Reinventing The Retail Card

In a recent Business of Fashion article Luxury’s Generation Gap, Limei Hoang offers, “millennials will account for 45 percent of the luxury market by 2025, but their values and spending habits are at odds with the business models of many traditional brands.” Millennials are hard to impress and they will remain uninspired unless the brand experience is an immersive one. They worship brands that are transparent, authentic, and participate in the communities where they do business in. In other words, they are loyal to brands that show a high level of engagement. What is so perplexing is that there is not one luxury department store that is responding to this insight, and this remains the reason for their slow demise.  

When we talk about customer engagement, we are talking about the same level of engagement you would expect from your best friends, given that, “like human relationships, customer engagement is the culmination of ongoing interactions and experiences with the brand." A brand needs to make sure that the interactions and experiences between the brand and millennials are meaningful enough to leave a lasting memory on their psyche. Research by SapientRazorfish outlines five key drivers to deepen customer engagement: empathy, personalization, accessibility, value, and consistency/cohesiveness. Blake Park explores these in depth in Know your Millennials. Really know them. Because conventional wisdom can mislead.

Among all luxury department stores, there is a product being offered that could ignite all the aforementioned drivers and that is being foolishly unexploited to its full potential. Enter the retail card,  luxury stores’ biggest missed opportunity, and their last ray of hope, to improve the luxury experience for millennials.

Have you heard of our rewards program?

Call them loyalists, influencers, or segment them by levels, circles, or even precious stones or metals; every luxury store offers a credit card and they all want you to have one. Not only do they avoid the transaction fee; but they also reap the benefits of interest or potential late fees, and according to intra-industry reasoning—customers with retail cards spend more. But like many other financial instruments, none of them differ very much from each other.

Beyond this, as far as millennials are concerned, these cards are just another financial instrument unworthy of their trust. Having grown up in the midst of the worst financial crisis since the depression, millennials’ distrust for the financial industry is at an all time high. As Scratch’s Millennial Disruption Index offers, the banking industry runs the highest risk for disruption. This notion triggers down to retail cards, because none of them are different. And yet these cards hold the power to solve all of luxury’s problems. They have the potential of checking off all the mentioned benchmarks and like travel metal cards, they  have the potential of becoming the latest status symbol.

What’s in your wallet?

What is it that is implied when a client drops their Centurion, Platinum, or Sapphire Reserve card? Perhaps that you have an exceptional credit score, that you spend enough to outweigh the annual fee, that you can afford the annual fee, that you have enough money to meet the signup bonus, and perhaps that you have the time and money to utilize the perks that come with the card. Perhaps, because of these cards, others perceive you as cultured, wealthy, or at least as someone who has been responsible with their money. These cards also say that one has access that others don’t, whether this be access to places, things, or knowledge.


Luxury retail cards need to achieve these perceptions while ensuring that they are enriching client engagement. They have to say “I have access to a plethora of exceptional luxury. My card can get me into ‘so and so’ luxury department store.”

Any place with the perception of exclusivity—from the Delta Sky Club to the Soho House—requires a membership. So luxury department stores must switch their ‘come one, come all’ mentality, and only allow entrance and access to all the perks the store offers to cardholders. To countervail any loss of clients who may not want to open a card or can't because they are a tourist, stores should offer a day pass. Should the client buy anything that day, the entrance fee can be applied to their purchase.

The Perks

Now let’s talk about the perks that these card should provide, and that will allow them to meet the engagement benchmarks for millennials.

Empathy: According to Blake Park brands need to be empathetic to millennials’ need for flexibility when it comes to earning and redeeming points. However, as I point out in Dethroning the Client, it is also imperative that brands demand a level of commitment from their clients. As such, a loyalty program should become more flexible the more the client spends. As previously noted, customer engagement works like human relationships. You wouldn’t forgive a stranger for being late to an appointment, however, you would be flexible for your best friend’s mishaps and perhaps reschedule with pleasure. A loyalty program should reward you more and more as you spend, and there should be multiple tiers that a client can strive toward. This allows a brand to target a large audience, while maintaining its image of luxury. As you spend more, not only should you earn more, but your perks should also accrue. These perks should be relevant and meaningful. For example, your shipping preference should be upgraded, your purchase protection such as alterations and repairs should change, and how soon you can start enjoying your rewards should also change.

This level of flexibility in earning and redeeming points is the reason why the Chase Sapphire Reserve card has seen major success, while “American Express cards in use declined by almost 18 percent, according to industry analysts.” The Chase Sapphire Reserve allows you to earn points under its travel and dining categories in various ways. Under its travel category, one can earn points by using the card for airfare, taxis, subway, and transportation companies like Lyft or Uber. One can also use the  $300 travel credit on any travel expense. The American Express Platinum card, on the other hand, will only allow you to earn points on airfare, forces you to use its $200 Uber credit in $15 increments per month, and will only allow you to use your $200 travel credit for qualifying incidental purchases. Unlike the Amex Platinum card, the perfect luxury retail card must be empathetic to the needs of the consumer, while remaining in control of the luxury experience.

Personalization: There is nothing as upsetting as a rewards program that treats everyone the same. It makes you feel like the brand is not doing their due diligence and learning about your habits and what makes you tick. The reality, however, is that every loyalty program does just this. As offered in Dethroning the Client, when discussing how to properly stage breathtaking experiences and transformations, brands need to “transcend expectations, to go off in new (and unexpected) directions entirely.”

Instead of offering gift cards, notes, or in store cash to shop again, luxury department stores must use these funds to create remarkable experiences for their patrons. As Ajay Kelkar offers in How Banks are Missing the “millenials” Mark?, “research from Facebook IQ has shown that Millennials tend to show off not through the ownership of things, but through experiences.” These experiences can be meaningful no matter how much the client has spent—from a diner to their favorite restaurant or tickets to their favorite artist’s concert, to tailor-made travel journeys to exotic destinations. These experiences will keep clients coming for more; and as a brand you will benefit from invaluable exposure that is sure to arise through organic advertising.

Ensuring excellence from this strategy, however, requires a team that is dedicated to continuously touching  base with sales people, gather insights on clients, and create fabulous experiences. It also requires a state of the art mobile app.

Accessibility: When in regards to the accessibility driver, Park is concerned with the ease with which a client can interact with the brand across various platforms—whether in digital or in store, and the transparency a brand exemplifies in terms of collecting and using client data. As noted, millennials hold high distrust for the financial industry; so as financial instruments, luxury retail cards should always put forward the highest regard for transparency. As for the ease in interacting with a brand, luxury department stores need to use the retail card as a client’s access pass to interacting with the brand in order to demonstrate and foster high levels of engagement.

Think about your best friends. You probably are friends on Facebook, you follow them on Instagram, and are connected on LinkedIn (even if you don’t work in the same industry). You like all of their posts, photos, and stories. However,  what's most important is that if you wanted to reach them, you could do so on various platforms. Personally, I prefer to text or call my friends. How do we take this ease and accessibility and implement it to a rewards program? The ultimate luxury retail card must give you access to its mobile app, access that non-cardholders would have to pay for (because yes, it should be that good). What would this app do for the client?

There are a couple of apps that I rely on. Among them,  Susan Miller’s Astrology Zone (if you don’t have it, get it, it’s the best) and the financial app MINT. However the most important app in my phone is the Equinox app.  It may sometimes seem like I am working undercover for the brand because I write about it all the time, but in all reality I can’t live without it. Not only do they make my life easy, they’ve helped me transform myself. And this should be the ultimate goal for a luxury department store. The Equinox App allows me to search classes and export them to my calendar, and helps me track these classes and see my workout results. It also let’s me know what clubs are near me and what classes are coming up. It informs me about  promotions that are available to me at The Spa, new merchandise available at The Shop, and it shares upcoming events. It also previews articles that are available on Equinox’s online magazine, Furthermore. Foremost however, is that the app allows me to ‘favorite’ classes, instructors, and clubs. So let’s say I had to leave work later than expected and because of this I missed a class; I can open the app and filter out my favorite classes, instructors, or clubs, or all together, and see what workouts  are available to me.


A retail luxury card should offer an app that does just this, but goes even further. Imagine an app that works a little like Facebook, a client should be able to request and favorite a salesperson. This would allow them to see when their favorite salespeople are in the store, and set up an appointment with them, or just message them if they have a question. They would also have access to a salesperson’s shares from pictures of new merchandise, to their thoughts on the the latest runway shows or an article about the industry they found interesting, and the associate would be able to invite them to events or trunk shows. A client can share pictures of how they are wearing their latest pieces, or perhaps ask for recommendations should they be looking for something special.

From the salesperson’s point of view—if the client has favorited them—the salesperson would have access to merchandise they were looking at, and liked, and they could comment on it. They would have access to their purchase history, to know how to build their wardrobe, and know when the client is in the store. A sales person would also be able to add insights they are gathering through their interactions with the client, so that the ‘Rewards Team’ can strategize the next experience that will “wow” that client. As Park notes, “with greater insight into current and future needs, and the ability to meet those needs in the most relevant way, brands have the opportunity to build longer-lasting, ever-deeper relationships.”


Value: Park believes that there are two ways that will enhance the value exchange driver between brand and clients. The first is providing clients with incentive to share their benefits on social platforms such as Instagram. The other is fulfilling their desire to be heard by the company.

While these two practices are important to implement, they are given when it comes to a luxury retail card. To truly ignite this driver, luxury department stores need to go above and beyond, surprise and delight, and transform clients. In Dethroning the Client and The Untapped Power of Luxury I explore some of the sources of value exchange that would strike a chord with the behavior and values of millennials. These two sources of value are altruism and knowledge value.

Altruism is an emotional need that millennials so fervently seek to satisfy. Nothing reaffirms their shopping behavior more than feeling like they are serving a purpose and having a positive impact on society. A luxury retail card can achieve this by ensuring that a certain percentage of membership fees collected are allocated to supporting a cause. However, not just any cause will foster the authenticity that millennials expect, in establishing legitimacy for stronger client engagement. Any cause you take on has to be authentic and reinforce the brand’s promise. As Jasmine Bina offers in her Business of Fashion Op-Ed, What You Don’t Know About American Millennials, doing the right thing “means doing it before it’s expected of you. It also means doing it because it means something to you, not because you think someone is watching. If your initiative doesn’t tie into your brand story, you’re potentially opening yourself up to a world of scrutiny and backlash.”

An example of such a cause is the CFDA Vogue Fashion Fund, whose mission is “to cultivate the next generation of emerging [of] American design talent.” Another example could be to partner with Parsons School of Design and fund their end of the year fashion show, which showcases the best work of the entire graduating class. Not only is this a good cause, but it would provide a luxury retailer with leverage in picking up the next generation of designers to host in its store.

Knowledge Value is the economic offering resulting from accumulated wisdom. Having become of age during the information age, millennials have felt the impact this revolution has had on the paradigm of consumerism. It is no longer just enough that you look good in your clothes. Your clothes announce to the world that you are  ‘in the know’ by having access to the best information and knowledge that money can buy. What millennials put on their back is “an extension of themselves or a conversation piece.” This conversation can be about how they learned about the designer, or about where they were when they picked up the piece.

Access to a place where they can gain this knowledge is exactly the value that millennials expect from a luxury retail card. Luxury department stores—if staffed with talented individuals with a true acumen for luxury—can ensure that millennials find value by offering them with various sources of knowledge to remain ‘in the know’. From an interaction with a salesperson, to workshops (of the like of the Apple Store), to a magalog, all of these are just a small sample of the perks that must accompany a luxury retail card to foster high client engagement.


Consistency and cohesiveness: Key in a luxury retail card delivering high engagement to millennials is ensuring that they are indeed loyal to the brand and not the loyalty program. This means that any additional perks that are available through the membership of a luxury retail card, must reinforce the brand’s essence. These will obviously vary brand to brand. A lucrative business opportunity for luxury department stores—especially those in high tourist cities—could be to partner with companies such as Delta Airlines or American Express to create in store lounges like The Centurion Lounge. Lounges could also be an opportunity for Chase, or the top echelon of fitness and wellness Equinox.



Other perks that would remain consistent with the brand promise could be:

-Membership to the Business of Fashion Professional,

-Access to the stores’ magalog,

-Priority access to ‘waitlist’ items, and

-Events where clients can meet and interact with the designers and store executives.

The values of millennials are indeed at odds with the “exclusivity” ideology of luxury powerhouses. This is not to say that millennials are not aspirational or that they don’t want beautiful things. That Instagram post from your trip to Mykonos shows us that snobbery is alive and well. However, it is no longer enough to just look good, and in the eyes of millennials, this is all a luxury department store has to offer. Millennials are looking for continuous self growth, and they will invest their money on brands that will support them in doing so, while also showing high engagement. Reinventing the retail card can help luxury department stores achieve just that.