A customer loyalty program is an ecommerce marketing strategy that rewards customers those loyal to a brand and interacts with it regularly. Customer loyalty programs are designed to encourage repeat purchases by offering discounts, exclusive offers, VIP events, and other benefits to members. They work at customer retention and understanding and analyzing customer behaviours and preferences to further businesses. According to statistics, 80% of the British population is a member of a customer loyalty program.
Customer-Centric Approaches Driving the Market
It is discovered that, in addition to a simple customer focus, creating customer value and putting customers first provides the longest-lasting business value, regardless of time. Because the goal of loyalty management is to reward a company's repeat customers, developing customer-centric strategies has become necessary to maintain a high customer retention rate, driving the demand for loyalty management programs.
Through loyalty platforms, key players have implemented personalization features. It helps to capture the attention of customers and improve their overall experience. Personalized recommendations and coupons from brands attract customers. Customer satisfaction rises because of these programs, which drives their adoption across industries. According to Annex Cloud, 33% of consumers abandon a brand that lacks personalization.
Technological Advancements Boost the Market
The rate of technological advancements, whether artificial intelligence (AI), the internet of things (IoT), or digital reality, is directly proportional to the growth of the global Loyalty management software market. Over 20 billion devices are expected to be connected to the internet in the next two years. With hundreds of devices connecting to the internet every second, the global digital transformation in various industries is expected to provide value-producing opportunities in the global Loyalty Management Software Market, which is expected to grow significantly over the forecast period.
Thanks to technological advancements, we can now use artificial intelligence (AI) and machine learning (ML) to analyze and analyze consumer behavior using improved algorithms. In loyalty programs, AI and machine learning improve the customer experience and influence purchasing habits. According to Bond, 95% of customers want to use emerging technology like chatbots, AI, VR, and smart devices to interact with their loyalty program.
|Market Size||USD 1,820 Million by 2030|
|Forecast Units||Value (USD Million)|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, and Trends|
|Segments Covered||Deployment, Enterprises, Applications, Regions|
|Geographies Covered||North America, Europe, Asia-Pacific, LAME and Rest of the World|
|Key Companies Profiled/Vendors||Apex Loyalty, CitiXsys Americas Inc, Comarch, CityGro, Inc., Influitive Corporation, SiEBEN Yotpo, Ltd., Tango Card, Inc., Oto Analytics, Inc., Zoho Corporation Pvt. Ltd., and Loyverse|
|Key Market Drivers||Customer Preference for Advanced Solutions and Personalization Driving the Market|
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Cloud Sub-Segment Accounts for Large Market Share
The market is divided into two segments based on deployment: on-premise and cloud. Cloud-based customer loyalty management software provides a network-based solution accessible from any location with an active internet connection. Integrating with third-party solutions is usually easier. The cloud deployment model supports various devices that are simple to use, such as tablets, mobile phones, social media, and many others. The cloud-based software allows real-time updates on customer queries and response rates at reasonable prices. Furthermore, they help organizations with scalability and ease of access to organizational content, regardless of employee location, assisting with business continuity.
Market Growth due to Large Enterprises Funding for Increased Customer Retention
According to the enterprise size, the market is divided into two categories: small & medium (SMEs) and large. Large businesses are investing in customer loyalty solutions due to their large customer base and higher purchase frequency. It provides the brands with potential publicity and strengthens their market position.
Loyalty is more important than ever to businesses in various industries, particularly those that are heavily consumer-driven, such as retail, financial services, and hospitality. According to "Loyalty Big Picture," more than 71 % said they spend at least 2% of total revenues on loyalty and CRM to activate customers and leverage the data asset to create personalized offers and extensions, with the majority spending more than 4%.
Impact of COVID-19
When it comes to customer-brand interactions, COVID-19 has changed nearly everything. The pandemic has upended traditional strategies and tactics that brands have used to engage with customers, deliver an exceptional experience, and earn loyalty and repeat purchases. The retail world has majorly moved to the online space during the pandemic. Online grocery sales increased by 40% year over year, prompting retailers such as Wegmans to rethink their brick-and-mortar expansion plans. Customers' digital engagement exploded, while in-store foot traffic slowed significantly, with brands such as Chipotle seeing a 134% increase in digital orders and increased app-based engagement year over year. The need for customer loyalty software also rose significantly to understand and analyze the new online behaviors of customers and hence driving the market upward.
Presence of Key Players and Advanced Infrastructure Resulting in North America’s Large Market Share
North America offers a wide range of opportunities for the global customer loyalty software market due to its technologically advanced infrastructure, widespread adoption of loyalty programmers, and strong presence of several established enterprises in developed countries such as the U.S. and Canada. In the United States, the majority of customers have loyalty cards. According to Accenture, there are 3.3 billion loyalty memberships in the United States.
The Asia-Pacific loyalty market is expected to grow exponentially during the forecast period. The Asia Pacific is home to some of the world's fastest-growing economies, including India and China. In Asia-Pacific developing countries, a whopping 92 % were in the favor of loyalty programs. Because maximum consumers in developing markets are middle-class, they are more price-conscious. They prefer incentives such as loyalty cards because they believe they will benefit them financially in the long run. They do not switch brands often, so loyalty programs are ideal for them, necessitating the customer loyalty management software.
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