How 5 Brands Adapted Their Loyalty Programs for a Post-Covid World
Faced with a consumer landscape that changed radically during the Covid-19 pandemic, brand marketers today have no choice but to adapt. Consumer loyalty took a nosedive in 2020 as shoppers shifted toward alternative brands and filled their shelves with generic products.
According to McKinsey, more than 75% of consumers tried new brands, places to shop, or methods of shopping in 2020. The reason? Product availability was high on the list, but so were price and the availability of promotions. Now, as the vaccine rollout continues and states work to get back to normal, brand marketers are finally coming up for air and looking at how they can adapt their loyalty and rewards programs for the post-Covid world.
Here’s how five brands have navigated the changes and adapted their loyalty programs to meet new consumer demands.
1. Sephora: Emphasizing a Return to Normal
The changes that Sephora has made to its loyalty program during the pandemic may be unexpected, but they were designed with a clear end point in mind. The latest iteration of Sephora’s “Beauty Insider” loyalty program invites customers to participate in a number of exclusive experiences, including expanded makeup sampling choices and access to private brand events. Sephora sees the light at the end of the tunnel in 2021, and the company is betting that its customers will want to return to in-store shopping and attend even more live events once social distancing restrictions have loosened.
2. Michaels: Pushing Members onto Mobile
Paper is out, but vouchers are in. That’s the takeaway from Michaels’ latest loyalty program changes. The national craft store chain has introduced new incentives that allow members of its loyalty program to earn more rewards from purchases and receive bonus offerings, weekly rewards specials, and seasonal promotions. Michaels is also giving its loyalty program members rewards vouchers for every $5 they collect. Members are being encouraged to access those new rewards through Michaels’ mobile app, which cuts down on printing costs, minimizes the spread of germs, and increases marketing opportunities.
3. American Airlines: Extending Redemption Deadlines
Nothing makes consumers more upset than not being able to use the reward points they’ve earned. American Airlines is working to alleviate that issue in light of travel restrictions in 2020 by adding more generous mileage bonuses for members of its loyalty program who purchased miles in recent promotions. The company has extended elite status for AAdvantage members until 2022 and introduced special credits for future travel on vacations packages for its elite members. It also launched a pilot program with JetBlue through American Express Membership Rewards that gives certain cardholders the chance to round up purchases to the nearest dollar and turn the change into rewards points.
4. 100% PURE: Creating a Positive Social Impact
Understanding your audience is the key to building a successful loyalty program. 100% PURE has done just that. The organic beauty brand homed in on its core demographic and discovered that its customers have a passion for helping others. 100% PURE was then able to tweak its existing loyalty program to put more emphasis on “compassion and empathy.” Members of the Purist Perks loyalty program can now donate a $5 bottle of hand sanitizer spray to those in need. For each of those donations, members receive extra loyalty points. This makes customers more willing to donate, and it also increases the amount that’s spent during each transaction.
5. Southwest Airlines: Adding Personalized Experiences
Possibly no industry was hit harder in 2020 than the travel industry. One of the ways airlines have adapted is by putting increased focus on engagement and rewards personalization. Southwest Airlines has gone all in on personalized digital interactions in its Rapid Rewards program. It’s now using those interactions to measure its program’s success. During an online loyalty summit hosted last year, Southwest’s Corbitt Burns said the company is using relevant customer data and working to deliver more personalized experiences, all in a bid to regain consumer trust and adapt its Rapid Rewards program to the new normal in 2021.
Stephanie Miles is a senior editor at Street Fight.