Analysis of a Millennial Loyalty Program with AEO Connected

by Sean Ogino |

In the turbulent times when many retailers are finding it hard to stay relevant and profitable, American Eagle Outfitters (AEO), a leading retailer known for on-trend clothing, has grown significantly. In the last quarter of last year, it delivered record revenue and 2% growth in comparable sales. The retailer is looking ahead to continue this growth with the launch of their new millennial loyalty program, AEO Connected.

AEO Connected is replacing American Eagle’s previous loyalty program, AERewards. The retailer automatically enrolled its 16 million prior members into its new digitally focused loyalty program and all American Eagle and Aerie credit card holders who have an email address associated with their accounts are also automatically enrolled.

AEO has tagged their new millennial loyalty program as “Not Your Average Rewards Program” in their latest blog on the topic. And while it certainly has elements that set it apart from some competition, it seems to have a lot of room for growth. The brand’s primary customer base is made up of millennials, and its new loyalty program is aimed at making it easy and exciting for them to participate. It is a digitally focused program with seamless app integration. Customers can download the Aerie Mobile App and track their points, scan their loyalty card to earn rewards, and redeem their rewards in store. According to American Eagle, “No forms to fill out, no wasted paper, just Rewards sent straight to your email.”

The rewards structure for this millennial loyalty program is straightforward. There are two membership tiers, customers earn points for every dollar spent, and collect $10 or $15 in rewards for every 2,500 points depending on the tier they are in. There are also some “buy and get” rewards built into the program designed to focus on AEO’s core products, including a buy 5 pairs of jeans get 1 free deal. Customers can also expect to get free shipping and a special birthday gift.

According to American Eagle’s press release, exclusive member access to concerts, festivals, and special events will also be a feature of AEO Connected. This is another core element that appeals to their millennial customer base. A recent study by Neilson shows that millennials rate non-monetary rewards higher than Boomers do.15% of Millennials want higher priority service, 12% want recognition as a valued customer, and 12% want personalized products or services.

Its loyalty program isn’t the only way American Eagle is trying to connect and relate with its millennial audience. Starting in 2016, the brand has had two seasons of a successful #WeAllCan campaign featuring an empowering tagline, “You Can Too.” At its launch, AEO said the aim of the campaign was to give young America a platform to express themselves” and “share with the world what they can do”. The campaign focused on bringing together young people from different walks of life and giving them a chance to share their own personal stories of empowerment and strength through a series of “CANdid videos,” along with inviting viewers to share their own stories. The campaign roped in budding stars like Justice Smith, Jacob Whitesides, and Zella Day who are popular among teenagers and millennials.

American Eagle has achieved a sense of authenticity that is hard to come by. It knows its young audience and is constantly looking for opportunities to connect with them. This may explain why it has fared better than some of its casual apparel competitors of the early 2000’s such as Abercrombie & Fitch, Hollister, and Aeropostale. But, as mentioned before, its new millennial loyalty program has some room for growth. It will need to find a good cadence for offering customers special offers and reminders about the opportunity for loyalty rewards. Given its focus on a young age group, it should build loyalty campaigns into its seasonal calendar with special back to school offers and the unique rewards around the holidays. Rewards are also a great opportunity to strengthen the program. It currently is designed to only offer monetary rewards, but exclusive brand-centric gifts or meet and greets with its influencer base could go a long way in engaging customers in the program. AEO Connected will need to find a good balance of keeping itself in the mind of its customers without pestering them and constantly test how their rewards and offers resonate if they want to continue to stay ahead.

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