Australian retailer Cotton On Group has expanded a new loyalty program to the U.S., called Cotton On & Co. Perks, as it looks to double down on growth.
The program launched in November with a trial in New Zealand, followed by South Africa, Asia and Australia.
“What we learned very quickly was there was a really strong customer affinity for the program and it was giving us good customer data,” said Cotton On Group global general manager of e-commerce Brendan Sweeney. “So we took a strategy of then rolling it out very, very quickly.”
The company counts 1.5 million active customers on the Perks program who account for about 40 percent of all transactions.
Cotton On Group’s portfolio totals seven brands, including its namesake. There’s also Cotton On Kids, Cotton On Body, Rubi, Typo, Factorie and Supré. That variety in brands gives the company plenty of runway to uncover far better understanding of its customers across online, in-store and the divisions, Sweeney said. From a competitive standpoint, having multiple brands as opposed to one could also prove a greater incentive to join for consumers.
“We’re essentially building a community of people we can have a two-way conversation with,” Sweeney said.
The program is relatively straightforward. Earn 1 point for every dollar spent on anything, including sale items. The company wanted to improve on existing rewards program models in the market by making it as simple as possible and also eliminating pain points, such as any requirement to sign up for a credit card or charge an entry fee, Sweeney said.
“We’re really keen to make it accessible and easy to obtain,” he said. “We want customers to genuinely feel the value and for them to think about us first.”
The rollout to the U.S. market is an important one as the company moves toward its goal of doubling the business over the next three years across brick-and-mortar and online, the latter of which not surprisingly, is outpacing physical retail sales.
“We expect to see similar positive results that we’ve experienced in other markets,” said U.S. general manager Mark Pan of the rewards program’s rollout in America. “The simplicity and clarity of the program is something that we think is going to cut through really uniquely in America because it can tend to be a pretty crowded space because there’s lots of different loyalty programs.”
The Perks program adds to a stable of other tactics Cotton On Group’s rolled out in the U.S. to continue growing its customer base over the past year, Pan pointed out. That includes programs that let customers shop online and pick-up in store or have product shipped to their homes. Pan also confirmed Cotton on Group will continue to open stores in the U.S., with the company in talks with multiple landlords.
While still in early days with the rewards program, Cotton On Group has already started to learn more customer demographic information with differences in age and gender mix among its brands. For example, Singapore’s average age is roughly five years older than most other markets. South Africa is a couple of years younger. New Zealand, the market to have had the Perks program in effect the longest, has seen an increase in shopping frequency, cross-shopping among brands and average higher purchase prices with the company able to track those behaviors when used in conjunction with some credit card data.
The company is already moving swiftly to iterate on the model, with a plan to begin testing the addition of brands outside of the company in entertainment and beauty to broaden the assortment of deals. That testing is expected to begin in the next three to six months, likely with a similar plan of starting in New Zealand and then rolling out from there if successful, according to Sweeney.