The Vitamin Shoppe Focuses on Loyalty in Turnaround Quest
In early July 2018, The Vitamin Shoppe (a major vitamins, minerals, and supplements (VMS) retailer) posted a press release that highlighted plans for testing out a revamped loyalty program. According to the document,
the Vitamin Shoppe has selected 105 of its stores across the country as well as 960,000 customers to experience the new Healthy Awards® before it officially launches in 2019. The six-month testing phase will allow the company to gather customer feedback on the redesign, while continuing to make further enhancements to the program.
Well…six months turned into nine because of turnover to the senior leadership in the department, but The Vitamin Shoppe finally released the expanded version of its Healthy Awards loyalty program to all customers.
Will these changes to the loyalty program make a material difference in the turnaround quest of The Vitamin Shoppe?
New Healthy Awards Features
The new Healthy Awards program is made up of three levels; Bronze, Silver, and Gold. This new tiered-approach allows customers to earn awards up to 50% faster as they advance in level that are associated with annual spending levels.
Compared to the last program, this creates a bit more “gamification” to the program. If you aren’t familiar with this idea of taking game principles in non-game contexts, start to look around…elements are likely around you more than you realize.
Outside of earning bonuses, each Healthy Rewards tier unlocks more features. These features could include things like providing access to in-store wellness coaches, a birthday surprise, seek peaks at sales/events, and bonus points promotions.
Top 5 Reasons Why I Like the Changes
To make a material difference in the turnaround quest, the features in this new Healthy Rewards program needs to be aggressive, on-trend, but meaningful to the customer.
- Flexibility = “Choose your Own Sale” days might seem small, but even the biggest internet retailer Amazon has added this type of feature in the last year. Additionally, members of the program can choose when to redeem awards and those points do not expire. After making a purchase and earning points, they are given the option to have awards issued automatically or accumulate points for a larger award. That optionality helps create a further gamification element (especially if exclusive and constantly changing rewards emerge…)
- Inclusiveness = they are launching a Healthy Awards Insiders Facebook group, which should help them with adding value to the “intent driven” VMS CPG products they sell. These products have always and will always need an element of education for consumers to get the most out of them…
- Private Label = both silver and gold-level members get early access, exclusive offers, and savings on The Vitamin Shoppe’s private label brands. It is no secret that The Vitamin Shoppe is focusing on private label expansion in 2019 (watch this if interested…) and any help at getting their loyalty members into that exclusive product experience will create immense benefits for the VMS retailer.
- “Autopilot” Sales = one of the more “unassuming” features is that loyalty customers receive 10% off their purchases when they subscribe to The Vitamin Shoppe’s auto delivery program. The SPARK program has been a cornerstone of The Vitamin Shoppe’s digital sales focus. The subscription model has and will continue to be a great driver of reoccurring revenue for CPG brands and retailers.
- Virtual “Value-Add” = this reason is mostly around the creativity to save on a possible SG&A cost nightmare. Instead of having the personalized plan consultations with certified nutritionists being in-store, which could severely bloat store-level labor costs and likely restrict availability to select hours, thus creating a negative cost:benefit, Vitamin Shoppe will offer the specialized perk virtual-only.
Will This Work?!?
I believe too often businesses forget that there is only one boss and that is the customer. The customer can fire everybody in the company simply by spending their money somewhere else. The Vitamin Shoppe forgot who their boss was…
New CEO Sharon Leite seems to realize that her job security and legacy is 100% tied to the customer. According to Ms. Leite,
“The customer relationship is the cornerstone of The Vitamin Shoppe’s reinvention. With over 90 percent of the company’s sales coming from Healthy Awards members, we are delighted to launch our new loyalty program as the first step in having a much more meaningful relationship with our customers.”
You want to attack the turnaround plan…90% is riding on the loyalty of your customers Vitamin Shoppe!
