Gap Inc. on Tuesday unveiled a loyalty program that brings not only simplicity and a new identity, but also opportunities for meaningful connections to its customers. The update, “Encore,” applies to all the apparel company’s brands and arrives at a time when it is working on improvements across its portfolio.
That includes a crusade to regain cultural cachet, especially at its once-iconic namesake.
“Fashion is entertainment, and today's customers aren't just buying apparel, they're buying into brands that shape culture and tell compelling stories," Gap Inc. CEO Richard Dickson said in a statement. "Encore connects our brands and partnerships in new ways to meet that demand and change how customers engage with our brands. By bringing fashion, entertainment and access together, we are building momentum, deepening relationships and creating long-term value across our portfolio."
A fashion company like Gap Inc. needs a loyalty program to accomplish those things, and it’s no simple task, experts say.
What’s new
At a basic level, Encore is designed like many loyalty programs, with incentives to shop at Gap Inc.'s brands and, ultimately, sign up for the Gap Inc. store credit card.
The core membership, open to anyone, provides five points for every $1 spent, free shipping on orders above $50 and a birthday bonus. Points can eventually be applied to purchases, including “exclusive products, offers, and experiences in the Encore Market.” That market is “a rotating mix of members-only offerings from Gap Inc. brands and partners,” some unavailable elsewhere. That includes not just products but also experiences, including a chance to visit designer Zac Posen’s New York Studio. Posen is Gap Inc.’s creative director and chief creative officer of Old Navy. Loyalty members can also donate their rewards to charitable organizations.
The next tier requires a $350 annual spend at Gap Inc. brands. In addition to the benefits of the core program, members of this “premier” level can create their own sale day, where they get 15% off their purchases; a birthday bonus for themselves and a family member; and an extended return window.
Finally, “All Access” members – who must have the Encore credit card – get 25 points for every $1 spent at Gap Inc. brands; 15 points per $1 spent at partner apparel brands; free shipping on purchases over $35, plus other perks, including all premier benefits.
Beyond purchases
But Encore is not just about making purchases. Its exclusive offers, drops and experiences reflect an admirable effort to forge relationships with customers that are more than transactional, according to Barbara Kahn, a professor of marketing at The Wharton School.
“For the consumers, it’s a win, because meaningful moments are valuable both socially and materially, but for the brand, it creates loyalty that goes beyond just the next purchase at the store,” Kahn said by email.
This is coming at a good time for Gap – especially its namesake brand – because its marketing has resonated with people lately. The brand, which lost its place in the zeitgeist several years ago, has struck a chord with its “Better in Denim” campaign featuring Katseye and work with Harlem’s Fashion Row.
Aside from ongoing declines at the company’s Athleta athleisure brand, Gap Inc. has notched gains at Old Navy, Gap and Banana Republic and in November raised its outlook despite pressure from tariffs.
"This is an opportunity to build on ... goodwill and cultural relevance to create lasting relationships."
Barbara Kahn
Professor of Marketing, The Wharton School
“Gap has recently been doing well with its customers; it's struck the right notes, and this is an opportunity to build on that goodwill and cultural relevance to create lasting relationships,” Kahn said. “If they can tap into the right cultural moments, and make them exclusive and special for their customers, they should be creating strong brand loyalty.”
The company has beefed up its leadership ranks in its effort to meet that challenge. Former Paramount executive Pam Kaufman arrived early this month to build and scale Gap Inc.’s entertainment, content and licensing platform. In a statement, she called the Encore program “a powerful new tool to bring our Fashiontainment platform to life."
"Through partners like Disney, NBCUniversal and AMC Theatres, we can translate what people love on screens and stages into experiences they can actually access – from early drops and exclusives to cultural moments you can't get anywhere else,” she said. “It's a new way to participate in entertainment through style, and to feel closer to our brands."
The challenge is real
For Encore to succeed, though, Gap must pay attention to the customers themselves, and not just Gap Inc. executives’ or brands’ idea of what is relevant, according to Kahn.
“It does mean that they have to constantly be listening to their customers and making sure they engage with them in the right ways,” she said. “It definitely goes way beyond mere celebrity endorsements or cute advertising. The goal is to create community, a lifestyle.”
This is a must, but a taller order than many brands realize, according to Frankie Margotta, associate strategy director at brand transformation company Triptk.
"Truly building loyalty is different than perks."
Frankie Margotta
Associate Strategy Director, Triptk
Consumers are tired of having to sign up and hand over their private information for yet another loyalty program. They may take advantage of discounts or free items, especially at companies they already frequent, but that doesn’t build loyalty, he said by phone.
“There's a fatigue and even a stigmatization – and probably a bit of apprehension – around loyalty programs in general. So truly building loyalty is different than perks,” he said. “Consumers are very willing to invest their time and energy, especially young consumers, into programs and people and spaces they believe in, but they demand a reason and they want to be invested.”
Gap’s partnership with AMC, for example, should go beyond free tickets to movies and link to a particular movie or place that makes sense for the brand and its customers. In fashion, that depth extends to collaborations with other apparel brands, Margotta said.
“Consumers now, especially young consumers, are not going to be head-to-toe one brand. They're very dimensional, they're extremely diverse, they're multicultural, they're not one thing,” he said, adding that Gap’s brands should carve out areas, like “bags” or “denim” that are ripe for making outside connections. “Ecosystems and partnerships and a bit more collaboration – versus locking people out or only into your program – are probably going to be important. How easily does this program integrate into other things that I'm interested in and care about?”
Gap should also find a way to recognize customers that have stuck with its brands before the loyalty revamp, or who show up for the brand in stores or other ways, Margotta said.
“In an age when you can create anything through AI, tools have been democratized, things live forever on the internet, we have a lot of ‘rinse and repeat.’ How do you commemorate someone's time and energy in a moment?” he said. “I think that's something that people are probably craving, especially as they try to find their place and their unique kind of identity in a world that is rapidly changing. How do you help them get there, and how does your program – and building that loyalty with your brand – feed into the idea of who they are, and the lifestyle that they lead?”
