Loyalty & Rewards

Restoration Hardware Goes Members Only For Discounts

It’s sometimes hard to imagine, but not too long ago air travel was considered a luxury experience, no matter the location of a seat on the plane. One by one, however, the amenities that made taking the friendly skies friendly started to vanish — drinks stopped being free, legroom started shrinking to maximize per trip profit, and even peanuts and pretzels are now often only relinquished for a fee.

It’s a rather extreme case of nickel and diming customers, but one that has to come to mind for some longtime customers of Restoration Hardware. Because now that the high-end furniture brand has launched a members-only discount program, its customers will have to decide on more than just window treatments and matching sectionals.

Restoration Hardware chairman and CEO Gary Friedman announced the new program Wednesday (March 23), which will revolve around the RH Grey Card that “reimagines and simplifies the shopping experience.” For a $100 yearly charge, Restoration Hardware’s customers gain access to the following perks: a 25 percent store-wide discount, a 10 percent discount on items already placed on sale, no-limit interior design consultations at no extra charge and private access to sales events before the general public.

But to hear it from Friedman, the real value of the RH Grey Card comes from the elimination of unevenly scheduled sales events in favor of this subscription-based program.

Our lives are filled with complexity – and we long to break through the clutter to find simplicity,” Friedman said in a statement. “We want to shop for what we want, when we want and receive the greatest value. So rather than navigating countless promotions, we’re changing things … because time is the ultimate luxury.”

It’s a somewhat curious stance for Friedman and Restoration Hardware to take, especially when so many of its customers are usually aware that they’re going to spend top dollar on furnishings in return for top-quality styles and craftsmanship. For a retailer to not only say that they have a great new idea to save customers’ time, and then to go on and say it will only take $100 to do so, Restoration Hardware may be toying with the same dynamic that airline carriers did when they started packing more rows of seats into their planes — all the while reassuring passengers that they were committed to providing the same high-level service.

However, there is the chance that Restoration Hardware draws a different sort of clientele than the average budget airline trying to charge for peanuts. In fact, the brand’s recent financial and logistics struggles — The Wall Street Journal noted that a new line aimed at upscale millennials has suffered massive delays, with some items launched last year are not expected to ship until this June — have left some experts wondering if it’s not a calculated move to force some undecided or potentially low-spending customers into bigger and more expensive purchases.

“[The RH Grey Card] is a pay-to-play proposition,” Wendy Liebmann, CEO of WSL Strategic Retail, told the Minnesota Star Tribune. “It’s for the person who says, ‘I like the place, I like the aesthetics, I can afford it, so I want the card.’”

While it’s only a week into the experiment and far too early to gauge any kind of consumer response, it’s safe to say that most of Restoration Hardware’s consumers don’t have a critical financial decision to make; instead, it’s more likely that if they decline RH Grey Cards, they simply don’t want them. But what if the $100 annual fee is more of an Amazon Prime-style customer service upgrade than a straight membership to discounts?

According to Pam Danziger of Unity Marketing, that’s exactly what the free interior design services can be.

“The free design services and other service-oriented offerings are where these emotional connections will be made,” Danziger told the Star Tribune. “Brand loyalty is an emotion.”

It may be an emotion, but that doesn’t mean it can’t come with a price.


Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

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