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Loyalty Management Market Size, Share and COVID-19 Impact Analysis, By Component (Software and Services), By Deployment (On-Premise and Cloud), By Enterprise Size (Large Enterprises and Small & Medium Enterprises), By End-use (BFSI, IT and Telecommunications, Transportation, Retail, Hospitality, Manufacturing, Media & Entertainment, and Others), and Regional Forecast, 2022-2029

Region : Global | Format: PDF | Report ID: FBI101166

 

KEY MARKET INSIGHTS

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The global loyalty management market size was valued at USD 4.54 billion in 2021. The market is projected to grow from USD 5.57 billion in 2022 to USD 24.44 billion by 2029, exhibiting a CAGR of 23.5% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with loyalty management experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of 22.4% in 2020 as compared to 2019. 


By delivering individualized offers, loyalty management software assists merchants and businesses in retaining customers. The software analyses client purchasing patterns, behavior, historical data, and other factors to give reward points, coupons, discounts, and other incentives to customers interested in the company's products or services. This aids in business growth, sales, and wealth generation. BFSI, hotel, retail, media, and entertainment industries are projected to boost their investment in customer-rewarding solutions. For example, PayU incorporated the Twid loyalty program to better serve its 350+ million customers.


COVID-19 IMPACT


Drastic Change in Consumer Behavior During COVID-19 to Drive Market Opportunities


The COVID-19 pandemic had a beneficial influence on the market in relation to software adoption. Almost all businesses, including retail, hotel, transportation, and banking were disturbed as a result of the countrywide lockdown. During the pandemic, end-users’ purchasing patterns changed dramatically. According to a Ketchum survey, 45% of American shoppers changed their brand choices during the crisis. According to the survey, shoppers switched toward larger e-commerce competitors, such as Amazon, Aldi, Walmart, Target, and others, for basic merchandise. This resulted in the adoption of solutions by merchants.


According to the McKinsey analysis, the shift in consumer attitude is projected to extend beyond COVID-19 impacts. As a result, numerous retailers are likely to invest significantly in loyalty management programs to retain new consumers and win back lost customers. As a result, after the pandemic, the program's demand is likely to skyrocket.


LATEST TRENDS


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Growing Application of Artificial Intelligence for Innovative Solutions to Drive Market Growth


Customer experience and loyalty are inextricably linked. Emerging technologies, such as Artificial Intelligence (AI) and machine learning, have the potential to completely revolutionize loyalty management systems in the future. It may provide merchants with sophisticated insights to improve consumer dialogue, experience, and total sales. Through various analytics, these technologies may forecast human behavior and purchase trends. It is then utilized to target relevant consumers to improve user experience, which is predicted to drive the loyalty management market growth.


AI is capable of monitoring various transactions as well as recognizing and removing fraudsters who may target loyalty point accounts. For instance, in May 2021, Comarch SA launched a new AI-powered reward program for security services. It contributes to increased client confidence in brands by providing data protection and privacy solutions. These tools’ advantageous features are expected to boost the growth of the market even further.


DRIVING FACTORS


Growing Customer Preference for Personalized Solutions to Push Market Growth


Key players have implemented personalization capabilities into their reward programs to draw significant growth from them. This feature aids in attracting customers' attention and improving their overall experience. Customers want individualized advice, discounts, and promotions from companies to profit from them. Such initiatives increase client happiness, which drives their adoption across sectors. Brands may acquire customer attention and trust by making individualized suggestions and offers based on data gathered via multichannel solutions. Many shops are implementing individualized incentive programs due to their numerous benefits. For instance,



  • In April 2021, Schuh, a U.K.-based trendy footwear store, partnered with Salesforce.com to develop its reward program. To attract consumers, the program based on the Salesforce Customer 360 Platform creates customer-centric and customized initiatives.

  • In October 2020, Flooid Hub, a point-of-sale provider, worked with HTK Limited to deliver a tailored incentive system for digital and in-store retail.


Retailers like personalized reward programs as they improve sales, consumer loyalty, web traffic, and profit. This is anticipated to boost the expansion of the loyalty management market share.


RESTRAINING FACTORS


Stringent Government Regulations May Affect the Adoption of Loyalty Programs


The market's expansion may be hampered by strict government regulations. Concerns regarding various federal and state regulations, such as gift certificate laws, trade stamp laws, data security laws, and privacy laws, may limit the implementation of loyalty programs. Many privacy and security standards & regulations limit merchants' access to client information. As a result, businesses are failing to match realistic customer expectations, impacting platform adoption. Various credit card-related rules and laws prevent the banking industry from reorganizing its incentive system, which has an influence on the overall market growth.


SEGMENTATION


By Component Analysis


Growing Demand for Customized and Personalized Program to Boost Software Market Share


On the basis of component, the market is classified into software and services.


Software will dominate the segment share, owing to the capacity of software to detect prospective repeat and loyal customers of businesses, surging its demand. It also aids in the provision of personalized rewards based on client purchasing behavior and purchase history.


Services will experience tremendous growth as more profitable solutions and platforms are used. Client service, campaign management, IT & customer service, and technology service are some of the services offered.


By Deployment Analysis


Affordable Program Designing Solution to Boost Cloud-based Demand


Based on deployment, the market is bifurcated into on-premises and cloud.


The cloud segment will obtain the greatest market share and witness significant growth throughout the predicted period. The cloud deployment strategy offers a variety of devices that are simple to use such as mobile phones, social media, tablets, and many more. The cloud-based software also keeps track of real-time updates on client inquiries and response rates at reasonable pricing. For instance, in March 2021, Comarch SA announced its Loyalty Cloud 1.2 to make management, operations, and build immersive programs more affordable for users. Attributed to the strong security framework, on-premises will demonstrate consistent development.


By Enterprise Size Analysis


Growing Focus on Customer Retention to Drive Large Enterprises Investments in Loyalty Program


Based on enterprise size, the market is bifurcated into small & medium enterprises and large enterprises.


Large firms will dominate the segment share owing to the investments made in loyalty solutions as a result of their large client base and increasing purchase frequency. It increases prospective brand exposure and boosts their market position.


Small & medium-sized organizations would see the highest growth rate throughout the projected period, owing to the rising affordability of cloud-based solutions. For example, to improve consumer engagement and relationships, in September 2020, Epsilon Data Management, LLC introduced PeopleCloud Loyalty, a solution for mid-sized organizations.


By End-use Analysis


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Growing Competition to Drive Reward Program Adoption in the Retail Industry


By end-use, the market is categorized into BFSI, IT & Telecommunication, retail, manufacturing, transportation, hospitality, media & entertainment, and others.


The retail segment will attain a major market share as the industry's strong rivalry is encouraging the development of customer-rewarding solutions. Furthermore, due to increased purchase frequency and as retail business is more transactional, the loyalty program aids in increasing sales and revenue growth.


BFSI will expand rapidly throughout the predicted period. JustBilling, Punchcard, EchoApp, SailPlay, and others are BFSI's rewarding software. Growing competition in the banking industry drives banks to use these solutions to expand and retain their client base. Furthermore, online banking and mobile banking platforms are opening up new possibilities for capturing clients' interests and dedication.


The hospitality sector is also heavily utilizing the rewarding solution to increase client retention by delivering prizes based on their preferences, interests, and spending habits, among other things. Similarly, the transportation, media, and entertainment industries are transitioning toward rewarding software to increase client trust in their businesses.


REGIONAL INSIGHTS


North America Loyalty Management Market Size, 2021 (USD Billion)

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Geographically, the market is fragmented into five major regions such as North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America. They are further categorized into countries.


North America has the largest market share due to the region's retail segment's quick adoption of loyalty management software over the last few decades. Customers in North America prefer monetary incentives such as rebates or payback, free shipping, free items, and product discounts. According to the Oracle 2020 research, 72% of the millennial generation participates in loyalty programs.


Europe will have the second-largest market share over the projection period. Loyalty programs are well-established in several European nations. According to the Nielsen loyalty sentiment study, 66% of Europeans are members of more than one loyalty program. The area is more inclined toward tailored loyalty schemes. According to the KPMG 2019 research, customized offerings were nominated as more valuable programs by 20% of Italians, 15% of Spaniards, and 16% of French respondents.


Asia Pacific is anticipated to grow at a rapid pace throughout the forecast period, as merchants and organizations in the region have shifted their focus to improving customer experience. As modern loyalty program offers are simple to use and reasonably priced, their usage is projected to skyrocket in the future. Due to increased investment from firms, such as WeChat, Tencent, and Alibaba, China controls the revenue share.


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The Middle East & Africa will see a considerable rise in the implementation of loyalty programs. Given the increased usage, in February 2021, Salesforce announced a new loyalty management solution for end-users, such as manufacturing, consumer goods, retail, and travel & hospitality, to enhance customer engagement and trust. Similarly, service firms in Latin America are implementing loyalty programs to enhance consumer engagement and revenue.


KEY INDUSTRY PLAYERS


New Product Development to Boost Market Position of Key Players


Key businesses are focusing on continual product design and portfolio growth with the use of modern technologies such as AI, machine learning, Blockchain, cloud computing, and others. As smartphone penetration grows, several industry participants have begun to provide mobile loyalty management solutions. Cloud-based, real-time analytical management models dramatically improve customer experience. Similarly, the creation of a tailored and personalized loyalty program is projected to boost the key firms' market position. Strategic alliances, acquisitions, and collaborations help market participants improve their financial performance.


March 2021 – Comarch SA developed a new webpage for its loyalty and marketing solutions, including its Loyalty Marketing Cloud to improve functionality and navigation. It is possible for any industry or small firm to start its own loyalty program.


December 2020 – IBM Corporation collaborated with Air Canada to establish the Aeroplan Loyalty Program. It combines cloud-based and mobile online skills to provide a flexible, customized, and loyalty-rewarding experience.


List of Key Companies Profiled:



  • Antavo Limited (U.K.)

  • Capillary Technologies (India)

  • Bond Brand Loyalty (Canada)

  • Comarch SA (Poland)

  • Epsilon Data Management, LLC (U.S.)

  • IBM Corporation (U.S.)

  • Salesforce.com, Inc. (U.S.)

  • Target Brands, Inc. (U.S.)

  • TIBCO Software, Inc. (U.S.)

  • VeriPark (U.K.)


KEY INDUSTRY DEVELOPMENTS:



  • August 2021 – Antavo Limited teamed up with Emakina, a digital agency firm, to provide next-generation loyalty solutions to shopping malls, shops, and brands. The company's solutions are available throughout North America, the Middle East, and Europe.

  • May 2021 – Salesforce launched a new loyalty management tool for end-users, such as manufacturing, retail, consumer products, and travel & hospitality, to increase engagement and trust. It is based on the Salesforce Customer 360 Platform, which provides intelligent solutions for both B2B and B2C clients.


REPORT COVERAGE


An Infographic Representation of Loyalty Management Market

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The loyalty management market report highlights leading regions across the world to offer a better understanding of the user. Furthermore, the report provides insights into the latest industry and market trends and analyzes technologies deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.


REPORT SCOPE & SEGMENTATION


























































  ATTRIBUTE



  DETAILS



Study Period



2018-2029



Base Year



2021



Estimated Year



2022



Forecast Period



2022-2029



Historical Period



2018-2020



Unit



Value (USD billion)



Segmentation



By Component, Deployment, Enterprise Size, End-use, and Region



By Component




  • Software

  • Services



By Deployment




  • On-Premise

  • Cloud



By Enterprise Size




  • Large Enterprises

  • Small & Medium Enterprises (SMEs)



By End-use




  • BFSI

  • IT and Telecommunications

  • Transportation

  • Retail

  • Hospitality

  • Manufacturing

  • Media & Entertainment

  • Others (Consumer Electronics, Grocery)



By Region




  • North America (By Component, By Deployment, By Enterprise Size, By End-use, and By Country)

    • U.S. (By End-use)

    • Canada (By End-use)



  • Europe (By Component, By Deployment, By Enterprise Size, By End-use, and By Country)

    • U.K. (By End-use)

    • Germany (By End-use)

    • France (By End-use)

    • Rest of Europe



  • Asia Pacific (By Component, By Deployment, By Enterprise Size, By End-use, and By Country)

    • China (By End-use)

    • Japan (By End-use)

    • India (By End-use)

    • Southeast Asia (By End-use)

    • Rest of Asia Pacific



  • Middle East & Africa (By Component, By Deployment, By Enterprise Size, By End-use, and By Country)

    • GCC (By End-use)

    • South Africa (By End-use)

    • Rest of Middle East & Africa



  • Latin America (By Component, By Deployment, By Enterprise Size, By End-use, and By Country)

    • Brazil (By End-use)

    • Mexico (By End-use)

    • Rest of Latin America





Frequently Asked Questions

The market is projected to reach USD 24.44 billion by 2029.

In 2021, the market size stood at USD 4.54 billion.

Software is likely to lead the market.

Growing focus on customer experience and retention to drive market growth.

Antavo Limited, Capillary Technologies, Bond Brand Loyalty, Comarch SA, Epsilon Data Management, LLC, IBM Corporation, and Salesforce.com, Inc. are the top players in the market.

North America is expected to hold the highest market share.

Asia Pacific is expected to grow with a remarkable CAGR.

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