In this article, our friends at LoyaltyLion take a look at four industry benchmarks — as outlined in Nosto’s latest report on the state of fashion ecommerce — and share how focusing on customer loyalty and retention will help you improve your results.


While Amazon may dominate ecommerce market share, they’re yet to fully crack the fashion formula. Turns out, the retail giant only dominates 27% of the men’s UK fashion market and 16% of women’s. This creates a golden opportunity for fashion brands to take ownership of their sector before Amazon and the likes get their hands on it.

With worldwide revenue generated from fashion predicted to rise from $481.2 billion in 2018 to $712.9 billion by 2022, there’s clearly an active customer base ready and waiting for retailers to charm. But, while the size, pace and agility of the fashion industry present some exciting opportunities it also poses some risks.

The barriers to entry are getting lower and more and more fashion brands launching daily. Some reports even estimate that there are between 12-24 million ecommerce stores currently active. Not only that, but fast-fashion has made it difficult for brands to differentiate on the basis of their products alone. Customers have a mountain of choice to pick from, making it difficult for fashion brands to stand out.

This is why cultivating brand loyalty is now more important than ever. Customers are searching for brands that offer intangible benefits – such as an elevated customer experience – and that they can build one-to-one, personal relationships with. To help capture the opportunity, it’s important to look at your metrics and think of new ways to keep them upwardly trending. Here are four key metrics fashion ecommerce retailers can capitalize on with the help of a customer loyalty strategy.


1. Revenue per Visit: Engage Your Customers Beyond the First Purchase

Between Q1 and Q4 in 2018, fashion ecommerce merchants globally saw a 33% increase in average revenue per visit (RPV). And, unsurprisingly, Black Friday/Cyber Monday (or BFCM, for short) yielded the biggest seasonal spike. Fashion retailers need to think of clever ways to up-sell and cross-sell and keep that upwards momentum.

Be sure to keep engaging your customers beyond their first purchase and encourage them to ramp up their spending every time they return to your site. For example, fashion brand Pulse Boutique send their members point available update emails that remind customers they have points waiting for them in their account. This entices them to return to spend them on another purchase sooner. You could even use these emails to showcase other products related to the customer’s first purchase so they’re excited to add more to their cart.

By keeping the dialogue open, you’re ensuring that shoppers will return to your site more often, and purchase more while they’re there.


2. Average Basket Size: Expand the Value of Your Loyalty Program

According to Nosto’s report, customers, on average, add 2.45 items into their cart every purchase. Overall, the DACH region (Austria, Germany and Switzerland) held the title for the highest amount (4.4 items) relative to the rest of the world. For DACH retailers, a fuller basket means more cash passing through their registers.

Average basket size is an important metric for any retailer. It shows who are your most valuable customers so you can focus on growing the relationship you have with them. And, as acquisition costs are rising, exploring new options that encourage existing customers to spend more is a cost-effective way to increase your revenue long-term. Turns out that the average basket size of a customer who uses a loyalty reward in a purchase is 39% higher than those who don’t.

Encourage more of this positive behaviour by expanding the value of your loyalty program and rewarding customers for more than just purchases. Do this by including rewards for non-transactional activities – such as a follow on Instagram or site visits – within your loyalty program.

Cheap Undies, for example, automatically gift customers two points for visiting their site and five points for signing up to their program.

It’s a win-win. When your customers know how easy it is for them to earn rewards they can use to access their best-loved products, they’ll be happy to engage with your loyalty program to earn them. And, once they have more points in their account, they’ll add more to their cart to use them.


3. Conversion Rates: Create relationships with customers

Conversion rates are an incredibly valuable metric for fashion retailers. They show how much of your site traffic is arriving and completing a purchase. Globally, fashion retailers continue to steadily improve customer conversion rates, with a 21% increase over 2018.

Although the figures are promising, it can still be difficult to entice your customers to complete their purchase. All your efforts directing people to your site could be a waste if the customers you’re attracting are not converting. Instead, focus on building relationships with the customers you already have to encourage them to bag a purchase every time they arrive on your site.

Start by showing your loyal customers that you care by giving them one-off surprises. You could move them up a loyalty tier (where they have more points to unlock) or give them exclusive access to new products. By surprising and delighting with offers they’ll want to engage with, your conversion stats will skyrocket when they return to your store.

You could also re-engage customers who you may have lost to your competitors with an offer they can’t ignore. This could be a one-off, double points event around holidays such as St. Patrick’s Day or Valentine’s Day. This piques their interest and entices them back to your store sooner.


4. Cart Abandonment Rates: Build Confidence with the Help of Your Existing Customers

Cart abandonment is a challenge for every retailer – fashion or not. You can do all the leg-work to get shoppers adding to their carts, and still have them bail at the checkout. Globally last year cart abandonment rates hit 80% and a lack of customer trust could be the culprit.

Encourage your already loyal customer base to become champions of your brand. As fashion is an image-driven industry, encourage your loyal customers to share image-led product reviews in exchange for loyalty points. With 84% of people trusting online reviews as much as they do their friends, this method will validate the integrity of your products where customers can’t touch or try them on. With this renewed confidence, customers will be less likely to abandon their carts as they trust your offering the first time around.

You could also reduce doubt by rewarding your existing customers for sharing their experiences with your store on social media. With fashion brands having so much dominance on Instagram, social media is the perfect space to attract the eyes of potential shoppers. By encouraging your existing customers to share how your products look in real life, curious shoppers will have the confidence to complete their purchases rather than abandoning you at the checkout.

Jewelery brand, Astrid and Miyu, use their own social channel to showcase customers wearing their products. By using their loyal customers to model products in action, they provide new customers with genuine images to browse before completing their purchase.



Seizing Customer Loyalty Opportunities

The fashion industry is ripe with opportunity. To keep up, and differentiate, fashion retailers need to step up their game and improve on the four metrics outlined above. By focusing on nurturing customer loyalty and retention, fashion brands can improve these metrics while also building personal relationships with their loyal customer base.

Want to learn more ways to improve on these four key metrics? Head over to the LoyaltyLion Academy where we share more exciting ways you could improve your customer loyalty and retention rates.



About LoyaltyLion

LoyaltyLion is a data-driven loyalty and engagement platform trusted by thousands of ecommerce brands worldwide. Merchants use LoyaltyLion when they want a fully customised loyalty program that is proven to increase customer engagement, retention and spend. Stores using LoyaltyLion typically generate at least $15 for every $1 they spend on the platform.