Why Fashion Brands Need to Master Customer Referrals

Fashion, specifically, retail, is changing. With retail stores closing, marketing tactics of “discoverability” – for example, placing new products next to customer favorites – are seeing diminishing returns. According to a Morningstar report, malls across the United States are closing in record numbers, citing ecommerce as a primary reason. 

“The United  States has 23.5 square feet of retail space per person, compared with 16.4 square feet in Canada and 11.1 square feet in Australia, the next two highest — suggesting that more stores are likely to close, further decimating many malls.”  

Now, more than ever, it’s clear that fashion brands need to harness the power word-of-mouth marketing, and specifically, referral based marketing, to drive new sales. A 2016 survey conducted online by Nielsen’s Harris Poll found that 82% of Americans seek recommendations from friends and family when considering a purchase, while 67% say they’re more likely to make a purchase when a friend or family member shares it online.

But, just because a brand has a referral program, doesn’t mean customers will use it. Below, you’ll find actionable advice on how your fashion brand can market your referral program to customers:

Measure the Impact of Influencer Marketing

Fashion brands have seen varying levels of success with influencer marketing (partnering with a blogger or instagrammer who has a large following).  

According to AdWeek, “Ninety-four percent of those who used influencer marketing believe the tactic to be effective. At the same time, 78 percent said that determining the ROI of influencer marketing will be a top challenge in 2017.”

When partnerships work, they really work, resulting in sales and increased visibility. Problem is, influencer marketing campaigns can be costly and deliver erratic ROI, but a referral marketing program can help mitigate risk.

Including a unique referral link (in an influencer’s Instagram bio, or hyperlinked on their blog) through a platform like Ambassador, helps brands measure just how much product a particular influencer moved. Also, offering an influencer the ability to make additional money via a referral program does two things:

1. May enable a brand to negotiate lower sponsorship rates.

2. Prompt the influencer to post about the brand in the future to make money through the referral program. 

Educating Customers: Online, App Pop-Ups & Email Marketing

Through an Ambassador study, we found that 40% of ambassadors actually shared links and content, resulting in 11.5 site visits per share. (For example, if a brand has 10,000 enrolled ambassadors, 4,000 of those ambassadors are sharing.)

Download the Referral Marketing + eCommerce report here.

Through using website, in-app popups, and email (like our friends at Mizzen + Main), you can increase the number of ambassadors in your referral funnel, directly resulting in revenue increase.

Save Abandoned Carts

The bane of every eCommerce brands existence are abandoned carts. Using cart abandonment software (whether it’s Shopify or built in house) to determine where customers are dropping off, and offer them information on your referral marketing program.

For example, if a brand is using software like Rejoiner (that emails customers about their abandoned cart), the brand should include info on their referral marketing program.

According to Business Insider, “58% of shoppers say that unexpected costs (such as delivery or commissions) are the main reason why they abandon a purchase.” 

Offering a way for customers to see their purchase as a way to make money, reframes the relationship and may prompt them to buy.

Referral Marketing is a Must-Have for Fashion Brands

No matter what happens, you can bet that consumers and products won't be taken out of the equation. In order to stand out from the crowd and entice loyal customers, fashion brands must develop creative ways for customers to interact with products and services. Acquiring customers, expanding reach, and exploring a new revenue stream may sound like a tall order, but developing an eCommerce referral program can be an innovative, all-in-one marketing solution for your fashion brand.