Can Rakuten+ Transform Designer Brand Loyalty and Boost Sales in the Luxury Market?

Since acquiring Ebates Inc., a membership-based online cash-back site in the U.S., in 2014, the Japanese technology conglomerate Rakuten has become a top cash-back shopping platform for over 3,500 stores. The acquisition of Ebates was seen as a strategic move to integrate Rakuten’s existing business assets and technologies with Ebates’ platform, creating a unique and innovative e-commerce ecosystem.

On May 30, Rakuten introduced Rakuten+, an exclusive membership program tailored for designer brands. This marks Rakuten’s first paid membership initiative, offering brands direct access to highly engaged and loyal shoppers of designer fashion. Members of Rakuten+ will earn a minimum of 10% cash back on purchases from participating brands and retailers year-round. This program aims to help designer brands expand their audiences and foster long-term customer loyalty through elevated cash-back incentives.

Central to Rakuten+ is the data-driven insight that Rakuten members significantly boost sales for designer brands. A recent Rakuten study highlighted a 29% increase in shoppers for a leading luxury department store attributable solely to Rakuten. Additionally, higher cash-back rates were linked to increased average order value and repeat purchases, underscoring the effectiveness of this model.

“Rakuten+ offers a distinctive opportunity for designer brands to connect with some of Rakuten’s most active and loyal members who consistently shop and spend more with each purchase,” said Julie Van Ullen, chief revenue officer of Rakuten Rewards.

Additionally, she told Women’s Wear Daily, “Rakuten+ allows [high-end] brands to appeal to a new generation of designer brand shoppers without the need for discounting or promotions. Beyond the incremental value that elevated cash back can deliver from a sales perspective, Rakuten+ is an integral part of our product portfolio geared toward helping designer brands establish and engender lifelong loyalty. Rakuten is more than just a cash back company. We’re a full-funnel, loyalty partner equipped with advanced back-end technology, a hyper-loyal member base and unparalleled first-party data as the largest cash back publisher in the industry.”

Rakuten+ not only drives sales but also enhances the entire shopping journey for members, providing brands with opportunities to create loyalty campaigns that attract new buyers and encourage repeat purchases. This program, which WWD reported will be invite-only, leverages Rakuten’s extensive reach and unique value proposition within the luxury market, enabling brands to maintain their premium image while benefiting from Rakuten’s Cash Back service.

Rakuten has been strategically investing in its platform to appeal to designer brands, partnering with events like New York Fashion Week and hosting exclusive shopping events. According to the company, these efforts allow brands to maintain their exclusivity and sell at full price without relying on discounts.

Furthermore, in April, Rakuten Group Inc. announced a new partnership with Accor, a French hospitality company, enabling the exchange of loyalty points between Rakuten Points and Accor’s “ALL – Accor Live Limitless” program with connections to over 40 hotel brands in 110 countries, providing members with access to various rewards, services, and experiences.

Starting this month, members will be able to convert Accor’s ALL Reward points into Rakuten Points. Then, starting in September 2024, Rakuten Points can be exchanged for ALL Reward points. The exchange rates are set at 2,000 ALL points for 1,600 Rakuten Points, and 3,200 Rakuten Points for 1,000 ALL points. Members can choose the number of points they want to exchange through dedicated pages on the Rakuten PointClub and ALL websites.

This collaboration marks the first initiative following the memorandum of understanding signed by Rakuten and Accor in January 2023. The partnership aims to increase the range of services available to loyalty program members, enhancing the usability of Rakuten Points and overall member satisfaction. Future collaborations may include integrating Rakuten’s travel reservation service Rakuten Travel.

Rakuten Points, the company’s flagship loyalty program, issues approximately 650 billion points annually and has issued over 4 trillion points to date. These points can be used across Rakuten’s online marketplace, Rakuten Travel, and over 6 million offline locations such as convenience stores and restaurants.