and expand their beauty offerings, the expectation is that more cosmetics fans will begin to shop in stores, increasing footfall and loyalty members. However, to gain customer loyalty, retailers must offer something outside the box that consumers will not find elsewhere. Selfridges Unlocked has the advantage of its beauty masterclasses to entice the consumer, which could set them up for success in a competitive space.
"The bar is raised on the pace of play, and the 'adapt or die' industry conversations now extend to loyalty strategies. Customer-centric leaders deliver innovation faster, forcing everyone to lift their game. Brand programs that didn't exist three years ago are now leading the world in volume and importance. A rich body of data is accessible for advanced learning, scenario planning, and real-world use. Sharing what customers want naturally brings forth more competitive customer-centric innovation, which is good for everyone," says Sean Claessen, Chief Strategy Officer at Bond Loyalty.
While Selfridges is on the right path to achieving customer satisfaction through Selfridges Unlocked, as stated by Claessen, trends that did not exist three years ago are now industry leaders. Ultimately, the retailer (or any other competitor) needs to progress with the fast-changing tides of consumer demand to stay successful.
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