URBN, parent company of Urban Outfitters, began testing a paid membership in February called UP.
In the same vein as lululemon and RH (Restoration Hardware), URBN charges an annual fee to join the program. Membership provides benefits across its entire portfolio of brands, which include Urban Outfitters, Anthropologie, Free People, BHLDN, Terrain, Menus & Venues, and Nuuly.
“We believe the ability to access benefits at all Urban brands for the price of one membership fee offers a key differentiator for our program,” CEO Richard Hayne said during the company’s earnings call.
The pilot seeks to drive increased frequency, capture a greater share of wallet, improve retention, provide opportunities for greater cross-brand exposure and selling, and attract new customers, he noted.
The retailer already has a free three-tiered loyalty program in place, UO Rewards. Members earn exclusive discounts, offers, access to giveaways and more. The program gives a $5 reward for every 100 points shoppers earn and points can be earned for signing up, shopping, writing product reviews and visiting the UO site or app.
The new UP program test launched in just Dallas and Atlanta at two price points for membership: $48 and $98. Once someone signs up, they will get a gift card. Both programs include free shipping and free returns on all orders, as well as 15% off all orders. The higher price point adds a monthly $10 coupon and a discount on Nuuly, the company’s clothing rental subscription service.
The goal of the test launch, which will run for six to 12 months depending on the rate of sign-ups and the speed of learnings, is to “understand the degree to which customers are intrigued by these offerings” and “measure over time how customers respond and if their behavior changes based on becoming a member,” said CTO Dave Hayne.
URBN said for the year ended January 31, 2021, net sales decreased 13% over the same period last year. Comparable sales decreased 11%, driven by store closures as a result of the coronavirus pandemic and lower store productivity once stores opened. This was partially offset by double-digit growth in digital channel sales. Total digital customers grew by about 50% for the year for all brands, Hayne said.
“Our goal is to retain them and what we're doing to do that is sending out personalized messages and continuing to advertise in the social media influencer areas that probably first attracted them to digital,” said noted.