Q&A   //   August 25, 2020

Madewell CMO Derek Yarbrough on the brand’s rewards program expansion

While J.Crew stumbles, Madewell has continued to grow. In fact, the clothing brand brand has become a beacon of hope for its parent company — especially amid recent bankruptcy-related woes. Thanks to brand collaborations and a loyal following, Madewell’s accounted for nearly one-third of the company’s annual revenue, at more than $600 million. 

This week, Madewell is revamping its reward program by adding a new points-based element. The program previously included perks like free shipping and events invites. The new iteration adds points to the mix, offering customers discounts when they reach a certain threshold.

Madewell’s chief marketing officer Derek Yarbrough spoke with Modern Retail about the program’s new rollout, customer loyalty and bridging the gap between stores and e-commerce. The conversation has been edited for length and clarity. 

How will the program build on the existing Insider tiers to encourage repeat purchases via points?
Points were the natural progression for the program, and something we’ve been planning carefully for a while. It’s something our customers have been asking for, and this felt like the right time to launch the component to help drive value. It’s also another mechanism in building a relationship with our customers. The focus is on two things: we want to make it as simple as possible by offering one point for every dollar spent (and 2X on jeans). And also having the experience be applied across all channels, both in store and online. 

How do you foresee rewards playing into the company’s physical store strategy?
We’ve always had customers shop in a combination of in-store and online, as well as those who go the e-commerce-only route. What’s happening this year has accelerated certain trends in the segments, but digital has always been really important in building our omnichannel. Sometimes we have to tweak the [store] numbers here and there, but it’s an ongoing conversation. There will always be an occasion where some customers prefer going in while others browse online. So while the use case evolves over time, we know the community loves having both options. All in all, stores will always be a very important part of our brand. 

Will it impact the third-party partnerships you have with retailers like Nordstrom and Shopbop?
We have a great wholesale partnership with retailers like Nordstrom, but historically, the majority of our business has been direct-to-consumer and will be that way. This program will further lean into the connection with our customers by letting them know they can get the best experience at Madewell.

Rewards programs are more popular than ever, even among DTC brands. Has the coronavirus made them even more vital in gaining and retaining customers?
Rewards programs aren’t anything new, obviously, and yes we’re seeing them take off even for DTC brands that normally rely on new customers versus repeat purchases. Of course, Covid has accelerated the need for that. For us, points felt like the next logical step in helping ensure customers’ loyalty. However, every brand has to execute and customize it in a way that makes sense for them. We had to consider the data reflecting how our large existing base shops and which perks could affect their behavior. We’re not so much attempting to acquire new ones with it, but build on the community we have.