10 Best Customer Loyalty Programs In Retail That Works

According to a Bain & Company study, a mere 5% increase in client retention rates can result in a 25%–95% increase in earnings. These numbers highlight the significant effect that thoughtfully created loyalty programs can have on a retailer's profitability.

Not to overstate the significance of customer loyalty programs in retail industry; they are now integral resources for building strong client relationships and boosting brand loyalty.

In this blog, we are going to look at the top 10 customer loyalty programs in retail, which not only work but also set the bar for creativity and efficiency in building brand loyalty.

10 Best customer loyalty programs In retail

1. Nordstrom Rewards

Leading fashion store Nordstrom, Inc. offers stylish apparel, accessories, and shoes for men, women, and children and has one of the most effective customer loyalty programs in retail sector.

The four primary tiers of Nordstrom Rewards are determined by annual spending:

• Member: All clients who register for the program are eligible to access the entry-level tier. Every dollar spent earns a member one point.
• Influencer: A customer must spend $500 or more a year to be eligible for this tier, which awards two points for every dollar spent.
• Ambassador: Customers who spend $5,000 a year get into this category, where they are awarded three points for every dollar spent.
• Icon: The top tier, which is only available to users who spend $15,000 or more a year, awards four points for every dollar spent.

Nordstrom Notes, which are effectively shop credits that may be used for future purchases, can be obtained by exchanging points earned through purchases. Members receive rewards like early access to the annual Nordstrom Anniversary Sale, special offers, complimentary basic changes, and doorstep delivery in addition to point accumulation.

Impact on the company

The company's performance has been greatly enhanced by the Nordstrom Rewards program. More than half of all sales (70%) come from members, demonstrating how well the program works to increase spending and repeat business. Increased annual spending is encouraged by the tiered system, which boosts revenue.

2. Kohl's rewards

Kohl's is an American department store retail chain and has a standout customer loyalty program in the retail industry. Members of Kohl's Rewards, a straightforward but efficient program, receive 5% Kohl's Cash for each transaction they make, regardless of the total amount spent. With Kohl's Cash, shoppers can effectively get money back on their purchases because it is awarded in $5 increments and can be redeemed within specific timeframes.

Key features of Kohl's Rewards include:

• Earnings: With each purchase, members receive 5% in Kohl's Cash.
• Redemption: During the specified redemption periods, Kohl's Cash is automatically applied to the member's account.
• Special Offers: Throughout the year, members get exclusive discounts and offers, such as a birthday present.
• Convenience: Members can effortlessly monitor their earnings, prizes, and special offers thanks to the program's integration with the Kohl's app.

Impact on the company

Kohl's Rewards has improved client retention and encouraged repeat business, which has greatly improved the company's success. Enrolling millions of customers, the program guarantees steady cash sources. Customized promotions and special discounts increase client happiness and strengthen loyalty, and the easy connection with Kohl's app boosts user interaction.

3. Lululemon Sweat Collective

Lululemon is a seller of yoga pants and other yoga clothing and has now grown to include athletic wear and lifestyle clothing. Lululemon Sweat Collective is a special loyalty program designed exclusively for fitness professionals and community leaders. Fitness instructors, personal trainers, athletes, and wellness professionals who encourage their communities to lead active, healthy lifestyles are the target audience for the Lululemon Sweat Collective program.

Important elements of the program consist of:

• Exclusive Savings: Lululemon goods, both in-store and online, are discounted by 25% for members.
• Early Access: When new products and exclusive collections are released, members get first access.
• Community Events: Lululemon hosts training sessions, workshops, and exclusive events that are exclusive to members alone.
• Opportunities for Networking: The programme creates a supportive community by connecting fitness professionals.
• Access to Resources: To assist members in expanding their fitness companies, members get access to instructional materials and resources.

Impact on the company

Through invitation-only events and networking opportunities, the program strengthens relationships with the fitness community and improves community participation. The discounts stimulate members' regular purchases, influence their customers and followers, and push sales growth. Furthermore, Lululemon benefits from the insightful feedback provided by fitness professionals, which helps the company improve its products and stay ahead of market trends.

4. IKEA Family

The global home furnishing brand IKEA incorporates the IKEA Family a well-regarded customer loyalty program designed to enhance the shopping experience for customers. The program aims to build consumer loyalty and encourage frequent visits to IKEA stores by providing a variety of exclusive benefits and discounts. Joining the IKEA Family program is free, and members receive a number of benefits. 

Key traits of the program consist of:

• Monthly offers: Special monthly savings on a range of goods.
• Events and workshops: Entry to seminars, workshops, and events exclusively for members.
• Extended product guarantees: Better coverage than the normal guarantee on a few chosen products.
• Benefits of protection: Free protection against unintentional damage to some products bought with an IKEA Family card.
• Prize draws: You can win IKEA gift cards by automatically entering regular prize draws.

Impact on the company

By providing unique discounts and improving the shopping experience with additions like free coffee and special events, the IKEA Family program has dramatically increased by 150 million members and brought customer retention and sales. The initiative fosters a sense of community among participants, increases brand loyalty, and promotes return visits.

5. The North Face XPLR Pass

The North Face has been a leader in outdoor performance clothing and gear for hiking, camping, and other adventures. The North Face XPLR Pass is a loyalty program that prioritizes encouraging outdoor exploration and sustainability over standard rewards. Members will receive rewards for their purchases and outdoor activities with the XPLR Pass.

Key features include:

• Points system: In addition to making purchases, members can accrue points by going on outdoor activities including hiking, camping, and environmental volunteer work.
• Exclusive rewards: You can exchange points for merchandise, events like outdoor workshops and guided adventures, and gear and clothing.
• Initiatives for sustainability: The program rewards members for taking environmentally responsible actions, such as recycling used equipment or volunteering at cleanup days, to highlight sustainability.
• Community engagement: Participants are members of a group of people who are passionate about the great outdoors and environmental conservation.

Impact on the company

The program's emphasis on sustainability and exploration is consistent with The North Face's basic principles, which improves the company's reputation and strengthens its relationship with clients. By using a point-based rewards system, this strategy not only boosts sales but also builds brand advocacy and loyalty and brought a +54% increase over monthly website traffic.

6. Patagonia Worn Wear

Patagonia is a clothing brand and is a special loyalty program for worn wear that encourages users to recycle, repair, and reuse their clothing and equipment to promote sustainability. This program is in line with Patagonia's dedication to protecting the environment and minimizing waste in the clothing sector.

Key features of the program include:

• Repair Services: To prolong the life of worn-out or broken apparel and equipment, Patagonia offers repair services.
• Trade-In Program: Through the "Trade-Up" program, customers can exchange their worn Patagonia apparel and equipment for store credit.
• Certified Recycled Collection: It promotes sustainable consumption by providing a selection of goods manufactured from recycled materials.
• Worn Wear Events: Patagonia arranges classes for its clients to learn about sustainable practices and repair methods.

Impact on the company

The program extends the life cycle of products and lessens the impact on the environment through certified recycled collecting. Environmentally conscious consumers are more engaged and loyal as a result of this effort. In addition, Worn Wear serves as a platform for sustainable practice teaching and makes money through the sale of recycled goods and repair services. In its first year of business, Worn Wear sold more Patagonia products than eBay.

All things considered, the program upholds Patagonia's core principles, improves client interactions, and establishes a standard for environmentally friendly efforts in the clothing sector.

7. Macy's Star Rewards

Macy's Star Rewards is another holistic customer loyalty program in retail that offers a variety of benefits and prizes in an effort to improve the shopping experience for Macy's consumers. The program's objectives are to boost spending and customer retention while offering tailored incentives to promote return business.

Key features of the program include:

• Tiers: Three tiers comprise silver, gold, and platinum which are divided according to annual spending levels.
• Points earning: Members accrue points for making eligible in-person and online purchases.
• Exclusive perks: Every tier comes with exclusive perks like free shipping, birthday offers, and unexpected savings days.
• Star money: Members can use Star Money, which can be redeemed at Macy's just like cash.
• Benefits: Extra benefits include free purchase adjustments, entry to member-only specials, and bonus events.

Impact on the company

The Macy's Star Rewards program, which offers tiers of benefits to encourage larger spending, has increased customer retention and sales dramatically. Special benefits, including bonus events and birthday offers, improve the shopping experience and encourage customer loyalty. In 2021, Macy’s loyalty program accounted for over 70% of its purchases.

In addition to increasing transaction frequency, the program's structure offers useful information for inventory management and targeted marketing campaigns. All things considered, Macy's Star Rewards increases competition, fortifies brand loyalty, and promotes steady growth in the retail market.

8. Barnes & Noble 

By offering several advantages and special deals, the Barnes & Noble membership program is a loyalty program designed to improve the bookstore's relationship with its customers. The goal of this program is to entice readers and regular customers to come back to Barnes & Noble for their enjoyment and reading needs.

Key features of the program include:

• Exclusive to members offers: All year long, exclusive savings and promotions, like bonus coupons and unique sales occasions.
• Free express shipping: There is no minimum purchase requirement for members to take advantage of free express shipping on online shopping.
• Benefits of the café: Snacks and beverages are included in special discounts and savings.
• Early access: Members can get their hands on highly sought-after books before they sell out thanks to early access to new releases and best-selling titles.
• Birthday offer: As an expression of gratitude to you, a unique birthday voucher or offer is given.

Impact on the company

The Barnes & Noble Membership Program offers free delivery, early access to new releases, and exclusive discounts to increase consumer loyalty and engagement. This promotes return business and repeat purchases, which enhances revenue and client retention. 

In addition, the program offers insightful data that helps with strategic marketing and inventory choices. All things considered, it enhances Barnes & Noble's competitive position by providing special advantages that appeal to book lovers and improve the whole buying experience.

9. Gap Good

Gap is an American clothing and accessories retailer, the goal of the Gap Good Rewards program is to increase consumer loyalty by providing customized prizes, special benefits, and environmental efforts. This program demonstrates Gap Inc.'s dedication to ethical business conduct and sustainability while offering its devoted clientele value.

Key features of the program include:

• Sustainability initiatives: Members can take part in environmentally beneficial activities, such choosing to get digital receipts or recycling their old clothes.
• Donations to charitable causes: A percentage of member purchases is donated to a number of nonprofit organizations by the programme in support of charitable causes.
• Special events: Invitations to exclusive shopping occasions and neighborhood events that support social responsibility and sustainability. special events.
• Flexible redemption: Points can be contributed to a charitable organization or redeemed for savings on subsequent purchases.

Impact on the Company

Gap Inc. not only drives sales but also strengthens its brand reputation among socially conscious consumers. The program's community-building events and data-driven insights further contribute to strategic marketing efforts and competitive advantage in the retail market. Overall, Gap Good Rewards underscores Gap Inc.'s commitment to customer satisfaction, sustainability, and responsible business practices.

10. CVS ExtraCare

CVS is a retail pharmacy chain and among the retail pharmacy industry's biggest and most popular loyalty programs is CVS ExtraCare. ExtraCare is a program designed to provide substantial discounts and benefits to regular clients of CVS Pharmacy. It also fosters excellent customer relations by encouraging repeat business and boosting consumer loyalty.

Key features of the program include:

• Earnings on transactions: Almost all transactions earn members 2% in ExtraBucks Rewards, which they may use to redeem cash for future purchases.
• ExtraSavings: Members receive exclusive coupons and customized offers straight through the CVS app, which they may print at the in-store coupon center.
• Pharmacy & Health rewards: For each ten prescriptions filled, ExtraCare members who sign up for the ExtraCare Pharmacy & Health Rewards programme receive $5 ExtraBucks Rewards.
• Beauty club: For every $30 spent on beauty products, members receive $3 in ExtraBucks Rewards.
• Exclusive to members promotions: Extra savings chances and entry to member-only sales events.

Impact on the Company

Through focused incentives, the program increases sales volume, particularly in the areas of pharmaceutical services and cosmetic items. Strategic marketing and stocking decisions are informed by valuable customer information obtained from ExtraCare transactions. The loyalty program brings 74 million members who are provided with a variety of rewards. All things considered, ExtraCare bolsters CVS's competitive advantage, encourages customer loyalty, and promotes steady growth in the retail pharmacy sector.

Concluding thoughts 

Customer loyalty programs in retail which offer several advantages to companies and customers equally, are an essential part of effective retail operations. Through unique advantages, tailored discounts, and fun community events, these programs not only improve the shopping experience but also boost sales, provide insightful consumer data, and build brand loyalty.