'Retail Underdog' Children's Orchard Holds Key To Beating Challenge Of Customer Retention

At 87 Stores and Growing, National Upscale Resale Franchise has Handle on Innovative Customer Loyalty Programs that Work

(Tuesday, February 20, 2007) - GAP Kids might have the flashy, dance-rhythmic commercials and Gymboree might boast prime real estate space in malls across the country, but a resilient 87-unit upscale resale chain based in the nation's mid-section has proven to have a firm grasp on the one thing that eludes even the largest, leading national retailers – an effective customer loyalty strategy.

With customer loyalty programs adding a healthy $2 million in sales last year and enticing more than 100,000 shoppers annually to its exclusive mailing lists, Children's Orchard appears to have the magic formula to customer retention. Bucking economic trends, the 25-year-old franchise has boasted 12 consecutive quarters of sales increases, and attributes its consistently healthy same store sales in large part to its innovative customer loyalty programs that keep customers coming back for more —and more. The 87-unit franchise, with stores located coast-to-coast, has developed enviable customer initiatives that have caused larger national retailers to take notice of this "retail underdog."

"With the children's clothing industry surpassing the $20.5 billion mark in 2006, the challenge for leading children's retailers is not so much finding customers, but keeping them," said Taylor Bond, President and CEO of Children's Orchard. "Our customer incentive programs, like our ‘Cache Card' and ‘M.O.M.S. Club', have helped generate near double-digit comp store sales increases as current shoppers remain loyal to our quality product and help us grow our customer base through word of mouth about our generous loyalty programs."

When it was launched in 2005, the ‘Cache Card' had an immediate impact. It sent sales soaring throughout the Children's Orchard franchise system. The card is used as a sales incentive during national promotions where customers often receive $10 of store credit for every $30 they spend in the store. Also, the card is used to induce customers to accept in-store credit in lieu of cash for items they sell to the store. Seller bonuses for accepting in-store credit range from 25 percent to 50 percent, and in 2006 alone, the Cache Card is credited with more than $2 million in sales. According to Bond, the card has had a positive impact on cash flow for Children's Orchard franchise owners throughout the country.

Another effective customer loyalty program created by Children's Orchard is its M.O.M.S. Club, with more than 100,000 mothersalready participating and approximately 300 more joining everyday, a significant and powerful customer base considering the buying power of mothers nationwide. The Children's Orchard M.O.M.S. Club rewards members with exclusive after-hours and member-only event invites, gifts for children on their birthdays, and also incorporates the Cache Card into the program at various times of the year.

"The M.O.M.S. Club not only keeps our customers coming back to our stores, but it keeps them coming back on a weekly, or even a daily basis, to see our new inventory and take advantage of new promotions," says Cathy Marks, Executive Vice President of Operations for Children's Orchard. "The M.O.M.S. Club has become so popular that during M.O.M.S. Club exclusive events, we often have moms waiting in lines outside of our stores before the store is set to open."

With 95% of all Children's Orchard stores being owned and operated by women, another factor contributing to Children's Orchards customer retention is the ability for local Children's Orchard owners to relate, and more effectively sell, to their customers. At a typical children's retail store found in malls, a 35-year-old mother with a newborn in tow feels less comfortable seeking advice from the customary teenage employee working at mall-based retail stores.

"Some of our most successful Children's Orchard franchisees were originally Children's Orchard customers," said Marks. "In any type of sales or business practice, the most successful individuals are those that believe in the product. Our Children's Orchard franchisees, predominantly mothers themselves, believe in the Children's Orchard concept."

About Children's Orchard
Founded in 1980, Children's Orchard is the nation's first franchise of gently used and new name-brand children's clothing and accessories. With nearly 100 franchise locations in 25 states, each Children's Orchard location buys and sells quality clothing, toys and accessories in an upscale retail environment. Children's Orchard stores are designed to emphasize quality, value, comfort and commitment to the local community.

View all Children's Orchard Press Releases

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