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Luxury fashion loyalty programs aren’t just a myth. A reward system can indeed work in this industry without cheapening the brand image; you just need to take the right approach. Loyalty programs are no different from any other tool in your arsenal, as you can consistently reshape them to fit your needs.

Luxury fashion lives and dies on customer engagement. People don’t come to you for discounts or bonus points, but for VIP treatment they can’t get anywhere else. This lesson is especially relevant in the post-COVID-19 era, where people are hungrier for impactful shopping moments than ever before. In order to stand out and forge long-lasting customer loyalty in the current climate, luxury fashion loyalty programs must focus on unforgettable experiences.

What Is a Luxury Fashion Loyalty Program?

There’s one word that describes luxury fashion loyalty programs perfectly: exclusivity. Affluent buyers wish to be rewarded just like anyone else, just with the added expectation of higher-class treatment. Therefore the reward system should focus on gifts and benefits that either hold higher value or only available for the upper echelon of the member base. 

In terms of gifts, luxury fashion loyalty programs have a higher tendency of featuring experiential rewards, including designer clothes that are otherwise unavailable for purchase, signed merchandise from famous fashionistas or influencers, as well as partner rewards from high-end restaurants and hotels. 

As for exclusive treatment, luxury fashion loyalty programs offer VIP tiers that are only available to the top 100 highest spenders. Entering such a prestigious group requires a high customer lifetime value in exchange for an outstanding status within the community.

The Biggest Customer Retention Challenges for Luxury Fashion

The lack of personalization is one of the biggest challenges luxury fashion companies face. In order to nurture top spenders and give them a taste of exclusivity, the personalized experience needs to be both scalable and readily available across all channels. Other challenges include:

• Most customers only purchase once, resulting in high churn rates
• The top segment is already loyal — with store associates sometimes knowing customers on a  first-name basis — but there's little to no incentive to make first-time buyers stick
• Luxury brands are often afraid of cheapening their brand with discounts and earn & burn style program elements
• One-on-one communication is highly important, yet hard to achieve
• Brands require benefits and rewards capable of exciting affluent VIP customers who have it all

Best Loyalty Program Features to Stand Out as a Luxury Fashion Company

Being able to change and adopt new strategies is the route to success. Transforming the ways you engage with customers will no doubt yield positive changes in their spending habits. Contests, exclusive clubs, or user-generated fashion content are other forms of gamification you can use for the luxury fashion audience without cheapening the privilege program. By making the program available on a smartphone app, you can unlock even more new opportunities. 

This is just the first half of our guide. To learn about the best features and see some inspiring loyalty program examples from top fashion brands, check out our article.