Virgin Megastores sees increase in US customer buy-in
North American Virgin Megastores says its Virgin Important 
Person (V.I.P.) loyalty programme has contributed to “industry-defying” growth
for the retailer in DVD, electronics and fashion merchandise sales.
The lifestyle entertainment retailer added that its Graphicard-based loyalty programme – devised and implemented by Visible Results – is performing above expectations as V.I.P. members continue to spend at higher than anticipated levels.
In the first half of 2008, the Average Dollar Spend of V.I.P. members was 60% higher than non-members, settling from 100% increase in average sales at the start the program in October 2006.
George Stevens, country manager Visible Results USA, said the Virgin Megastores example shows how a loyalty program can successfully integrate with a retailer’s whole-of-business approach to customer engagement, and contribute to differentiating that retailer even in challenging economic times.
“The Virgin Megastores marketing team has really been focused on making the in-store experience fun and relevant to their customer base since the program went live,” said Stevens. “Virgin Megastores has shown immense loyalty to their own customers and in my opinion that’s been the key to their success, not just within their V.I.P. program, but across their entire business.”
He added that the financial success of the V.I.P. program compares with a massive 15% decline in industry sales of traditional music formats, such as CDs and LPs in 2007 compared to 2006, according to Nielsen SoundScan.
Virgin Megastores implemented a diversification strategy for its merchandise in 2002. Along with music, DVDs and books, Virgin Megastores introduced fashion, electronics, pop culture items, and consumer electronics.
Dee McLaughlin, VP of marketing for Virgin Entertainment Group, North America said the V.I.P. program has been a very important ingredient in Virgin’s resilience to economic conditions; when combined with the diversification strategy, the dedication of store staff and the brand’s successful partnerships with its vendors and other suppliers.
McLaughlin said the real “wow-factor” for members are the prizes, points and privileges. “We saw we could integrate what we were already doing, such as live in-store events and competitions, with the Visible Results program. The card has taken our activities to a new level – it’s not just a card, it’s an experience.”
Stevens added: “Programs like V.I.P. allow retailers to build an insightful database that measures the real impact of all of their marketing activities. Leading retailers, such as Virgin Megastores, are using the information generated by their loyalty programs to make sure the money spent on customers is both targeted and effective.”
Virgin Megastores uplift in total store sales in 2008 is 5.55%. The V.I.P. program now has 300,000 members in two markets: California and New York.