Gap Inc. further streamlines loyalty across brands

Dive Brief:

Gap Inc. on Thursday unveiled a loyalty scheme that includes all four brands — Athleta, Banana Republic, Gap and Old Navy — and integrates its credit card rewards with its previous loyalty program. There are four tiers, with perks added as annual spend increases: core (zero to $500), enthusiast ($500 to $999) and icon (above $1000).
Cardholders have an advantage, earning five points for every $1, compared to one point for members without store cards, the company said in a press release. Points are redeemable in $1 or 100-point increments, down from the 500 points required previously.
The apparel conglomerate has enrolled more than 19 million new customers since relaunching its loyalty program last fall. All told, 37 million customers — rewards members and cardholders combined — have been migrated to the new setup announced Thursday.

Dive Insight:

Gap Inc. has been down this road for a while.

Its experimentation with cross-brand loyalty rewards dates from at least 2017 when it began testing a program that had flexible terms and included customers without store cards. The company later said that those customers spent more and more often. That was replaced with a revamp launched nationwide in September.

The latest program, which further blurs lines between cardholders and non-cardholders, makes it fairly easy even for the lowest-spending "core" members to get free shipping (with an order of at least $50). Since the start of the pandemic, 40% of consumers say they have higher expectations for free shipping, according to research from UPS-backed logistics company Ware2Go. Free shipping even beats curbside pickup, despite the latter's popularity in the last year, with more than half of consumers choosing curbside "out of immediate necessity" and 40% choosing it "if shipping was too expensive," that study found

This iteration of Gap Inc.'s loyalty program also includes what the company calls a "Do Good component," where members can donate points to one of five charitable efforts: Old Navy's youth-oriented Imagine Mission Fund; Gap's activist DoSomething.org, also aimed at young people; Banana Republic's Wildlife Fund affiliation; Athleta's Power of She Fund, in partnership with the Women's Sports Foundation; and, Gap Inc.'s Equal Justice Initiative. As part of the launch, the company says it will match up to $1 million in member donations.

The changes to Gap's loyalty approach mirror those at Target. In 2019 the mass merchant similarly integrated customers without store cards into its program, and established a way for loyalty members to vote on charitable contributions, often involving organizations local to a customer's community.