Thursday, June 9, 2016

For Free Or A Fee? Why More Retailers Are Launching Premium Customer Loyalty Programs

The success of Amazon Prime and other programs has many retailers rethinking their approach to customer loyalty.

Gary Friedman has a pronounced distaste for discounts. The outspoken Restoration Hardware chairman and CEO blames the retail sector’s reliance on sales and pricing promotions for many of the problems facing the upscale home furnishings chain.

“Much of how we behave promotionally is left over from the Great Recession,” Friedman wrote in a February letter to shareholders published ahead of Restoration Hardware’s disappointing Q4 2015 earnings report. “The multiple sale events and email communications do not reflect the brand we are building, nor are these promotions aligned with how our customers shop with us.”

Restoration Hardware is eliminating traditional promotions altogether in favor of introducing a premium customer rewards program. Priced at $100 per year, its new RH Grey Card offers shoppers a flat 25% savings on all regularly priced merchandise across all of Restoration Hardware’s brands, along with 10% savings on clearance merchandise, complimentary interior design services and reduced interest rates on its RH credit card.

“Our lives are filled with complexity—and we long to break through the clutter to find simplicity,” Friedman said in a press release announcing the RH Grey Card program. “We want to shop for what we want, when we want and receive the greatest value. So rather than navigating countless promotions, we’re changing things… because time is the ultimate luxury.”...

Read the entire article courtesy of Retail Dive:

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