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January 2006

News & Media

Retailers 'Invite' Consumers to Increase Brand Loyalty 
January 17, 2006 

BOSTON, MA -- Merchants such as The Gap have found a way to draw more customers: by inviting them.

Invitation-only events hosted by merchants are taking place across the nation to keep their best customers loyal to their brand while luring new shoppers in the process, reports the Boston Globe.

The newspaper writes, "In the past year, a growing number of merchants from Giorgio Armani Cosmetics to Toys 'R' Us has introduced invitation-only shopping events as a way to promote their products with offers of free food, discounts and exclusivity."

The Globe notes that the events are helping merchants build customer loyalty and jump ahead of the competition posed by online stores or low prices found at discount stores. Retail analysts note that stores are likely to adopt "more aggressive strategies such as hosting exclusive events" in an effort to boost sales, particularly after a "sluggish holiday season."

''Very successful brands are like clubs," Nathan Coyle, senior strategist of marketing consultancy at Faith Popcorn's BrainReserve, told the newspaper, adding, "It creates a sense of something a customer wants to belong to."

However, getting an invite to these exclusive events may not be easy. Invitation-only shopping parties have a guest list, but the hosts will often allow their guests to bring friends and family members. Thanks to technology, merchants are able to invite their best customers by tracking their in-store frequency, how much they spend and which items and brands they purchase.

Invitation-only soirees, notes the Globe, also help consumers get in "a buying mood." Toys "R" Us, for example, began hosting invite-only shopping events a few years ago. During the 2005 holiday season, the toy store chain offered its loyal customers exclusive access to its stores.

''It's an opportunity for groups to have the stores to themselves, and during the holidays, that's very attractive. They don't have to fight the crowds, and they get much more attentive services," Kathleen Waugh, a spokeswoman for Toys ''R" Us, told the newspaper.

Marshal Cohen, chief retail analyst at NPD Group, told the Globe that merchants "must be cautious when offering exclusive events, ensuring that customers are getting a unique, valuable experience, and not some promotional gimmick."

Cohen adds that the events can create "tremendous customer loyalty" and develop a bond "between consumers and retailers that's been lost over the last generation."

''It makes me feel like a store gives a damn about me once again," Cohen said.