Why Loyalty Programs Matter for Sports and Outdoor Retailers – and How to Implement Them

For many, sport is about points, goals & achievements. So are most loyalty programs. Does the combination of sporting fans' love of breaking records create a good starting point for successful loyalty schemes?

We looked into some of the world's best loyalty programs in Sports & Outdoor retailing and why people love them. Hopefully, you can find some inspiration in how to make YOUR program even better!

1. Dick's Sporting Goods' ScoreRewards

Until 2021, Dick's Sporting Goods "ScoreCard" Rewards Program was a fairly standard loyalty program. A tiered system allowed customers to earn points for every dollar they spent at the store. Even more points where up for grabs if you applied for (and paid with) the ScoreRewards MasterCard (issued by Synchrony Bank).

The game has changed in November 2021 when the company announced a digital partnership with Nike, meaning the customers of both mega-brands could link their loyalty accounts in Dick's mobile app. According to Dick's Sporting Goods CEO and president Lauren Hobart, the possibility to connect two otherwise separate loyalty programs aimed to bring their loyal customers even more rewards from both brands. They were no longer merely able to redeem products for points, customers could newly enjoy access to exclusive Nike products on Dick's website, or invitations to special events at Dick's locations around the country.

The move was quite surprising as Nike had previously openly admitted it focused its efforts on relying less on wholesale partners, trying to support its own sales channels. Even Nike's 2021 annual report confirmed the strategy as the share of wholesale revenue dropped from 65% to 61% year-on-year, while the revenue from its own stores and online sales picked up pace accordingly. Similarly, Dick's Sporting Goods invested heavily in its private-label brands, bringing in a revenue of $1.3 billion out of a total of $9.58 billion.

However, with loyalty innovation being the main focus for the Dick's (over 20 million Scorecard members accounted for over 70% of all company's transactions) and with Nike seeking new ways to connect with customers in today's increasingly digital and connected marketplace, the partnership made perfect sense.

So what's next? Dick's Sporting Goods' Senior Vice President Steve Miller revealed plans to focus largely on the personalization of its offers and shift away from traditional advertising to supporting digital communication in the coming years. Both for us, loyalty enthusiasts, and consumers, this should be exciting times!

2. Lids Locker Room's Access Pass

Lids is an established sports retailer with over 1000 locations across US, specialising in (no surprise) selling athletic headware, jerseys, t-shirts, hats and more from official major leagues & brands.

It all started back in 2017 in a bid to replace a stagnant earn and burn style LIDS Club rewards loyalty program. The largest licensed sports retailer in North America was looking for a more engaging rewards system with better communication channels.

As Jeff Pearson, senior VP of e-commerce and marketing mentioned, the idea of transitioning from a pure-discount system to creating lasting relationships with customers arose as the communication options of the old system were no longer sufficient. As the old loyalty program was regularly used only by a limited group of customers, the company had no other choice than to come up with something more sophisticated.

Enter the new Access Pass, designed to help with 3 key areas:

1. Better inform customers about their point balances
2. Allow Lids to share interesting content with customers (via the mobile app)
3. Promote its own social media channels to support even more brand engagement

In March 2017, Access Pass was introduced as a two-tier program, with free Access Pass and paid Access Pass Premium ($5 per year). Both tiers included a points-collecting mechanism: with the free tier a customer earns 5 points per dollar spent, the premium members get 10 points per dollar spent. Birthday gifts, notifications about limited edition releases and special offers were added to the mix.

In addition, the Access Pass Premium added instant discounts on every purchase, both in-store and online, and special deals such as "Buy one, get one half-price" on selected in-store items. Paid membership also gave its customers a chance to participate in sweepstakes to win extra rewards or even exclusive experiences at popular sporting events.

Though the official numbers weren't made public, the new model outperformed the old one almost immediately - within the first ten months of its existence, it gained more registrations than the previous program in its lifetime.

3. JD sport's Status

The multi-brand sportswear retailer founded in the UK has more than 900 stores across 21 countries worldwide. Different geographies have their own loyalty programs, mostly based on a two-tier system:

• General Admission - includes a free welcome gift, awards points for every dollar spent, and lets customers redeem points for rewards
• A-list status (in the US - a customer moves up once they collect 5,000 points)/Unlimited (in the UK - a customer gets all the benefits for £9.99 a year)

The higher tier promises a range of extra-special rewards ranging from free delivery, birthday treats, and exclusive content. However, what makes it attractive is the "money can't buy" rewards such as tickets to the coolest sporting games, access to member-only events, giveaways, and more.

To build more on the topic of exclusivity, the company perfectly understands that rewards do not always have to be physical and uses early access to hype launches such as limited edition Yeezy's or the latest Air Jordans.

4. REI Co-op's Membership

Both seasoned adventurers and occasional outdoor fun seekers may find REI the best place to get their gear. Founded in 1938 as a local outdoor co-op by a group of 20+ friends, the company has grown into a true community with over 20 million registered members all over the US. REI is famous for not only selling outdoor equipment, they prove their love for the Nature by investing over 70% of their annual profits back into the outdoor communities and outdoor-supporting nonprofits.

Their membership program had existed for years - a one-time $20 fee would grant a customer a lifetime membership with access to exclusive deals, garage sales, and member-only discounts such as 10% back (member dividend).

With community building in mind, the company decided to perk up its program in March 2022, when they introduced an upgraded version. The price increased to $30, however, so did the offered value. Now the members are enjoying free standard shipping on all US orders, access to used gear offerings, early access to curated products and limited-edition gear, opportunity to donate to The REI Cooperative Action Fund (in fact, $5 is donated by REI just by the purchase of each lifetime membership), free flat tire repair for bikes and machine wax for skis or boards, and more.

What makes the program truly special is its community-building and supporting aspect. With various outdoor-focused classes from climbing, to rafting or ziplining, day trips in the most picturesque locations, and longer adventures around the US. REI effectively connects all outdoor enthusiasts, making it a great example of a loyalty program creating an impact on the company, society, and all of its members. With over 21.5 million registered members as of 2022, REI has a bold plan of reaching a magical 50-million mark by 2030.

Summary

The examples above prove that getting a discount, cashback, or free products does not have to be the only incentive for customers to join a loyalty program. Though it's widely considered to be a norm, there's more and more customers who crave special treatment and experiences.

While getting free sneakers may provide a short-term satisfaction, imagine how many lasting memories a customer may create when being invited to a sneakers launch with Kanye himself. Of course, not everyone can afford a celebrity-filled event, however, building a strong community, or crafting other "money can't buy" perks like a free factory tour can be just as powerful.

Whether you are already well-ahead of the peloton, or just waiting for that "ready-set-go", there is always something you can always do to make your program better. Up for the challange? Talk to us!

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