How Torrid Digitizes Its Incentives Program to Help Fuel Customer Loyalty

The competitive world of retail forces every player to pull out all the stops to stand out. Discounts, special offers and buy one, get one free are just a few of the most common tactics. Other methods such as rebates and incentives involve retailers paying customers directly for patronizing their storefronts.

One retailer leveraging these methods is Torrid, a plus-size clothing retailer for women with 600 locations and an online storefront. Like many retailers of its type, the company leverages incentives to keep customers coming back for return visits.

“We use our loyalty program to further attract and convert new customers who visit our website and our stores, making it easy for them to enroll during their first visit,” said Neal Cotter, director of customer advocacy and insights at Torrid. “We also make the most out of every new customer we acquire through fun incentives that improve their retention long-term.”

Customers’ demand for digital incentives has grown during the past several years as their shopping activities have moved online. In a recent interview, Cotter offered PYMNTS an inside look at how Torrid is catering its incentives for this growing digital audience.

Why Rebates Are a Valuable Loyalty Tool

Retailers have several different incentive options available to them, ranging from discounts to rebates to loyalty programs. Cotter noted that different incentives serve different functions: Some are better at gaining new customers, while others are better at encouraging return visits.

“While traditional discounts encourage new customers to try our brand, the experience of earning and redeeming rewards goes far beyond the monetary value they receive,” he said. “Our loyalty program today focuses on forming stronger, more meaningful connections with our customers, incentivizing them to engage in the brand and keep coming back.”

Torrid offers multiple channels, each with a different objective. Its rebates and incentives approach appears to have worked so far, judging by the number of customers who have taken advantage of it.

“On our Q4 earnings call, we shared that our loyalty program has grown to 3.5 million members, representing 95% of our customers today and continuing to grow as we introduce and test new features to further personalize the program,” Cotter said.

Loyalty incentives only work if customers are pleased with how they are distributed, however. It is crucial for retailers to meet customers where they are, which is increasingly online.

Digitizing Rebates and Incentives

Customers conduct their shopping in various channels, and they want their incentives available through the same channels. Online avenues have quickly become the most popular, so digital incentives make the most sense for many retailers to offer.

“We’re looking for an omnichannel experience across eCommerce, mobile and our stores: offering multiple payment options, rolling out our ‘buy online, pickup in-store’ services, and launching a mobile app that allows customers to conveniently manage their rewards and payment options all in one place,” said Cotter. “We’ve seen more frequent engagement, larger purchases and higher overall long-term value.”

Shifting to online incentive channels also provides retailers valuable data about when and how customers leverage said incentives. Torrid uses the data gained through this digitization to help drive customer loyalty and conversion.

“Our digital rewards have been a valuable asset in how they support our strategic communications,” Cotter said. “We have connected our loyalty program with more personalized messages, allowing us to better inform our members of key moments throughout their rewards journey and highlighting the next steps they can take to continue gaining value from the program. Through continuous A/B testing, we have refined everything from our copy to our creative to maximize the impact of our digital rewards.”

This multi-pronged approach is likely the most effective way to make the most out of rebates and other rewards. Digital will need to be a key part of that approach for retailers to have the most effective strategy.