Loyalty Program - Apparel and Footwear Retailer - Essay Example

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Loyalty Program – Apparel and Footwear Retailer The primary focus of this paper is to discuss the issue of Loyalty programs, how do they operated, what are their benefits to the customer as well as the retailer and what are the risks and drawbacks…
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Loyalty Program - Apparel and Footwear Retailer
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"Loyalty Program - Apparel and Footwear Retailer"

“Gap”, “Banana Republic” and “Old Navy” are the divisions whose focus is towards the clothing and apparel industry whilst “Piperlime” and “Athleta” divisions are a part of the footwear industry (. Loyalty programs are considered to be techniques used by the marketing team of any organization in order grab and retain new and old customers respectively. The basic phenomenon of a loyalty program is to reward a customer in such way that he gets encouraged and enhances his/her buying ability. Loyalty programs are designed in such a way that customers are issued a particular loyalty, points or club card. This card is similar to credit card and it usually holds barcode or a magstripe on its back. Every time a customer makes a purchase, his/her loyalty card is scanned via machines such as the bar code readers. This process entitles the customer to either receive a discount on his/her purchases or the customer, in some instances, is given the option to gather reward points which he/she can claim at any future date of purchase. Loyalty cards like these are issued upon the request of a customer but prior to the issuance of such cards; certain information regarding the customer has to be filled up by him/her on some sort of an application form. Loyalty cards like these are commonly found in the USA. Several retail stores around the USA require cards like these to be shown to the retailer in order to avail reduced loyalty prices. Many stores in the USA allow for fuel discounts as well. This loyalty card program also became famous within the airline industry in 1979, where customers were awarded with points which could be availed at later dates for free air travel (Crandall, 2010). Gap Inc also uses its own unique loyalty cards to increase their customer’s buying power and increasing its brand loyalty. Loyalty cards earn benefits for both the customers as well as the retailer/seller. Customers earn benefit by availing numerous discounts being offered by the retailers, except these discounts, the customers are also able to save those discounts monetarily in the form of reward points and those reward points can later be converted in the form of future free or discounted purchases. At Gap Inc, these loyalty programs also help in aiding many different participating schools and other non-profit organization by diverting a percentage of the amount spent by the customers within their retail outlets. The customer’s information is kept confidential in accordance with the terms stated by the customers (GAP, 2009). The advantage that the retailer gains from such loyalty programs is the fact that customer’s buying habit may be enhanced which would result in higher revenues and hence higher profits for the retailer. Such loyalty programs also help in improving the brand image of a particular retailer in the eyes of the customer and this consequently results in better goodwill of the retailer. Loyalty programs are also a step that helps in customer retention, the trick in loyalty programs is to create such a program that may be beneficial to both the customer (in terms of better discounts) and the retailer (in terms of increased revenue and profits from products which might not get sold off quickly). Each and every customer is rewarded incrementally based upon their Read More
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