Gap Inc. Deepens Connection To Consumers With New Loyalty Program
Gap GPS Inc. has announced a new integrated rewards program where credit card holders and loyalty members can earn points while shopping online or in store at Gap, Banana Republic, Old Navy and Athleta. The new program will simplify and streamline the way members earn and redeem rewards by combining the previous credit card and loyalty programs under Navyist Rewards, Gap Good Rewards, Banana Republic Rewards, and Athleta Rewards.
The new program, One Membership. Four Brands., will make it easier for cardmembers and rewards members to earn points, enable them to redeem their rewards faster and create opportunities to give back by donating to one of five charitable funds. Rewards members will receive special perks, bonuses, and exclusive brand benefits upon joining. Regardless of how much they spend or which brand they enroll with, their points will be held in one place.
“Instead of having 500 point thresholds, consumers can redeem at any time with 100 point increments,” said John Strain, chief customer, digital technology officer at Gap Inc. “We’re finding a way to turn customers into lifelong loyalists and personalize those experiences to just make it easier.”
Since relaunching the program in September, Gap has signed 19 million new members, Strain said. Overall, there’s 37 million members between the multi-tender loyalty program and Gap credit card. “It’s a pretty good start,” he said. “There’s an easy enroll feature we just launched online and in stores as a way to continue to drive membership and membership penetration.”
Gap Inc. first quarter online sales grew 82% versus the first quarter of 2019 and represented 40% of the total business. Store sales declined 16% versus the first quarter of 2019, primarily due to strategic closures and COVID-closures outside of the U.S. The retailer swung to a profit of $166 million, or 43 cents per share, from a loss of $932 million, or $2.51 per share, in the 2020 first quarter.
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Gap spent time with customers as it built out the new program, relying on feedback and testing with consumers multiple features of the new rewards plan. The retailer wants to create connections that are emotional and not simply transactional, and consulted customers on every aspect of the program, including program names and names of reward tiers.
“We found that customers prefer program benefits that are value-based and extend across brands,” Strain said, adding that card holders receive five points per dollar spent, and loyalty members, one point for every dollar. “One point per dollar is easier to understand and more streamlined,” he said. “Consumers wanted a choice on where to redeem points, which they can do through any brand and any channel.”
The new program has published membership tier levels based on annual spend. The first tier, called Core, is free to join with zero to $500 spend per year. It offers double rewards redemption days, bonus points for quarterly cross-brand purchases, a birthday surprise, and free three- to five-day shipping on orders of more than $50. There’s also exclusive offers for Core members.
Two other tiers, Enthusiast and Icon, offer their own perks. All cardmembers start at the Enthusiast level and include the Core benefits. Enthusiasts also receive free three to five day shipping on orders over $50, while Icon members receive qualify for free two to three day shipping on orders of $50-plus.
A key feature of the program is the Do Good component, which gives customers the ability to give back by donating their points to one of five funds that support the brands’ and company’s core values.
“As we’re talking to our younger demographic, Millennials expressed a connection based on their values,” Strain said. “It’s part of who we are. We talk about Inclusive by Design as a company and this connects with the overall theme. Do Good is a big part of the value proposition.”
The charitable funds include Imagine Mission Fund for Old Navy, which works to create new job opportunities for youth, eliminate plastic waste, and provide art programming for kids in partnership with nonprofits such as Boys & Girls Clubs.
Gap supports DoSomething.org, which encourages young people to make positive change locally and globally through campaigns that make an impact. Banana Republic’s BR x World Wildlife Fund conserves wildlife and protect places to build a future where people live in harmony with nature.
Athleta’s Power of She Fund is part of the brand’s mission to ignite the limitless potential of women and girls with grant programs that fuel confidence through movement and connection in partnership with the Women’s Sports Foundation.
Gap Inc. supports the Equal Justice Initiative, which is committed to ending mass incarceration and excessive punishment in the United States, challenging racial and economic injustice, and protecting basic human rights for the most vulnerable people in American society.
“This is part of getting to know our customers better and getting them to engage more deeply,” Strain said. “The overall architecture of our rewards program is a great embodiment of how we’re pursuing that.”