Loyalty Program Evolution

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Loyalty Program Evolution

Key Takeaways

  • Personalization is projected to play a key role in driving customer loyalty. According to Antavo, a loyalty management platform, "offering a more personalized experience to customers while shopping in-store highly strengthens the emotional bond with them."
  • This year and in the coming years, loyalty programs are expected to take advantage of NFT offerings. This will include gamifying engagement and experiential redemption offerings.
  • Mobile acquisition can be used to make it easier for customers to join a loyalty program. Some retailers such as Madewell even added a "mobile number on their website to drive registration."

Introduction

This research presents insights surrounding how retail loyalty programs are predicted to evolve in the next 2 to 3 years. The details are outlined below.

Personalization Will Play a Key Role in Driving Loyalty

  • Forrester's research revealed that online shopping is expected to increase by "27% of overall retail sales by 2023." Retail loyalty programs have played a major role in online shopping customer retention.
  • Personalization is projected to play a key role in driving customer loyalty. According to Antavo, a loyalty management platform, "offering a more personalized experience to customers while shopping in-store highly strengthens the emotional bond with them."
  • BGC also reports increasing personalized offers by 25% out of mass promotion spending "would increase ROI by 200%." This is equivalent to over $70 billion of top-line growth opportunities each year.
  • Antavo's Global Customer Loyalty Report 2022 has also shown that 29.3% of retailers' most important investment in the coming years would be personalization.
  • In addition, Retail Customer Experience revealed that about 48% of consumers would be willing to share personal data in exchange for personalized rewards.

Loyalty Programs with Mobile Engagement

  • The yearly mobile commerce sales are projected to double from 2022 to 2025. In conjunction with this, loyalty programs are expected to offer "exceptional service and trust using mobile engagement's easy sign-up, convenient access to member account information, and multiple options for information delivery."
  • Mobile acquisition can be used to make it easier for customers to join a loyalty program. Some retailers such as Madewell even added a "mobile number on their website to drive registration."
  • About 79% of Americans also shared that "they are more likely to join a rewards program" if it doesn't require the carrying of a physical card. This consumer trend is expected to grow in the coming years.
  • Retailers can issue mobile wallet loyalty cards to "provide a persistent brand presence on consumers' mobile devices."

Loyalty Programs Will Make Use of NFTs

  • According to Jim Mattson, a senior technology partner at ICF, "Loyalty programs will tap into NFTs to engage and reward."
  • This year and in the coming years, loyalty programs are expected to take advantage of NFT offerings. This will include gamifying engagement and experiential redemption offerings.
  • An example of this would be a frequent hotel guest "being rewarded with the opportunity to own a unique digital NFT of that hotel exclusive to them as a top staying guest."
  • NFTs are expected "to become increasingly mainstream in loyalty programs."

Ruohonjuuri Delivered Highly Personalized Loyalty Experiences

  • Ruohonjuuri is an e-commerce store and retail chain specializing in organic food, natural cosmetics, and other health products. It was founded in Finland.
  • Ruohonjuuri used to have manual loyalty stamp cards, which the company converted into points "for writing reviews and submitting photos and videos within their reviews."
  • This resulted in a "350% increase in review collection."
  • In addition, the repeat purchase rate of loyalty redeemers became 175% higher than that of non-redeemers.

Claire's Rewards Offers Birthday Surprises and Free Shipping

  • Claire's Stores, a jewelry and accessories retailer, launched Claire's Rewards loyalty program in the UK in September 2021.
  • Claire's Rewards is a free-to-join program that offers "rewards for shopping and engaging with the brand."
  • The loyalty program also offers cash rewards, discounts, exclusive member privileges, birthday surprises, and free shipping twice a year.
  • Claire's also leveraged personalization capabilities to offer unique customer perks and deals. Since this loyalty program was just recently launched, there are no publicly available success metrics yet.

IT Vendors Can Strengthen E-Commerce Architecture

  • IT vendors can help strengthen the e-commerce architecture of retailers. Woolman, Europe's largest Shopify Plus agency, helped Ruohonjuuri establish a stronger e-commerce architecture.
  • Woolman helped launch retailer Ruohonjuuri's new English-language site. This helped encourage customers to leave reviews.
  • This resulted in a 183% conversion rate for customers who interacted with reviews.

Yotpo Helped a Retailer Understand the Correlation Between Reviews and Loyalty

  • Yotpo helped retailer Ruohonjuuri understand the correlation between Loyalty and Reviews.
  • This resulted in increased reviews collection rates for Ruohonjuuri. It increased by 350%.

Research Strategy

For this research on loyalty program evolution, we leveraged the most reputable sources of information in the public domain, including Antavo, Retail Customer Experience, ICF, The Drum, PR Newswire, and Claires.

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