Yahoo Finance The Global Loyalty Management Market was valued at USD 8.75 billion in 2021 and is expected to grow at a CAGR of 16.88% during the forecast period (2022-2027
). A loyalty management system is a marketing automation software used to develop, oversee, and evaluate the effectiveness of loyalty programs. Solutions for loyalty programs can be integrated into the company CRM system as a built-in feature or as a separate platform.
New York, Sept. 27, 2022 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Global Loyalty Management Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)" - https://www.reportlinker.com/p06321492/?utm_source=GNW
The information required to operate customized loyalty programs is retrieved from data sources through API, and the chosen front-end receives the information from the loyalty software.
- Customer data drive loyalty programs. Understanding the spending habits and behaviors of the outreach is critical to understanding how to retain consumers. Personalization fosters a closer relationship or uses data to tailor offers, communications, and rewards to specific customers. The primary factor in the success of a loyalty program is providing a positive customer experience and making the program simple to use, engage in, and enjoy.
- A customer-centric organization expands by increasing the wallet share within its customer segment and entering new markets to target similar customers. As loyalty management revolves around pleasing/rewarding an organization’s repeat customers, developing customer-centric strategies has become necessary to keep the customer retention rate high, thus driving the demand for loyalty management programs.
- The intensity of the competition between firms has increased the cost of customer acquisition. Gaining a customer is neither free nor is it cheap. It is a necessary expense that adds to the total cost while running a business and may lead to overspending.
- Lack of awareness about loyalty programs can hinder the growth of the loyalty management market. It has been observed that many members of loyalty programs lack an understanding of their point balance and the absence of a redemption goal.
- The COVID-19 pandemic significantly increased the demand for e-commerce, especially online groceries, due to changing consumer consumption patterns and rapid adoption of omnichannel distribution models, which are expected to create a demand for customer-centric solutions. In the post-COVID era, businesses must acknowledge that online presence is required to remain relevant. Retail loyalty programs are distinctive as they need simultaneous management of technology, strategy, and corresponding hardware to obtain a comprehensive picture of customers.
Key Market Trends
Consumer Goods and Retail Segment to Hold Significant Market Share
- The consumer goods and retail segment was valued at USD 2.11 billion in 2021. This segment is witnessing growth due to increasing competition and marketing among consumer goods and retailers. Moreover, digitalization and innovations in the Loyalty programs are also making them easier to use and increasing their spread among smaller retailers.
- Over the years, retailers implemented various strategies to increase consumer loyalty in their operations. These include several loyalty programs, discounts, and incentive opportunities. A change in the use of old approaches has been brought about by digital disruption and new influencing techniques. Retailers can now more easily collect consumer data and create individualized strategies for enticing customers to make more purchases.
- The COVID-19 pandemic impacted the retail industry in several ways due to lockdowns in numerous countries and the possibility of contamination in physical stores. Once lockdowns were lifted and stores reopened, there was an excessive reliance on internet channels for purchasing. This shift in consumer consumption patterns, aided by the accessibility of affordable and dependable internet, made it difficult for companies suffering from lost sales to remain relevant to their devoted fans during this time.
- Retailers and companies that produce consumer goods face numerous challenges. Therefore, to be in charge, they prioritize going digital first. With a digitally focused loyalty program, brands can start collecting customer data that they can utilize to deliver individualized experiences when it matters. By engaging with customers at key points, consumer product companies can generate significant revenue, cross-sell, and upsell possibilities.
- Consumer packaged goods (CPG) companies historically found it difficult to build direct relationships with their consumers and were forced to piece together inconsistent data from various retail partners to understand consumer preferences, lifetime value, and marketing ROI. CPGs forge close bonds with their customers through loyalty programs, which also help them identify previously anonymous customers.
Asia Pacific is Expected to be the Fastest Growing Market
- The rise in loyalty programs by the different firms in the region will drive the loyalty management platform so that firms can track loyalty programs. For instance, in September 2021, The New Value, New Experience, New Pleasure—China Eastern Airlines New Loyalty Program was offered by the airline. A brand-new membership upgrade, a brand-new points accumulation system, a brand-new point exchange method, a brand-new product series, and a brand-new service platform are among the five highlights of the "Eastern Miles" membership system, which was just published worldwide. The core of the new membership system is the framework transition from a "mileage-based" to a "revenue-based" points accumulation system. Through this, the company is committed to building a brand-new customer-centered service platform and enabling more cross-border and cross-industry partners to participate in the aviation value chain.
- According to the China Internet Network Information Centre, in China, 842 million people had made online purchases as of December 2021, an increase of 38% of online shoppers from 2018. Such a rise in online purchases will allow e-commerce platforms and other brands to provide loyalty programs to increase their profit margin. This will lead to the deployment of loyalty management platform tools so that online retailers can design loyalty programs and implement them.
- The increase in loyalty programs by the different firms in the region is expected to drive the loyalty management platform so that firms can track loyalty programs. For instance, in June 2022, Japan rewards those who live a more environmentally friendly lifestyle by using ridesharing services, investing in energy-efficient household appliances, or avoiding single-use plastics. The program is a part of a broad government effort to assist several businesses, including e-commerce behemoth Rakuten Group Inc. and mall operator Aeon Mall Co., who are extending loyalty point programs to encourage customers to make greener purchasing decisions. The extensive program is Japan’s most recent attempt to convince people that they must adjust their habits to combat climate change.
- Global rewards platforms are extending their presence in Japan as the country’s market for loyalty programs grows year over year to increase their market share globally. For instance, in October 2021, one of the most popular rewards platforms in the world, Miles, revealed that it is expanding its reach abroad by introducing its service in Japan. Notably, the network has grown quickly and now provides users with 500 customized rewards from 360 brands. The introduction of Miles in Japan is an important step in that direction.
- Due to the rise in demand for loyalty programs in the region, many startups are entering the loyalty management platform market to provide services to different industries. For instance, in February 2022, Giift and Apis Partners invested USD 30 million in loyalty solutions provider Xoxoday, an India-based company. The partnership will allow Giift and Xoxoday to expand their service portfolios and accelerate their global expansion, and the investment comprises both primary and secondary capital components.
Competitive Landscape
The Global Loyalty Management Market is very competitive in nature. The market is fragmented due to the presence of various small and large players. All the major players account for a large share in the market and are focusing on expanding the consumer base across the world. Some of the significant players in the market are IBM Corporation, Oracle Corporation, Comarch SA, SAP SE, Epsilon Data Management LLC, Fidelity National Information Services Inc., TIBCO Software, and many more. The companies are increasing the market share by forming multiple partnerships, investing in introducing new solutions, to earn a competitive edge during the forecast period.
- April 2022 - Comarch SA was chosen by Universal Drugstore to launch the new wellness rewards loyalty program. Universal Drugstore partnered with Comarch on Loyalty Program. The wellness rewards loyalty program allows members to earn points with every purchase, which can be used to discount future orders march loyalty program is a go-to choice due to its extensive experience developing loyalty-specific software and services.
- January 2022 - SAP SE and Dunnhumby formed a strategic partnership. The partnership will help retailers make faster, customer-led decisions and deliver a more personalized shopper experience at home and in-store. The retailers can benefit from this by better knowing customer insights and turning them into clear actions to simplify and elevate everyday business processes and look ahead to build better connections.
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