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Jun 25, 2024 | 4 minute read

Loyalty in 2024: Growing Profitably vs. Growth at all Costs

written by Bryan House

In this high-inflation economy, many retailers are more interested in optimizing for profitability than growth. Nearly a quarter of loyalty program professionals have struggled balancing their margins with attractive enough discounts. Instead of the typical coupon or loyalty points system, many have turned to non-traditional ways to encourage loyalty, such as offering exclusive access to product drops or invite-only events.

Let’s look at some alternatives to points-based loyalty programs that can make your customers feel emotionally connected to your brand, while keeping your margins in check.

Optimizing for profitability while creating exclusivity

Many merchants, including children’s clothing brand Hanna Andersson’s and accessories company Claire’s, have implemented loyalty programs that offer customers early access to exclusive product drops. According to a piece from Modern Retail, these strategies have helped brands not only build brand affinity with customers, but also helped them plan more accurately for inventory. Early access helps merchandisers understand what product demand looks like, before ordering larger quantities of items.

Product drops in particular are proven loyalty drivers for younger customers — 72 percent of Gen Z and bridge millennial consumers who participated in product drops felt greater affinity for the brand with which they shopped, compared to 67% of customers overall. Flash sales and private sales also significantly drove brand affinity, for 57% and 63% of customers, respectively.

Exclusivity doesn’t only come in the form of product drops or limited runs. Exclusive brand collaborations are another way to encourage loyalty. Some collaborations come in the most unlikely and maybe bizarre places, and are built to generate buzz. Others are effective loyalty crossovers, bringing in customers from the other brand while solidifying loyalty among existing customers.

Making exclusivity programs work for you

Managing these types of profit-driving loyalty programs isn’t always easy using a legacy commerce system with a rigid product catalog. However, with composable product catalogs, you can easily create catalogs targeted toward loyal customers, without having to wait on custom development work. Using Elastic Path Product Experience Manager, you can:

  • Set up early access for products to pre-order
  • Provide speciality products and pricing for loyalty members
  • Limit access to loyalty customers via rules
  • And more.

If you aren’t sold on exactly which loyalty or discounting approach might work best for you, you can experiment with Elastic Path Composable Commerce and try our new promotions builder. Our suite of composable solutions can help you take advantage of promotion strategies like dynamic bundling and more, giving you even more ways to upsell and cross-sell to loyal customers.

Try Elastic Path today

Access a free Elastic Path trial today to see our leading composable commerce solution in action.

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