CAGR: 9%Current Market Size: USD 8 BillionFastest Growing Region: APAC
Largest Market: North AmericaProjection Time: 2022-2029Base Year: 2021
The Global Loyalty Management market is expected to grow from USD 8 billion in 2021 to USD 15.94 billion by 2029, at a CAGR of 9% during the Projection period 2022-2029. The growth of this market is mainly driven owing to increasing development in the end-user industry around the world.
The strategy, resources, and procedures that business uses to attract, engage, and keep consumers are together referred to as loyalty management. It assists brands in choosing the appropriate demographic to target before offering rewards, experiences, and perks that encourage sustained engagement. Comprehensive loyalty management encompasses a variety of components in addition to the loyalty program itself, such as the design of the program the rewards and benefits mix, technology improvements, creative services, member communications and marketing, member acquisition strategy, billing engine (in the case of a premium loyalty program), branded customer service, client services, and loyalty program optimization. While some stores manage these components internally, properly managing all of them might require a significant investment in time, money, and experience. Because of this, the majority of merchants opt to outsource some, if not all, of these components to reputable loyalty management firms. However, not all of these businesses were made the same. You'll want to cooperate with the one that fits depending on your requirements. Additionally, there are numerous varieties available.
Sample Request: - Global Loyalty Management Market
Market Dynamics:
Drivers:
Businesses are investing in their customer loyalty management programs more than ever. At the moment, managing consumer loyalty involves expensive, intricate, and lucrative programs. For instance, in 2015, companies in the US spent approximately $2 billion on loyalty initiatives. These funds were primarily used to achieve the KPIs for program expansion and revenue generation. Additionally, during the projection period, factors such as increased urbanization, industrialization, and the increase in end consumers worldwide have all contributed to the market's overall growth. Additionally, it is projected that the market's growth rate would be fueled by the expanding trend of e-commerce shopping and rising per capita income.
Restraints:
The General Data Protection Regulations (GDPR), which first came into effect on May 25, 2018, must be understood by businesses. The importance of GDPR compliance is highlighted by the fact that loyalty management programs are the most effective way to acquire consumer data. The primary aspects of the GDPR that are affected include the definition of personal data, permission, communications between partners and enterprises, and information withdrawal. As a result, compliance with appropriate data protection regulations is essential given the possibility of severe penalties to firms' bottom lines.
Opportunities:
Loyalty management solutions use big data analytics to automate customer experience activities. The most recent analytics tools have been designed to take into account social media platforms and customer interactions with the business. There is a profusion of unstructured customer data available on mobile, wearable, web, and social media platforms. If appropriately updated, this data should aid businesses in making better strategic choices regarding their products in light of the changing market dynamics.
Challenges
A threat to client financial data may put the market's growth pace in jeopardy. It will be difficult for the market to experience a steady increase in market value due to a shortage of expert knowledge and technical expertise, particularly in developed and developing economies as well as among management level people. Furthermore, the market growth rate will once again be hampered by the lack of a sophisticated IT infrastructure.
Segmentation Analysis:
The global loyalty management market has been segmented based on component, deployment, organization, industry, and region.
By Component
The component segment is software and services. The software segment led the loyalty management market with a market share of around 53% in 2021. The firm now relies heavily on loyalty management software due to its increased emphasis on customer experience management. In order to evaluate the effectiveness of email marketing efforts, customer loyalty software is crucial. Organizations are implementing a loyalty management system and holding on to user experience and engagement cycle insights. The use of loyalty schemes aids the firm in keeping track of information from all points of contact, including brand advertising, point of sale, online payment processing, and customer feedback. The data gathered from the touchpoints are used to create programs that would provide a better user experience.
By Deployment
The deployment includes on-premise and cloud. The on-premise segment led the loyalty management market with a market share of around 69% in 2021. The main reasons for the on-premise deployment of the software are worries about data security and employee and customer privacy. Additionally, deploying software on-premises enables businesses to govern staff activities and the whole system and data.
By Organization
The organization includes large enterprise and small and medium enterprise. The large enterprise segment led the loyalty management market with a market share of around 59% in 2021. Loyalty management systems are being adopted more frequently by a number of businesses and their verticals, including BFSI, IT & telecommunications, retail & consumer goods, and media & entertainment. To strengthen their position in a highly competitive climate, large businesses are investing particularly heavily in loyalty management systems.
By Industry
The industry includes BFSI, hospitality, retail & consumer goods, transportation, and others. The retail & consumer goods segment led the loyalty management market with a market share of around 59% in 2021. Retail and consumer brands heavily rely on a loyalty program to engage with customers and motivate them to make repeat purchases. Organizations typically employ loyalty programs including coalition loyalty programs, point programs, cash-back programs, loyalty punch card systems, and loyalty programs with tiers. By offering them discounts, gift coupons, and redeem codes, the various program appeal to various customer categories.
By Regional Analysis:
The regions analyzed for the loyalty management market include North America, Europe, South America, Asia Pacific, the Middle East, and Africa. The North America region dominated the loyalty management market and held a 38% share of the market revenue in 2021.
Global Loyalty Management Market- Country Analysis:
Germany's Loyalty Management market size was valued at USD 0.62 billion in 2021 and is expected to reach USD 1.06 billion by 2029, at a CAGR of 7% from 2022 to 2029.
Customers were and are more interested than ever in discounts and coupons in Germany as a result of the outbreak. Customers of PAYBACK, one of Germany's top incentive programs providers, accrued points worth EUR473 million in 2020, an increase of EUR20 million over the previous year, according to PAYBACK. The high rate of redemption shows that during the pandemic, Germans benefited from the prizes and coupons distributed within its extensive partner network.
China Loyalty Management’s market size was valued at USD 0.81 billion in 2021 and is expected to reach USD 1.56 billion by 2029, at a CAGR of 8.6% from 2022 to 2029. China's e-commerce business has expanded quickly over the past two to three years, and the country's loyalty and rewards program market has also seen substantial expansion during this time. Notably, loyalty programs have begun to be offered by e-commerce platforms across several product categories in an effort to increase market share and revenue. When compared to western standards, these programs gave e-commerce players good outcomes.
India's Loyalty Management market size was valued at USD 0.61 billion in 2021 and is expected to reach USD 1.12 billion by 2029, at a CAGR of 8% from 2022 to 2029. Market expansion in India is also being fueled by the expanding use of loyalty and rewards programs across various sectors. Airlines, quick-service restaurants, and retailers all provide loyalty and rewards programs to entice new consumers and fuel their expansion across the nation. Notably, in order to compete with local firms in India, international brands like KFC and Starbucks have also introduced their own loyalty programs.
Key Industry Players Analysis:
To increase their market position in the global loyalty management business, top companies focus on tactics such as adopting new technology, mergers & acquisitions, product developments, collaborations, partnerships, joint ventures, etc.
Latest Development:
Report Metrics
Report Attribute |
Details |
Study Period |
2021-2029 |
Base year |
2021 |
CAGR (%) |
9% |
Market Size |
8 billion in 2021 |
Projection period |
2022-2029 |
Projection unit |
Value (USD) |
Segments covered |
By Component, By Deployment, By Organization, By Industry, and Region. |
Report Scope |
Revenue Projection, competitive landscape, company ranking, growth factors, and trends |
Companies covered |
Epsilon Data Management, LLC., Brierley+Partners, Merkle Inc., Oracle, BOND BRAND LOYALTY INC., Yotpo Ltd., Comarch SA., Cheetah Digital, Sailplay, Jakala, ICF International Inc., Five Stars Loyalty, Inc., Zinrelo, Maritz Motivation Inc., AnnexCloud, Apex Loyalty, Punchh, Inc., among others |
By Component |
|
By Deployment |
|
By Organization |
|
By Industry |
|
Regional scope |
|
Scope of the Report
Global Loyalty Management Market by Component:
Global Loyalty Management Market by Deployment:
Global Loyalty Management Market by Organization:
Global Loyalty Management Market by Industry:
Global Loyalty Management Market by Region:
Global loyalty management market value in 2021 was USD 8 billion.
The CAGR value for the loyalty management market is 9% from 2022 to 2029.
Leading market players active in the global loyalty management market are Epsilon Data Management, LLC., Brierley+Partners, Merkle Inc., Oracle, BOND BRAND LOYALTY INC., Yotpo Ltd., Comarch SA., Cheetah Digital, Sailplay, Jakala, ICF International Inc., Five Stars Loyalty, Inc., Zinrelo, Maritz Motivation Inc., AnnexCloud, Apex Loyalty, Punchh, Inc.
The possibility of data theft is primarily impeding the growth of the loyalty management market.
Introduction of advanced technologies around the globe is projected to influence the market in the Projection years.
Political Factors- More weight is placed on the political factor influencing the loyalty management business. The government can impact the sector in a number of ways. Elections in nations like the USA, Germany, India, and others are regarded as fair and transparent, and there is a strong democratic system in place. In the USA, there is a presidential democracy where the people pick one person to serve as both the head of state and the head of government. The political climate carries a number of risks. Trade restrictions, exchange restrictions, and monetary controls are a few of the risks. Companies must exercise extreme caution while trading with other nations because else, they risk running into issues.
Economical Factors- In contrast to the political-economic atmosphere, economic issues have a direct impact on the loyalty management sector and can have long-term consequences. There are various ways in which this could show up. For instance, rising inflation has an impact on product prices. It also has to do with how much purchasing power a company's clients possess. If this is broken, it may be disastrous for business. An important part of economic forces is played by interest rates, trends in economic growth, and currency exchange rates. It shouldn't be disregarded.
Social Factor- Contrary to popular belief, the social environment has a significant impact on the market. The social backdrop of business is shaped by a number of variables, including demographics, societal trends, and population data. Social influences change with time. A thorough analysis of local norms and customs is essential when organizations look to grow, especially in new markets, as it lowers the risk of failure in the early stages. The steady views toward leisure offer businesses the chance to create goods that can cater to consumer desires. The business may, for instance, expand its investment in developing new products.
Technological Factors- A software environment is a coordinated set of technological elements that meets the needs of its users and the system's owner. Businesses face risks, opportunities, and challenges as a result of technological change. Some organizations can take use of evolving technology to enhance existing goods and procedures or even develop brand-new goods and procedures that will increase markets and revenues. The demands (requirements) from the loyalty management sector are developing more quickly as technology advances day by day. The following technological external variables must be incorporated by suppliers of loyalty management into their strategies: the quick uptake of mobile technology, the expansion of online services, and business automation.
Environmental Factors- Due to consumers' growing demand for eco-friendly items, the loyalty management industry has the chance to improve its sustainable status. For instance, the suppliers may create more eco-friendly items and employ more green energy throughout their operations. In this regard, the industry's initiatives to enhance its sustainability directly address the opportunity resulting from society’s growing attention to business sustainability. A further environmental external element that the company can use as a foundation for increasing the usage of recycled materials in its computer hardware and software products and packaging is the growing availability of recyclable materials.
Legal Factors- The opportunity for the loyalty management sector to adopt more efficient recycling and disposal programs that boost brand perception is presented by growing electronic waste disposal rules. However, this external legal threat poses a risk that could make it harder for the market to address the environmental impact of its operations. On the other side, by gradually lowering problems like computer software piracy, the evolving patent rules support sectors' international expansion. The business has the chance to improve its goods in order to assist client businesses in using more energy-efficient computing techniques to lower their energy consumption.
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