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Denim-inspired specialty retailer launches private-label credit card

BY Deena M. Amato-McCoy

Lucky Brand has a new way to drive loyalty and spur sales.

The specialty retailer is partnering with Alliance Data Systems Corp., to offer a private label credit card. Users will earn points by using the card for purchases. Members are also entitled to special offers and exclusive benefits, such as certificates for discounts.

Alliance Data will deliver data-driven insights through its prospecting services — the information Lucky Brand needs to identify potential news customers, and more effectively attract and gain more loyal, profitable customer relationships, the company said.

Alliance Data will also support ongoing integrated marketing programs, including in-store, digital, and mobile, as a means of driving brand loyalty and top-line sales.

The card will be accepted at the brand’s 154 specialty retail and 82 outlet locations throughout the United States, and online.

“At Lucky Brand, we are obsessed with customer centricity, this means that we put the customer at the center of everything we do as an organization,” said Carlos Alberini, CEO of Lucky Brand.

The credit card program coincides with this strategy, and “we are excited to offer our customers amazing new benefits,” he added.

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L Brands strong out of the gate

BY Marianne Wilson

L Brands is off to a great start in January.

The retailer, whose brands include Victoria’s Secret, Pink, Bath & Body Works, La Senza and Henri Bendel, reported that same-store sales rose 7% in January, easily beating analysts’ predictions of a 1.8% increase . Overall sales for the five-week period rose to $1.04 billion, up from $805.2 million in the year-ago period. (The extra week this January represented approximately $150 million in sales.)

By brand, same-store sales rose 4% at Victoria’s Secret’s in January, and 13% at Bath & Body Works, both beating expectations.

L Brands reported sales of $4.82 billion, up from $4.49 billion last year, for its fourth quarter, ended Feb.3. Same-store sales rose 2%.

For the full year, L Brands’ net sales were $12.63 billion, compared to $12.57 billion last year. Same-store sales fell 3%. The retailer said its exit from the swim and apparel categories had a negative impact of about 3 percentage points and 5 percentage points to total company and Victoria’s Secret comparable sales, respectively.

The company operates 3,078 company-owned specialty stores under its Victoria’s Secret, Pink, Bath & Body Works, La Senza and Henri Bendel banners in the United States, Canada, the United Kingdom, Ireland and Greater China.

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Analysis: CVS is innovative in health, but unimaginative in retail

On an overall basis, this is a robust set of numbers for CVS. Total revenue is up, the pharmacy services division is performing well, and net income rose by 92.5%. On its own, this provides a stable platform for the $69 billion acquisition of Aetna. However, that CVS stands to gain around $1.2 billion a year as a result of the recent tax cuts, improves the prospects for both the acquisition and the company’s future growth prospects.

CVS has said that it intends to invest $425 million of its tax-cut windfall on improving staff salaries and benefits. It will also use some of the proceeds to pay down debt once the Aetna deal completes. The most exciting investment, however, is a further push into data analytics to improve health outcomes and lower costs for its customers. We believe that this, along with more health services in stores, will give CVS a much more significant role in the healthcare sector. Over the medium term, this should boost both revenue and earnings.

One of the things we like about CVS’s plans is the idea of making its stores more of a destination for health solutions. The healthcare market is overly complicated and can be hideously expensive. Should it get Aetna under its umbrella, CVS has an opportunity to help simplify processes and improve outcomes for patients. The idea of developing the healthcare equivalent of the Apple Genius Bar in shops is an interesting idea and should help to drive customer traffic to CVS’s extensive network of stores.

As much as CVS is forward thinking and innovative in health, it is an extraordinarily unimaginative and backward-looking retailer. This is one of the reasons why front of store sales are still in negative territory despite very weak prior year comparatives and a boost to sales from remedies for a particularly nasty flu and cold season.

Our data also show that CVS largely missed out on the holiday season bonanza, which saw consumers spend freely and at elevated levels. Beauty, for example, was a robust category both for self-purchasing and for gifting. CVS was well down the batting order when it came to the retailers customers planned to, and did, use. The same holds true for almost every non-health category CVS sells. While we accept that CVS does not need to have the pulling power of Sephora or Ulta, it should and could do much better.

Unfortunately, relatively few retail shoppers see CVS as a destination in its own right, even for categories like beauty, which are naturally allied to its proposition. Given the scale of CVS, which puts its stores within easy reach of most Americans, this is a massive lost opportunity.

The reason for this relative lack of interest is the weak retail proposition. Our consumer research shows that CVS ranks well below its peers on attributes like store design, product displays, retail customer service, ease of shop, inspiration, and brand selection. In short, it is hopeless at retailing. The sales it does make are only because of its scale and convenience; but if it attains this with little effort, a bit more care, and attention could transform its prospects.

Making stores welcoming places where shoppers want to come is not just important for retail sales. If CVS truly wants to become to health solutions what Apple Stores have become to technology solutions, it must understand that shop aesthetics, customer service, the simplicity of the proposition, and many other retail skills matter. Failure to develop these things will mean CVS continues to fall short of its potential.

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R.Mallory says:
Feb-08-2018 03:29 pm

In short CVS does not mean fun... it's where you go to grab something & get out. Or for the pharmacy (which some have cut their hours) a place to go & wait in line. That's why its called a drug store not a vacation. Fact that their rewards card is segregated between online & in store (pts for in store but none for online), also makes them less "fun" as a "brand". They do get points for stopping selling smokes... and healthy benefit is there are less people clogging the entrance way smoking what they just would have bought. Stores moved the makeup to right inside the entrance, which makes browsing very awkward to know your shopping is on display to every one in & out of the door... Sephora does not make you stand in a doorway to shop. Sephora is shopping, but CVS by nature of what they sell (meds, products for sickness & aging) is not a cool destination.

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