The Global Loyalty Management Market size is expected to grow from USD 10.86 billion in 2023 to USD 23.69 billion by 2028, at a CAGR of 16.88% during the forecast period (2023-2028). A loyalty management system is a marketing automation software used to develop, oversee, and evaluate the effectiveness of loyalty programs.
New York, Aug. 29, 2023 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Loyalty Management Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)" - https://www.reportlinker.com/p06483519/?utm_source=GNW
The Global Loyalty Management Market size is expected to grow from USD 10.86 billion in 2023 to USD 23.69 billion by 2028, at a CAGR of 16.88% during the forecast period (2023-2028).
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. 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.
Key Highlights
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 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.
Loyalty Management Market Trends
The Consumer Goods and Retail Segment to Hold Significant Market Share
The consumer goods and retail segment is witnessing growth due to increasing competition and marketing among consumer goods and retailers. Moreover, digitalization and innovations in 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.
However, it is also an opportunity for many merchants to make a lasting impact by prioritizing their staff and meeting their needs immediately, as actions made in difficult times leave a lasting impression on customers and foster loyalty. Retailers are currently customizing their loyalty programs to offer specialized services to a larger client group to increase their brand value.
The consumer goods and retail industry operates across multiple channels, including physical stores, e-commerce platforms, and mobile apps. Loyalty management programs provide a unified and seamless loyalty experience across these channels. Customers can earn and redeem rewards regardless of the channel they choose, enhancing convenience and encouraging cross-channel engagement.Loyalty management programs have a direct impact on both retail and e-commerce sales within the consumer goods and retail industry. According to Census.gov, USD 1816 billion value retail sales recorded in United States in the second quarter of 2022.
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.
With the help of purchase receipts, leaders in consumer-packaged goods are gaining new consumer insights and bolstering loyalty programs. For instance, in June 2022, Veryfigained notable clients in the consumer-packaged goods (CPG)/loyalty solution market, including a significant retail property management company and a significant consumer rewards marketplace. Veryfiuses artificial intelligence (AI) technology to transform documents into structured data in seconds.
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. In May 2022, Marriott International and Ant Group entered a collaboration agreement to improve their digital operations in the Chinese market. As a result, when Alipay users sign up for Marriott’s renowned loyalty program, the Marriott Bonvoy Rewards Program, they receive several incentives. To further enhance the customer experience throughout its powerful brand portfolio, Marriott International will offer more membership benefits and improvements on goods and services.
The popularity of loyalty programs among consumers is being used by everyone from telecom companies to e-commerce sites to convenience stores in Japan to propel their growth and additional revenue. Notably, hospitality groups are forming strategic alliances with suppliers of loyalty programs to have immediate access to members, enabling them to grow their market share in the nation.
In August 2022, Comarch, an international provider of advanced IT solutions and services for creating and running immersive loyalty programs, partnered with Monstarlab. Monstarlab is a Tokyo-headquartered global digital consultancy that helps some of the world’s biggest brands, such as Alibaba, Fujitsu, Uber, Ferrero, and GLS, run their digital transformation projects. This partnership aims to significantly expand the functional range of the Comarch Loyalty Marketing Platform through specialized mobile and web apps, interfaces with other CMS and e-commerce platforms, and other means.
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 the 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.
Brands and organizations, particularly those in the hospitality, tourist, banking, and retail industries, have employed loyalty and incentive programs in India as part of their marketing strategy. Due to the current slump in the global economy, firms have embraced customer relationship management approaches with a more aggressive attitude to maintain profitable long-term partnerships and secure profit production. Because of their capacity to foster customer relationships, promote product consumption, repeat business, and, most importantly, customer retention in India, loyalty programs are becoming increasingly popular.
Loyalty Management Industry Overview
The loyalty management market is very competitive in nature. The market is highly fragmented due to the presence of various small and large players. All the major players account for a large share of the market and are focusing on expanding the consumer base globally. Some of the significant players in the market are Kognitiv Corporation, IBM Corporation, Oracle Corporation, Comarch SA, and SAP SE, among others. The companies are increasing the market share by forming multiple partnerships and introducing new solutions to earn a competitive edge during the forecast period.
In March 2023, technology company Kognitiv Corporation ("Kognitiv") launched a powerful new AI-driven Kognitiv Pulse. It delivers advanced loyalty management, data activation, and partner collaboration solutions to enable data-driven personalization and optimization of the customer journey across its innovative, omnichannel SaaS platform. The tool allows users to see, side-by-side, how loyalty and non-loyalty customers perform across key KPIs, like purchase frequency and lifetime value.
In July 2022, Tranxactor Group, a leading provider of loyalty services, customer relationship management (CRM), and payment solutions for the retail and hospitality industries, selected Oracle Cloud Infrastructure (OCI) with Enterprise Database Service, enabling the company to provide brands with rich and immersive customer engagement and loyalty programs.
Additional Benefits:
The market estimate (ME) sheet in Excel format
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