Loyalty Management Global Market Report 2024

The loyalty management market size has grown rapidly in recent years. It will grow from $9.55 billion in 2023 to $11 billion in 2024 at a compound annual growth rate (CAGR) of 15.1%. Historically, growth can be attributed to a focus on customer retention, card-based loyalty programs, competitive differentiation, data-driven insights, the growth of e-commerce, enhancements in customer experience, and the globalization of markets.

The loyalty management market size is expected to see rapid growth in the next few years. It will grow to $20.3 billion in 2028 at a compound annual growth rate (CAGR) of 16.6%. The projected growth in the forecast period is due to sustainability and ethical practices, real-time engagement, gamification elements, voice and conversational interfaces, and environmental and social responsibility. Major trends expected in this period include personalization and AI, the use of blockchain for loyalty programs, the adoption of subscription-based models, integration of digital wallets, cross-industry collaboration, and the utilization of voice and conversational interfaces.

The surge in cardholders and the utilization of reward points is propelling the expansion of the loyalty management market. Businesses leverage customer loyalty cards as a means to encourage repeat patronage. These cards also furnish insights into customer purchasing behaviors, enabling tailored incentives and rewards. For instance, a 2022 Customer Loyalty Data Survey conducted on 1,276 U.S. consumers by Clarus Commerce revealed that 61% of customers reported switching from their regular brand to another offering better incentives. Furthermore, in India, the banking sector witnessed nearly 1.1 million new credit card additions in September 2021, accompanied by a 57% increase in credit card spending compared to the previous year. Consequently, the increased number of cardholders and the use of reward points significantly drive the growth of the loyalty management market.

The anticipated rise in online shopping is set to drive the growth of the loyalty management market in the coming years. Online shopping, known as e-commerce, involves purchasing goods and services over the Internet. Within this sphere, loyalty management pertains to implementing customer loyalty programs aimed at encouraging repeat purchases and fostering engagement. E-commerce businesses often utilize reward points, discounts, exclusive offers, and personalized promotions to incentivize customer loyalty, enrich the shopping experience, and cultivate enduring relationships with online shoppers. For example, as per the United States Department of Commerce in May 2021, US e-commerce sales experienced a significant surge of 39.0% in the first quarter of 2021 compared to the corresponding period in 2020. Hence, the escalating trend in online shopping is propelling the growth of the loyalty management market.

In loyalty management programs, the trend of investing in analytics and business intelligence tools for effective rewards and incentive schemes is gaining significant traction. Companies within this sector are directing investments towards analytics and business intelligence tools to enable a more targeted approach towards customers. By collecting engagement data throughout customers' buying journeys, companies can gain profound insights into customer behavior, facilitating more effective communication strategies. For instance, in May 2021, Salesforce, a US-based software company, introduced enhancements to its Customer Data Platform (CDP). These improvements focus on ensuring that customer data becomes more intelligent and interconnected, enabling businesses to take more reliable and actionable steps based on this data. CDPs play a pivotal role in ensuring that all accessible channels have access to a unified customer profile, thereby enabling seamless implementation of personalization and relevance in customer interactions.

Prominent companies within the loyalty management market are innovating by introducing solutions such as global loyalty programs to establish a competitive advantage. These global loyalty programs encompass structured initiatives devised by businesses, expanding across international markets with the goal of fostering and sustaining customer loyalty. For instance, in April 2022, InterContinental Hotels Group (IHG), a UK-based hospitality company, rolled out IHG One Rewards, accompanied by an upgraded mobile app. This program introduces a fresh tier system and a bonus-point earning structure aimed at accelerating point accumulation and expediting reward redemption for members. The perks encompass complimentary breakfast for Diamond Elite members, exclusive access to reward night discount promotions, and elevated privileges for Elite members, including early check-in, late checkout, and room upgrades. Additionally, IHG One Rewards introduces Milestone Rewards, enabling members to select rewards every 10 nights, starting from 20 nights stayed. The program aligns with IHG's substantial investment in enhancing guest experiences and bolstering loyalty offerings.

In June 2021, BharatPe, a payments solutions provider in India, purchased Payback from American Express and ICICI Investments Strategic Fund for $27 million. With this acquisition, BharatPe anticipates enriching its customer offerings, driving higher foot traffic at merchants, and catalyzing business expansion. Alongside the goal of establishing a network comprising over 20 million small merchants by 2023, the company aims to strengthen its value proposition for merchant partners. Payback, an Indian-based multi-brand loyalty management company, aligns strategically with BharatPe's objectives.

Major companies operating in the loyalty management market report are Kobie Marketing Inc., International Business Machines Corporation, Oracle Corporation, SAP SE, Salesforce.com Inc., Fidelity National Information Services Inc., CF International Inc., ICF International Inc., TIBCO Software Inc., Maritz Holdings Inc., MicroStrategy Inc., Comarch SA, AIMIA Inc., Blue Ocean Systems, VeriPark, The Lacek Group Inc., Annex Cloud, Capillary Technologies, Kognitiv Corporation, Antavo Limited, Paystone Inc., Apex Loyalty, Bond Brand Loyalty Inc., Brierley Partners, FiveStars Loyalty Inc., Lumata Group, Sailplay, Epsilon Data Management LLC.

North America was the largest region in the loyalty management market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the loyalty management market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the loyalty management market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The main components of loyalty management are software and services. Loyalty management software connects businesses with customers across all touchpoints and tracks individual consumer purchasing patterns across online and offline channels. Various deployment types of loyalty management include cloud and on-premises solutions for organizations such as small and medium-sized enterprises, as well as large enterprises. Loyalty management is utilized in various industries including BFSI, IT, telecommunications, transportation, retail, hospitality, media and entertainment, among others.

The loyalty management market research report is one of a series of new reports that provides loyalty management market statistics, including the loyalty management industry global market size, regional shares, competitors with a loyalty management market share, detailed loyalty management market segments, market trends and opportunities, and any further data you may need to thrive in the loyalty management industry. This loyalty management market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The loyalty management market includes revenues earned by entities by providing loyalty management services and software (e.g., channel loyalty, customer loyalty, and customer retention). The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.