Loyalty is about knowing and rewarding customers, and the more intimate the purchase, the more you need to know about personalization.
Speaking with PYMNTS for the “Summer Loyalty Series” sponsored by Banyan, Eugen Neiculescu, chief experience officer at direct-to-consumer (D2C) lingerie brand Adore Me, said data is the key to unlocking loyalty, and the brand is heading deeper into loyalty waters this year.
Neiculescu noted that the pandemic accelerated trends and then doubled back on itself, first with the dramatic growth of online retail for D2C brands that forced brick-and-mortar retailers to adapt and embrace digital strategies. Then came the about-face where in-store shopping took off as masks came off and consumers reemerged, causing a slowing in eCommerce.
Digitally native Adore Me leveraged the pandemic’s eCommerce spike “to capture additional business from customers who were more used to the brick-and-mortar approach, let’s say the store experience,” he said, with features like a try-before-you-buy program. That meant sending customers products in their monthly boxes to try them, then keep and pay, or simply return unwanted items.
That was a winning strategy for Adore Me, which was acquired in January by Victoria’s Secret but operates as a standalone brand. Now, with the slowdown in eCommerce of the past 18 months, the pioneering intimate apparel brand is taking new approaches.
For example, while it has operated on a subscription membership model, Neiculescu told PYMNTS that in the coming months, Adore Me is beta-testing a new and different type of loyalty program.
“If we manage to create value for our customers in a way that they don’t need to purchase from somebody else, and we create a strong relationship with those customers, membership is a great way to deliver that,” he said, adding that “we’re working on launching a new loyalty program, something that goes well with the membership program. We’ve seen … [approximately] 15% of our customers will deliver more than half of our revenue. So, our goal now is to go even more into [data] details and try to reward her for her loyalty. We’re thinking about this as a traditional tier-based program, with points and whatnot for the savvier customers to get even more for their buck.”
The new data-powered loyalty program will debut later this year.
Given his role in crafting Adore Me’s online presence, Neiculescu is a student of customer behavior and said he is always thinking about creating an experience.
“Digital experiences in general offer superior ways to experiment, for example, or to personalize,” he said, noting that it’s difficult (if not impossible) to do things like A/B testing of offers inside physical stores.
“Digitally, you can do all those things,” he said.
For Adore Me, that’s coming down to deeper personalization and catering communications to specific audience segments. It’s cracking the code on “how do you manage to curate that experience in a way that is enticing for them to purchase from you, and once you have identified those customers in group segments or even more personalized than groups, how do you experiment and how do you test to see what is working and what is not working?” he said.
Neiculescu called that “the massive advantage of digital” in that ongoing tests can be conducted and quantified at scale. It’s going to come in handy as the new tiered loyalty program rolls out.
“We’ve seen a lot of the traditional businesses having to deliver that superior experience in the digital space, and customers voting with their wallet much more for the companies that were delivering a superior return experience, or a much easier buying experience online, or more accurate product information and so on,” he said, illustrating how loyalty has changed in just a few years.
Item-level data plays an important role in how Adore Me runs its membership program today, and it will take on an even more important role as the new program is deployed.
“We use data in pretty much everything we do, and we test a lot,” Neiculescu said. “The way we’re thinking about things is, for example, if a customer … has purchased a certain product and we know that she has maybe enough of those products, we’re thinking about giving her maybe more points if she purchases a different type of product or things like that.”
He used the example of a swim customer who “tends to be more of a one-off type of customer, more a la carte” than a lingerie customer. Knowing that swim customers tend to generate fewer returns “is very useful because then we can curate a better offer for her to try a different type of product, and then hopefully be [stickier] with our brand as she identifies new product categories that she likes.”
With its new loyalty program waiting in the wings, Adore Me is about to learn even more about its customers, Neiculescu said, and will have more data on which to make its recommendations.
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