Customer Loyalty in Apparel – Thematic Research

Customer loyalty is defined as the relationship between a customer and a retailer, built over time, because of which an existing customer repeatedly chooses the retailer over its competitors when making a purchase. Apparel retailers can be classified based on the target audience they cater to and can create their loyalty programs accordingly. Designer brands like Marc Jacobs, Gucci, and Dolce and Gabbana have a set audience that shows a high level of loyalty not only because of the product but also due to the prestige of wearing those brands. Thereby, these retailers offer a more curated and personalized approach towards their affluent customer base.

Apparel retailers can be classified based on the target audience they cater to and can create their loyalty programs accordingly. Designer brands like Marc Jacobs, Gucci, and Dolce and Gabbana have a set audience that shows a high level of loyalty not only because of the product but also due to the prestige of wearing those brands.  Apparel retailers adopt a variety of approaches in building their loyalty programs. It is essential for any apparel retailer to have a strong omnichannel presence, including on social media as this has a wide audience and can be used to promote progress in areas such as sustainability and inclusivity. Apparel retailers can improve customer retention by providing empathetic customer service. In times of any issue with a purchase, a customer feels more valued if they feel listened to and given an immediate solution. Retailers should analyze the entire customer journey, rather than considering customers only as a point for sale.

What are the key trends impacting the Customer Loyalty in Apparel sector?

The main trends set to impact customer loyalty are classified as technology trends, macroeconomic trends, consumer trends, and regulatory trends.

AI-based technologies:

Retailers are striving to improve the online shopping experience by launching various technology-driven initiatives on their websites, aimed at enabling customers to make sound purchase decisions and reduce the chances of order returns. Technologies like AI and machine learning, and their positive implication over other technologies like geolocation, augmented reality, and virtual reality, are heavily enhancing the experience of loyalty programs. Examples include Amazon Prime which has a huge impact on customer loyalty with its tech enabled Prime Day event and deals specifically for its members along with personalized notifications and product recommendations.

COVID-19:

COVID-19 has impacted the apparel sector in various ways. There has been an over-reliance on online channels for shopping due to lockdown restrictions across countries and the risk of contamination in physical stores once lockdowns were lifted and stores reopened. This change in consumer consumption behavior, supported by the availability of cheap and reliable internet, has created challenges for retailers with less-developed online propositions. Retailers are customizing their loyalty programs to provide specialized services to a wider customer base. Nike, for example, has employed a wise strategy to enhance engagement using digital platforms during the COVID-19 crisis; it is offering its NTC Premium service for free to engage with its customers. Furthermore, Nike began offering health tips on its website and social media channels, for example on how to maintain a healthy mind-set, movement, nutrition, and sleep during lockdowns. 

Fulfilment:

Despite several advantages that online retailers and marketplaces have, they are still striving hard to overcome their primary hurdle – last mile delivery. This entails logistical complications, issues with third-party delivery partners, and requires a range of data analytics tools to make delivery as efficient as possible. But for loyal consumers, with respect to a frictionless experience, fulfilment comes down to three core aspects: the cost of delivery, the speed of delivery, and the flexibility of both. While still very much in trial stages, retailers are exploring automated vehicles, drones, and robots to fulfil orders to meet high consumer expectations.

What are the geographical dynamics in the Customer Loyalty in Apparel sector?

Customer loyalty initiatives adopted by apparel retailers vary across regions. This is because of the dynamic nature of customer requirements which generally vary by the country they live in, their income level, the economy, and the standard of living among others. 

Asia-Pacific:

In China, loyalty programs have been made mainstream by Alibaba, which has successfully incorporated the loyalty programs in the customer journey through various touchpoints. Also, Alipay launched a loyalty program called Ant Forest in late 2016 which has grown over the years; this allows customers to ascertain how environment friendly their purchase is and receive green points as rewards. India’s largest loyalty program PAYBACK India is a coalition between LOYALTY PARTNER, a German loyalty program operator, and i-mint.

The America:

Large apparel retailers in the US have been quick to adopt omnichannel strategies to enhance the customer experience and drive loyalty. They are integrating bricks-and-mortar stores, online websites, mobile applications, and social media to provide a seamless shopping experience for customers. Moreover, companies such as Walmart and Amazon are improving delivery services such as click-and-collect to provide more convenient fulfilment.

Europe:

Europe is a mature and saturated market for retailers; companies operating in this region must innovate their loyalty schemes if they are to remain relevant to customers. This includes introducing new tools and technologies on their websites, apps, and social media platforms, such as visual search, augmented reality, and voice search to enhance the customer journey and boost engagement. In January 2020, ASOS started showing products on models of various sizes, to enable shoppers to make sound purchase decisions by looking at a model image of someone in a similar size to them, helping to reduce return rates.

Middle East & Africa:

As in other regions, online penetration in Middle East & Africa has increased in recent years and retailers should adjust their engagement strategies to drive loyalty among consumers accordingly. The renowned Landmark Group in Dubai launched the Shukran Rewards loyalty program in partnership with 57 global brands, including apparel retailers.

Who are the key players that have made mark in Customer Loyalty in Apparel sector?

Amazon, ebay, ASOS, H&M, Walmart, Alibaba Group, JD.com and Everlane are the key players that have made mark in customer loyalty in apparel sector.

Customer loyalty in apparel sector, by key players

To know more about key players, download a free report sample

Market report scope

Scope:

• Customer loyalty leads to greater customer retention
• Customer loyalty requires more effort than brand loyalty
• Loyal customers generate greater value for a business over time

Reasons to Buy

This report identifies the important themes early, enabling companies to make the right investments ahead of the competition, and secure that all-important competitive advantage.