Shopping has become something to do in pajamas at home on the couch, connected to a phone or laptop. Because of the lack of in-person trips to a store, Urban Outfitters has decided to start research into a paid membership program. This February, the company developed a pilot UP membership program they plan on running for six to twelve months.
The New UP
There are two tiers of the program, one set for $48 and one for $98. Currently, the test programs began in Atlanta and Dallas. To draw in potential customers, UP includes free shipping and returns, a 15-percent discount on purchases, and a $10 coupon every month. It also has a discounted subscription to clothing rental service Nuuly and access to promotions and events among its store brands. The idea is to allow people to access the benefits at all Urban brands, for one membership.
The program hopes to bring in more customers. Research showcased that a paid program could encourage customers to buy more often, spend larger amounts at once, and focus on brand affinity. That can bring in more profit to the business, in addition to the costs of membership.
The Research
Survey information provided found that members of paid programs are 60 percent more likely to spend more on the brand once they’ve subscribed. Compared to free programs with only 30 percent that make brand purchases, the focus with the paid membership program is to expand the involvement of the online presence of the company.
The Result
Urban Outfitters is trying to set up an easier way to shop for customers. There is also a lack of data about their customers. As such, execs hope that the program could help give insight into their potential market. The need for information from various potential customers allows retail chains to focus their marketing and feedback on their current programs.
Moving forward, a potential problem for the retailer could be figuring out the difference between the UP program and its UO Rewards program. Many consumers enjoy the free benefits of the rewards program and may not want to pay for the membership program as a result.
And Lastly
Of course, the main goal is to discover what demographic is interested in a membership program. The company is looking to see more positive feedback for its pilot program. Management has stated they will provide updates on UP membership in future earnings calls.
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