Every retail segment yearns for ongoing and sustainable customer loyalty. Acquiring new customers, retaining them, and acquiring more new customers via successful loyalty programs that engage patrons in unique and compelling ways are keys to success. The health and beauty segment enjoys vibrant customer loyalty.
Take Ulta Beauty, for example.
A large part of its current success can be attributed to its Ultamate Rewards loyalty program. Ulta Beauty CEO Mary Dillon noted the powerful competitive edge that the company’s loyalty program provides during last month’s first-quarter earnings call.
“Growth in our loyalty program continues to fuel our business results,” Dillon noted. “Ultamate Rewards membership grew to 19.4 million active members, up 25% year-over-year. This continued acceleration and signups reflect our store associates’ efforts to convert new members and strong traffic, driven in part by our advertising campaign. The number of members shopping increased as well as their average sales per ticket, per visit.”
What’s more, Dillon said that loyalty member retention has increased steadily each quarter.
“Using our loyalty program points as currency, our CRM team is working closely with our merchants and our brand partners to continue developing targeted and relevant campaigns that are increasingly resonating with our guests,” she explained. “Our marketing mix continues to evolve with great balance across television, radio, digital and social media as well as our traditional print vehicle. There are several factors coming together to drive the momentum of our business: Healthy consumer demand in the beauty category, also Beauty’s unique and relevant format and positioning and effective collaboration across the enterprise, which is driving strong execution of our growth strategy.”
Sally Beauty
Sally Beauty, the largest beauty supplier in the world, offers a wide range of exclusive professional grade products to licensed beauticians and do-it-yourself stylists alike. The international beauty retailer and distributor brought on Ryan Linders as Vice President of CRM & Loyalty to revamp its CRM and loyalty program.
The loyalty program is a paid for discount program. Members pay $5 for a yearly membership and that gives them 10% straight off the top of pricing. And then the extra layer is if members spend $25 in a month, then next month members receive an additional 15% off offer on top of the initial 10%.
Linders wanted to make the program right for the customer, making it more efficient and leveraging CRM to make that happen.
“We were previously focused around the professional customer, like a licensed beautician or a licensed stylist,” Linders told Loyalty360. “That’s how the brand was built. But the growth opportunities are with the retail customers who can just come in off the street and buy hair color because they want to do it themselves. We’re now selling salon quality products direct to the consumer more from a DIY approach.
And once the customer starts doing it themselves, it’s something they can pick up every six to eight weeks. What’s good for us is that’s sticky traffic. So we not only sell the hair color, we sell the conditioner too. And once you’ve colored your hair, we sell touch up products to extend the life of the color and root coverings and so on. This gives us a lot of opportunities when you look at it from a CRM perspective. If I know who’s buying hair color, I can obviously trigger them to buy the follow up conditioner. And, at a certain point in time, drive them to buy other follow up products such as touch up or a new re-color because we’ll know that their roots would be showing. So that’s the cool opportunity we do with customer loyalty, supported by the other side of my department of CRM.”
Sephora
Beauty Insider is a free club offered to Sephora shoppers. Each time the member spends a dollar on a Sephora product, it is worth one point. The points can be redeemed for makeup, perfume, and other items sold at Sephora stores. There is a VIB and VIB Rouge status that can be attained once a certain number of points have been reached.
This French chain of cosmetics stores was founded in 1970 and features nearly 300 brands, along with its own private label. Its Beauty Insider loyalty program, which launched in 2007, has more than 10 million members.
What’s more, Sephora began opening stores inside J.C. Penney in October 2006. Today, there are Sephora locations in more than 485 J.C. Penney stores across the country. Utilizing a smaller footprint than a standard Sephora store, each one is located in the center of a J.C. Penney store and features the signature Sephora look and beauty assortment.
CVS
CVS/pharmacy, the nation’s leading retail pharmacy, launched the first-ever beauty club program for the chain-drug channel in 2011.
The CVS/pharmacy ExtraCare Beauty Club, an extension of the CVS/pharmacy ExtraCare® Loyalty Program, provides ExtraCare® card holders who register their cards with additional rewards on beauty purchases and other beauty-specific benefits. CVS/pharmacy Beauty Club members receive a 10% off beauty shopping pass upon enrollment, $5 in ExtraBucks® rewards with every $50 beauty purchase and $3 in ExtraBucks® rewards on the member’s birthday as well as special beauty offers throughout the year. Members will also receive monthly email newsletters with exclusive coupons, tips from experts and new product information.
Due to the CVS ExtraCare loyalty program, company officials knew what customers wanted from their beauty shopping experiences. The program offers members insider access to deals, expert tips, and exclusive product access and information.