Gap Puts a New Spin on Loyalty Programs

The GAP recently had this cool promotion in Vancouver where they turned things upside down inside and outside a Gap store. The purpose was to draw attention to Gap Vancouver's new customer loyalty program called Sprize.

The idea behind Sprize is that if a customer buys a product that gets discounted in the following 45 days, they get the difference credited to their Sprize account. The lucky shopper can then return to the store later and use the credit toward new purchases. Although it may seem that the company is giving away their hard-earned cash, Gap does benefit in two major ways.

By thinking they'll get a discount later on, consumers are more likely to buy what they want instantly and not walk away from the store without buying, thinking that they'll buy it when it goes on sale. When in reality, they'll probably just forget about it. The trick with Sprize is that when consumers buy items for the full price, it becomes less likely that the products will ever be put on sale.

Secondly, when a customer returns to the store to spend the money credited to their account, they become a returning customer who'll probably spend much more than just the given bonus. And all this while building an on-going relationship with a brand they view as extremely generous.

Of course, even with these two significant benefits, it's still a bit of a gamble. Will be interesting to see if this model will catch on.