Daily Insights

Lululemon’s Test and Learn Approach to Loyalty

By: Lili Meng | Jun 13, 2019

To safeguard the success of new or revamped programs, brands increasingly test loyalty programs through phased “soft” launches. Here’s how Lululemon made the leap into fee-based loyalty:.

By first incorporating loyalty elements into the account experience and then trialing a new loyalty program in several target markets, Lululemon was able to seamlessly transition into fee-based loyalty. The activewear brand already had the key ingredients in place for a loyalty program: robust account infrastructure, a differentiated site experience, and brand advocacy through ambassadors. Lululemon’s pilot loyalty program then determined the efficacy of the $128 annual membership fee and the value consumers find in the program according to Gartner L2’s report on the topic.

Brands that are looking to enable customer loyalty outside of a formal loyalty program can still take a leaf out of Lululemon’s book. High-end fashion brands—like Gucci and Diane Von Furstenburg, which sunset its official loyalty program in 2017—have especially benefited from infusing loyalty elements into account features and content when loyalty programs are not fully aligned with marketing strategies according to Gartner L2’s report on the fashion industry. For non-DTC brands that defer to retailers for loyalty management, building out account features can still be advantageous for implicit and explicit data capture that helps hone the site experience.