Shopping has changed dramatically in recent years. Many consumers now browse and buy products from their couches using phones, tablets, and laptops. Because fewer shoppers visit stores in person, Urban Outfitters has started researching new ways to increase customer loyalty and online engagement.
The New UP Membership Program
In February, Urban Outfitters launched a pilot version of its new paid UP membership program. The retailer plans to test the program for six to twelve months in Atlanta and Dallas.
The program includes two membership tiers priced at $48 and $98. To attract customers, the company offers several benefits, including:
- Free shipping and returns
- 15% off purchases
- A $10 monthly coupon
- Discounted access to the Nuuly clothing rental service
- Exclusive promotions and special events across Urban brands
The goal is to create one membership program that works across all Urban Outfitters brands while encouraging customers to shop more often.
Why Urban Outfitters Is Testing a Paid Program
Urban Outfitters hopes the membership program will increase customer spending and strengthen brand loyalty. Company research suggests that customers in paid loyalty programs often shop more frequently and spend more per purchase.
The retailer also wants to improve its online customer engagement. As eCommerce continues to grow, brands are searching for new ways to build lasting customer relationships.
Research Behind Paid Membership Programs
Survey data showed that members of paid loyalty programs are 60% more likely to spend more with a brand after subscribing. In comparison, free rewards programs influenced about 30% of customers to increase purchases.
These findings support Urban Outfitters’ strategy to expand its digital presence and improve customer retention through paid memberships.
Potential Challenges for the Retailer
Urban Outfitters is also using the program to learn more about its customer base. Executives hope the pilot will provide useful insight into shopping habits, demographics, and buying behavior.
However, the company may face challenges separating the UP membership from its existing UO Rewards program. Many shoppers already enjoy the free rewards program and may not want to pay for an upgraded membership.
What Happens Next?
The retailer plans to monitor customer feedback during the pilot program. Management stated that future earnings calls will include updates about the UP membership program and its performance.
The company’s main goal is to identify which customers are most interested in a paid retail membership. It also wants to learn whether the model can support long-term loyalty.
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