Apparel and accessory retailers who are looking for new ways to pump up sales might want to check out J. Crew’s recurring revenue strategy. Lisa Boosin, writing for Racked LA, recently noted that the retailer has been using an “item-of-the-month” club program to increase loyalty and revenues for at least a couple of years. This approach has long been successful for other industries such as fruit, flowers and books.
Can it be applied to fashion and accessories? Boosin believes J. Crew’s program is successful. The company primarily markets the program through its catalog which appeals to loyal clients. Through the program, customers can sign up to receive a specific type of product. For example, shoes of the month or tie of the month.
While this strategy will definitely appeal to brand devotees, marketers could explore other ways to expand a recurring revenue stream program. For example, effective promotion could include employing email marketing campaigns to reach a geographically diverse group of clients. This type of program could target gift givers who want to send items to different recipients such as friends or family members from month to month. These programs could also be designed to target businesses that want to reward high achievers each month.
A little creativity applied to a recurring revenue program could help vendors make efficient use of marketing expenditures and increase revenues in unique ways. This strategy could become popular in the competitive retail environment expected in 2010.[Source: Boosin, Lisa. The Gift That Keeps on Giving, LA Racked, 11.24.09]