Cosmetic retail chain with a fast-growing loyalty program

Fredrik & Louisa is a Norwegian nationwide cosmetic retailer with 50 stores from Kirkenes to Kristiansand, as well as an online store. The first Fredrik & Louisa store was founded in Oslo in 1984, and they sell luxury products from the beauty industry’s leading brands. The Diller team interviewed Stine Handley, Head of Administration at Fredrik & Louisa, to learn about their experience with moving to the Diller loyalty platform in April 2021.

Why did you start with a loyalty program?

First and foremost, we wanted to build loyalty and get closer to our customers, and also to help make it a more conscious decision which cosmetic store a customer end up visiting. We wanted to make a difference and give customers good reasons to come to us. We were very clear about the importance of a good loyalty program – we simply saw the need.

Our goal is to create shopping experiences that hopefully exceed the expectations of our customers. We try to run our loyalty program in a way that makes our customers feel it is both enjoyable and useful to be a member.

The loyalty program is a marketing platform that is part of our marketing budget. The communication to club members via SMS and email reaches customers more directly than many other marketing channels. It is cost effective and works well for us.

What kind of results have you seen so far?

We see good results from the loyalty program. The immediate feedback comes from employees in the store, who notice that customers enter the stores just 5-10 minutes after we send out an SMS. These SMS messages have a big effect. We believe that SMS is the best channel for reaching members, since it is personal and direct. We make sure to have a good mix of email newsletters and promotions by SMS, so that customers don’t get too many inquiries from us, because we don’t want to “bother” them.

We send SMS campaigns every month with a good offer and a simple message. We see that this is effective, and that customers are responding by visiting our stores and shopping with us.

Do you have examples of successful campaigns?

Campaigns with a 30% discount on an optional item or category campaigns with for example a good skincare offer are always very successful. Once you get the customer into the store, there will often be upsell opportunities of other items, so we see that such promotions pay off in a good way.

We also believe that there may be good potential in inviting loyal customers at a certain bonus level to e.g. skincare events in the store or other relevant and exclusive events. It definitely doesn’t always have to be discounts that drive loyalty. A combination of discounts and exclusive events is quite effective. We look forward to doing more of this going forward.

How important is it that Diller is integrated with the POS / cash register?

It was simply essential!

What do you think of the cooperation between you, Diller and Dekon?

Diller was recommended to us by Fredrik Halvorsen in Dekon,which is our supplier of cash register systems. It’s been an excellent collaboration between the parties. In particular, I’d like to mention Knut Ole Hauge in Diller, who has been phenomenal in assisting us through the process.

How did you get started —and how do you recruit new club members?

We started with Diller in April 2021 and we are very pleased with the recruitment of new members to the loyalty program. We had 85,000 members from our previous loyalty member database when we started, and after only six months we have doubled this to 170,000 customers in our membership base.

Recruitment of new members takes place in our stores, and all employees ask customers if they want to become a member. They mention the welcome coupon, which is a 30% discount on an optional item, and that members save 2.5% bonus every time they shop. We see that this works really well.

What do you think about the potential of segmenting the member base?

We believe that it’s important and that it will enable us to create really good concepts and benefits for our members. We look forward to addressing this more going forward. Both segmentation on demographics and interests, but also campaigns based on purchase history are interesting. For example, it might be good to have campaigns towards non-active customers with a good offer to encourage a revisit to their local store.

What is your vision for the loyalty program going forward?

Today’s consumers aren’t necessarily super loyal, so it’s important to have a loyalty program that makes them enjoy shopping with us. We always have great offers, but we also try to create good shopping experiences. If a customer leaves the store with a bag full of products, it is a happy and satisfied customer who has had a good customer experience.

We believe that we will have around 250,000 members by next year, and it is more important to us that we have active customers than to have as many members as possible. We look forward to developing the loyalty program, to make sure that it’s an important part of creating these great shopping experiences.