June 6, 2024
iStock.com/Sundry Photography
Can Rakuten+ Transform Designer Brand Loyalty and Boost Sales in the Luxury Market?
Since acquiring Ebates Inc., a membership-based online cash-back site in the U.S., in 2014, the Japanese technology conglomerate Rakuten has become a top cash-back shopping platform for over 3,500 stores. The acquisition of Ebates was seen as a strategic move to integrate Rakuten’s existing business assets and technologies with Ebates’ platform, creating a unique and innovative e-commerce ecosystem.
On May 30, Rakuten introduced Rakuten+, an exclusive membership program tailored for designer brands. This marks Rakuten’s first paid membership initiative, offering brands direct access to highly engaged and loyal shoppers of designer fashion. Members of Rakuten+ will earn a minimum of 10% cash back on purchases from participating brands and retailers year-round. This program aims to help designer brands expand their audiences and foster long-term customer loyalty through elevated cash-back incentives.
Central to Rakuten+ is the data-driven insight that Rakuten members significantly boost sales for designer brands. A recent Rakuten study highlighted a 29% increase in shoppers for a leading luxury department store attributable solely to Rakuten. Additionally, higher cash-back rates were linked to increased average order value and repeat purchases, underscoring the effectiveness of this model.
“Rakuten+ offers a distinctive opportunity for designer brands to connect with some of Rakuten’s most active and loyal members who consistently shop and spend more with each purchase,” said Julie Van Ullen, chief revenue officer of Rakuten Rewards.
Additionally, she told Women’s Wear Daily, “Rakuten+ allows [high-end] brands to appeal to a new generation of designer brand shoppers without the need for discounting or promotions. Beyond the incremental value that elevated cash back can deliver from a sales perspective, Rakuten+ is an integral part of our product portfolio geared toward helping designer brands establish and engender lifelong loyalty. Rakuten is more than just a cash back company. We’re a full-funnel, loyalty partner equipped with advanced back-end technology, a hyper-loyal member base and unparalleled first-party data as the largest cash back publisher in the industry.”
Rakuten+ not only drives sales but also enhances the entire shopping journey for members, providing brands with opportunities to create loyalty campaigns that attract new buyers and encourage repeat purchases. This program, which WWD reported will be invite-only, leverages Rakuten’s extensive reach and unique value proposition within the luxury market, enabling brands to maintain their premium image while benefiting from Rakuten’s Cash Back service.
Rakuten has been strategically investing in its platform to appeal to designer brands, partnering with events like New York Fashion Week and hosting exclusive shopping events. According to the company, these efforts allow brands to maintain their exclusivity and sell at full price without relying on discounts.
Furthermore, in April, Rakuten Group Inc. announced a new partnership with Accor, a French hospitality company, enabling the exchange of loyalty points between Rakuten Points and Accor’s “ALL – Accor Live Limitless” program with connections to over 40 hotel brands in 110 countries, providing members with access to various rewards, services, and experiences.
Starting this month, members will be able to convert Accor’s ALL Reward points into Rakuten Points. Then, starting in September 2024, Rakuten Points can be exchanged for ALL Reward points. The exchange rates are set at 2,000 ALL points for 1,600 Rakuten Points, and 3,200 Rakuten Points for 1,000 ALL points. Members can choose the number of points they want to exchange through dedicated pages on the Rakuten PointClub and ALL websites.
This collaboration marks the first initiative following the memorandum of understanding signed by Rakuten and Accor in January 2023. The partnership aims to increase the range of services available to loyalty program members, enhancing the usability of Rakuten Points and overall member satisfaction. Future collaborations may include integrating Rakuten’s travel reservation service Rakuten Travel.
Rakuten Points, the company’s flagship loyalty program, issues approximately 650 billion points annually and has issued over 4 trillion points to date. These points can be used across Rakuten’s online marketplace, Rakuten Travel, and over 6 million offline locations such as convenience stores and restaurants.
BrainTrust
Cathy Hotka
Principal, Cathy Hotka & Associates
Clay Parnell
President and Managing Partner
Neil Saunders
Managing Director, GlobalData
Recent Discussions
Discussion Questions
How might Rakuten+ influence the broader luxury market’s approach to e-commerce and customer engagement?
What other innovations or strategies could Rakuten implement to further enhance Rakuten+ and its overall e-commerce ecosystem?
How might collaborations like the one between Rakuten and Accor reshape loyalty programs, and what challenges could arise in managing them effectively?
Poll
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The Rakuten rewards program is carefully targeted at higher end consumers who are very engaged. This makes it a valuable platform for premium brands, which might be why they’ve already hit some great labels on board. The important thing will be to keep this exclusive and not dilute it by expanding it too much. How much it stimulates sales remains to be seen – as the audience is more likely to be able to afford to buy on impulse, good campaigns might drive some additional spending.
Do they “create” new sales, or simply draw from existing retailers? Until we answer that (basic) question , talk of transformation and segment growth is premature ….way, way, premature.
I have to question this strategy. Luxury goods are supposed to be at a higher price, part of the appeal of owning it as not everyone can have it. It may not be called a discount, but technically if the customer is getting money back it is. What brands have agreed to join this program and is it really attracting the loyal customer that will help them grow their brand? Or am I missing something?
The enemy of luxury is discounting, and Rakuten provides promotions without discounts. This could be a match made in heaven.
The strategy in pursuing the higher end brands make sense, but Rakuten also has to prove that they can attract the appropriate level of consumer. There’s a lot of potential there, but it will take time.
Rakuten never fails to amaze me. They are among the lowest-profile yet highly successful e-commerce platforms in the world. This program appears to be a great melding of loyalty, promotion, and spot-on consumer segmentation.
This is just another way for a company to attempt to monetize its existing customers. The value of the program for consumers is almost completely predicated on what is being sold. Without that you can have a perfectly orchestrated loyalty program with no material effect on customer satisfaction, loyalty and top line revenue growth.
This is actually pretty funny…or perplexing…or weird. I’m not sure which. The umbrella statement is… “Rakuten+ allows [high-end] brands to appeal to a new generation of designer brand shoppers without the need for discounting or promotions.” And then the whole article goes on to talk about…discounting (cash back), points and promotions.
And then…”According to the company, these efforts allow brands to maintain their exclusivity and sell at full price without relying on discounts.” How is it still full price if there is cash back? Sounds like “free” delivery after paying a subscription price.
This all sounds like a masterclass in wordsmithing written by a brilliant comedian/politician. It’s the luxury market, so we can’t call it discounting. What’s a better way of saying discounting, without saying discounting…??? I got it…!!!
Rakuten+ could revolutionize the luxury market by demonstrating how elevated cash-back incentives drive sales without discounting. It leverages data-driven insights to boost customer loyalty and repeat purchases, encouraging other luxury brands to adopt similar e-commerce strategies. This program showcases the potential for integrating exclusive memberships and cashback offers to enhance customer engagement. However, this strategy might dilute brand exclusivity and potentially erode profit margins due to the high cash-back payouts.
I am actually a Rakuten subscriber and have found that the app pops up more indiscriminately than I would have imagined, to the point where it’s a nuisance, and one that I am trying eagerly to discontinue. That’s easier said than done.
Do I actually purchase so many luxury brands that the app would find me for nearly every purchase I make? I kind of doubt that. It seems as though the app finds me even for certain commodity types of purchases.
Their app site makes it almost impossible to opt out. It was also difficult to find a way to connect with anyone at the app to find out how to quit getting pop ups. And its difficult even to get rid of the pop up. It offers no option to be deleted, so the consumer needs to “mouse it” to the side.
Even their Q&A, and automated customer service chat line fails to provide an answer about “quitting.” It’s not one of the choices.
After quite a lot of wasted time, and frustration, I discovered that the opt out begins in their “privacy settings.” Go figure. But even there, there remains a long, complicated, arduous progress that is time consuming, with “back and forth” activity, and I’m still working on it in my “spare time.” No short cuts, that is for sure.
It would be fair to say that if you check in to Rakuten you might not be able to check out! – Db
It’s interesting how Rakuten+ is focusing on customer loyalty without resorting to discounts. This approach can inspire other luxury brands to adopt similar models, emphasizing long-term value and customer engagement. Overall. The Rakuten and Accor collaboration showcases how loyalty programs can expand beyond retail to include travel and hospitality, offering members more diverse rewards. However, managing such partnerships could be challenging due to differing program structures. Effective communication and a robust technological framework will be crucial provide an amazing experience for members.
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The Rakuten rewards program is carefully targeted at higher end consumers who are very engaged. This makes it a valuable platform for premium brands, which might be why they’ve already hit some great labels on board. The important thing will be to keep this exclusive and not dilute it by expanding it too much. How much it stimulates sales remains to be seen – as the audience is more likely to be able to afford to buy on impulse, good campaigns might drive some additional spending.
Do they “create” new sales, or simply draw from existing retailers? Until we answer that (basic) question , talk of transformation and segment growth is premature ….way, way, premature.
I have to question this strategy. Luxury goods are supposed to be at a higher price, part of the appeal of owning it as not everyone can have it. It may not be called a discount, but technically if the customer is getting money back it is. What brands have agreed to join this program and is it really attracting the loyal customer that will help them grow their brand? Or am I missing something?
The enemy of luxury is discounting, and Rakuten provides promotions without discounts. This could be a match made in heaven.
The strategy in pursuing the higher end brands make sense, but Rakuten also has to prove that they can attract the appropriate level of consumer. There’s a lot of potential there, but it will take time.
Rakuten never fails to amaze me. They are among the lowest-profile yet highly successful e-commerce platforms in the world. This program appears to be a great melding of loyalty, promotion, and spot-on consumer segmentation.
This is just another way for a company to attempt to monetize its existing customers. The value of the program for consumers is almost completely predicated on what is being sold. Without that you can have a perfectly orchestrated loyalty program with no material effect on customer satisfaction, loyalty and top line revenue growth.
This is actually pretty funny…or perplexing…or weird. I’m not sure which. The umbrella statement is… “Rakuten+ allows [high-end] brands to appeal to a new generation of designer brand shoppers without the need for discounting or promotions.” And then the whole article goes on to talk about…discounting (cash back), points and promotions.
And then…”According to the company, these efforts allow brands to maintain their exclusivity and sell at full price without relying on discounts.” How is it still full price if there is cash back? Sounds like “free” delivery after paying a subscription price.
This all sounds like a masterclass in wordsmithing written by a brilliant comedian/politician. It’s the luxury market, so we can’t call it discounting. What’s a better way of saying discounting, without saying discounting…??? I got it…!!!
Rakuten+ could revolutionize the luxury market by demonstrating how elevated cash-back incentives drive sales without discounting. It leverages data-driven insights to boost customer loyalty and repeat purchases, encouraging other luxury brands to adopt similar e-commerce strategies. This program showcases the potential for integrating exclusive memberships and cashback offers to enhance customer engagement. However, this strategy might dilute brand exclusivity and potentially erode profit margins due to the high cash-back payouts.
I am actually a Rakuten subscriber and have found that the app pops up more indiscriminately than I would have imagined, to the point where it’s a nuisance, and one that I am trying eagerly to discontinue. That’s easier said than done.
Do I actually purchase so many luxury brands that the app would find me for nearly every purchase I make? I kind of doubt that. It seems as though the app finds me even for certain commodity types of purchases.
Their app site makes it almost impossible to opt out. It was also difficult to find a way to connect with anyone at the app to find out how to quit getting pop ups. And its difficult even to get rid of the pop up. It offers no option to be deleted, so the consumer needs to “mouse it” to the side.
Even their Q&A, and automated customer service chat line fails to provide an answer about “quitting.” It’s not one of the choices.
After quite a lot of wasted time, and frustration, I discovered that the opt out begins in their “privacy settings.” Go figure. But even there, there remains a long, complicated, arduous progress that is time consuming, with “back and forth” activity, and I’m still working on it in my “spare time.” No short cuts, that is for sure.
It would be fair to say that if you check in to Rakuten you might not be able to check out! – Db
It’s interesting how Rakuten+ is focusing on customer loyalty without resorting to discounts. This approach can inspire other luxury brands to adopt similar models, emphasizing long-term value and customer engagement. Overall. The Rakuten and Accor collaboration showcases how loyalty programs can expand beyond retail to include travel and hospitality, offering members more diverse rewards. However, managing such partnerships could be challenging due to differing program structures. Effective communication and a robust technological framework will be crucial provide an amazing experience for members.