Luxury Institute News

August 29, 2013

Retail loyalty programs add tiers to reward big spenders

By Kelli Grant
CNBC
August 28, 2013

Taking a page from airline programs, more retailers are adding elite levels with extra perks to their loyalty packages. But shoppers may find membership nearly as pricey as a first-class airline ticket.

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.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute:
http://www.cnbc.com/id/100991902

August 14, 2013

Successful Rewards Programs Prove That Even Wealthy Shoppers Like Freebies And Special Gifts

(NEW YORK) August 14, 2013 – In a new survey of affluent consumers by the Luxury Institute, wealthy shoppers earning at least $150,000 a year share detailed observations and evaluations of various loyalty and rewards programs, and offer suggestions for improvements to existing frequent shopper initiatives.

Overall, 72% of wealthy consumers participate in some kind of loyalty program, with the most popular ones connected to credit cards, airlines, hotels and grocery stores. Men are significantly more likely to be members of airline and hotel rewards programs, while women are disproportionately represented in programs sponsored by grocery stores, drugstores and department stores. Previous Luxury Institute research has shown that Sephora, American Express and Amazon are the top three favorite rewards programs among affluent consumers.

Very few respondents say that they belong to a luxury brand rewards program. The main perceived benefits of luxury brands’ loyalty programs are special offers and rewards, earning and redeeming points, and free goods and services.  Free gifts carry more importance among women, shoppers under 50, and those with net worth less than $1 million.

Satisfaction with existing loyalty programs is high and most high-income shoppers say that they have had positive experiences with their memberships.  The vast majority of shoppers report that loyalty programs exert a strong influence over purchasing decisions.

“Loyalty Programs combined seamlessly with one-to-one customer relationship building can be highly effective in driving conversion and retention while making data collection easier,” says Luxury Institute CEO Milton Pedraza.

About Luxury Institute (www.LuxuryInstitute.com) The Luxury Institute is the objective and independent global voice of the high net-worth consumer. The Institute conducts extensive and actionable research with wealthy consumers about their behaviors and attitudes on customer experience best practices. In addition, we work closely with top-tier luxury brands to successfully transform their organizational cultures into more profitable customer-centric enterprises. Our Luxury CRM Culture consulting process leverages our fact-based research and enables luxury brands to dramatically Outbehave as well as Outperform their competition. The Luxury Institute also operates LuxuryBoard.com, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.