GVR Report cover Loyalty Management Market Size, Share & Trends Report

Loyalty Management Market Size, Share & Trends Analysis Report By Component, By Software, By Deployment, By Organization, By Vertical, By Region, And Segment Forecasts, 2021 - 2028

  • Published Date: Aug, 2021
  • Base Year for Estimate: 2020
  • Report ID: GVR-4-68039-504-2
  • Format: Electronic (PDF)
  • Historical Data: 2018 - 2019
  • Number of Pages: 140

Report Overview

The global loyalty management market size was valued at USD 6.79 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 12.3% from 2021 to 2028. The strong emphasis enterprises are putting on enhancing customer experience coupled with the continued adoption of mobile technologies and increasing usage of digital cards such as credit and debit cards is expected to drive the growth. The growing internet penetration rate, the proliferation of smartphones, and rising consumer preference for online shopping are expected to contribute to market growth. Given the ability of advanced AI-based loyalty management platforms to facilitate enhanced analytics and reporting facilities and reward customers intelligently, and subsequently, the growing adoption of loyalty management solutions based on machine learning and AI to enhance the loyalty programs while catering to the growing customer preference for personalization also bodes well for the growth of the market.

U.S. loyalty management market size, by component, 2018 - 2028 (USD Million)

Intensifying competition in almost every industry and industry vertical is prompting enterprises to embark upon various efforts for customer retention and customer base expansion. Enterprises have realized that launching loyalty programs and rewarding customers with loyalty points, certificates, and discounts can typically strengthen customer relationships. Hence, enterprises are aggressively adopting dedicated platforms to manage their loyalty programs. However, stringent government rules and regulations regarding data security and privacy protection, and complexity in data synchronization are restraining the growth of the market.

Engaging customers and encouraging customer loyalty are turning out to be challenging tasks for enterprises in the wake of the continued digitalization and intensifying competition. As such, brands and retailers are focusing aggressively on retaining their customers. Efforts toward this end include launching loyalty programs. At this juncture, loyalty management software solutions can potentially help in managing all the loyalty programs efficiently with less human intervention while ensuring consistent services. Advances in technology and the growing adoption of omnichannel and multichannel programs are also playing a vital role in driving the growth of the loyalty management market.

The COVID-19 pandemic significantly impacted transportation, banking, and the hospitality sector. However, the outbreak of the COVID-19 pandemic had a moderate impact on the growth of the market. The lockdowns imposed in various parts of the world as part of the efforts to arrest the spread of coronavirus limited the product sales; the popularity of e-commerce websites and online shopping gained noticeable traction. As consumers preferred purchasing online in the wake of the lockdowns, sellers embarked upon various efforts to retain their existing customers and attract new ones, thereby driving the adoption of loyalty management programs.

Loyalty programs help in ensuring that customers spend more and consider the same brand while making successive purchases. These programs particularly prove fruitful in terms of revenue generation as the positive experiences shared by the customers with their families, friends, and relatives can consequently trigger the sales. Furthermore, with the intensifying competition among brands, it has become essential for retailers to satisfy their customers and prevent them from switching to other brands. Hence, the growing adoption of loyalty management solutions to achieve customer loyalty is emerging as the primary factor driving the growth of the market.

Component Insights

The component segment is bifurcated into software and service. Loyalty management software dominated the market accounting for over 50% of the overall industry in 2020. Loyalty management software is increasingly being adopted due to the increasing focus on customer experience management and the growing appreciation for online rewards. Organizations have shifted their approach towards the adoption of loyalty management programs and retain insights from the engagement cycle and user experience.

The software segment is anticipated to register the highest CAGR during the forecast period. This is due to the proliferation of mobile technologies, youth showing interest in the rewards, and enterprises inclined towards customer experience management. Furthermore, the growing number of strategic initiatives in terms of mergers and acquisitions and partnership for a product launch or product development are the key indicators that depict the growth potential in the market.

Software Insights

Loyalty software is further trifurcated into customer loyalty, channel loyalty, and customer retention. Amongst which customer loyalty held the largest market share of over 40% in 2020. A loyal customer spends its expenditure on branded products as compared to others. Furthermore, loyal customers share experiences with their family, friends, and colleagues about the brand, which in turn, increasing the company’s sales and generating revenue. Therefore, the adoption of customer loyalty solutions is becoming the primary growth factor. Furthermore, the growing competition among brands and products and service offerings is propelling the growth factor.

The customer retention segment is expected to register the highest CAGR over the forecast period. Post-Covid, the companies are focusing on retaining their customers by implementing a loyalty program. Furthermore, many brands and retail stores are adopting loyalty management to keep their customers. The ability to engage their customers and enhancing their loyalty to the brand is propelling the growth of the market.

Organization Insights

Based on organization, the market has been further segmented into small and medium enterprise and large enterprise. The large enterprise segment accounted for a revenue share of around 60% in 2020. Several leading incumbents of various industries and industry verticals, including BFSI, IT and telecommunications, and hospitality, among others, are aggressively adopting loyalty management solutions. Large enterprises are particularly investing in loyalty management solutions to defend their position in a highly competitive environment.

The small and medium enterprise segment is estimated to register the highest CAGR of 12.8 % from 2021 to 2028. Small and medium enterprises are considered key drivers of economic growth and employment generation. The growing popularity of cloud-based deployment is expected to encourage small and medium enterprises to opt for cloud-based loyalty management solutions over the forecast period. Small and medium enterprises can particularly avoid the high setup costs by opting for cloud-based loyalty management solutions.

Vertical Insights

The retail and consumer goods segment dominated the market in 2020 with a revenue share of more than 20%. Based on vertical, the market has been further segmented into transportation, IT and telecommunication, BFSI, media and entertainment, retail and consumer goods, hospitality, and others. Retailers and consumer goods brands have been launching loyalty programs as part of the efforts to strengthen brand loyalty among consumers and encourage repetitive purchases. Rewarding customers with gifts, discounts, certificates, and loyalty points can potentially strengthen customer relationships, thereby driving the adoption of loyalty management solutions.

The BFSI segment is expected to register the highest CAGR over the forecast period. Advances in technology are prompting BFSI companies to focus on strengthening customer loyalty. Intensifying competition across the banking industry vertical is prompting banks to adopt loyalty management solutions to engage customers, strengthen the relationship with them, and attract new customers. The growing preference for internet banking and mobile banking among customers is opening opportunities for banks to gain customer attention and strengthen customer loyalty.

Deployment Insights

Based on deployment, the market has been segmented into on-premise and cloud. The on-premise segment dominated the market in 2020 with a revenue share of more than 50%. Several companies still prefer on-premise deployment of loyalty management solutions in the wake of the growing concerns over data security and privacy protection. Moreover, on-premise deployment of software also allows companies to manage employee operations and assume control over the overall system and data. 

Global loyalty management market share, by deployment, 2020 (%)

The cloud segment is expected to register the highest CAGR over the forecast period. The cloud-based deployment model can potentially support multiple devices and channels, such as smartphones, tablets, and social media, among others. The growing internet penetration rate and the proliferation of smartphones are driving the volumes of online content being generated by individuals over various channels, including social media. At this juncture, cloud-based deployment of loyalty management solutions is gaining traction owing to the advantages, such as scalability, extensibility, integration, and flexibility, cloud-based deployment can offer. As such, organizations are typically switching either to private or public cloud platforms.

Regional Insights

North America accounted for a revenue share of more than 30% in 2020. North America is home to developed economies, such as the U.S. and Canada. Customers in the region are favoring loyalty-based retail brands. Furthermore, most customers in the region prefer monetary benefits, such as cashback, rebates, and product discounts. All these factors bode well for the growth of the market in the region. The adoption of solutions based on the latest technologies for customer data analytics and real-time reporting and the aggressive investments in AI-based loyalty programs are also driving the adoption of loyalty management solutions in the region. North America is also home to some of the major players operating in the market, such as Aimia, Bond Brand Loyalty, ICG International, Kobie Marketing, and TIBCO software.

The Asia Pacific market for loyalty management is expected to exhibit the highest CAGR over the forecast period. The Asia Pacific is home to some of the fastest-growing economies, such as India and China. Growing preference for mobile technologies and the strong emphasis on pursuing a customer-centric approach to provide value-added services to customers are expected to drive the growth of the regional market. The increasing internet penetration rate and the unabated growth of the e-commerce industry in countries, such as China and India, also bode well for the growth of the regional market. Furthermore, Companies have been adopting various loyalty management solutions and services to attract customers in this region. For instance, In January 2021, Flipkart introduced a digital payment option, SuperCoin Pay, to strengthen its SuperCoin Rewards program. The new program provides rewards and benefits to the customers who will shop on this platform.

Key Companies & Market Share Insights

The market can be described as competitive characterized by the presence of several small and large market players, including Oracle Corporation, SAP SE, BREIRLEY+PARTNERS, Lacek Group, ICF Next, Comarch, AIMIA, and Fivestars. These players are pursuing various organic and inorganic growth strategies, such as mergers and acquisitions, new product launches, and strategic partnerships, to cement their foothold in the market and expand further. For instance, in May 2021, Annex Cloud, a provider of advanced, personalized, and experimental loyalty management solutions, announced expanding its partner ecosystem with the addition of SAP Silver partner Pyxis. The partnership is aimed at providing customer retention loyalty solutions for enterprises. Some of the prominent players operating in the global loyalty management market are:

  • AIMIA

  • BREIRLEY+PARTNERS

  • Comarch

  • Fivestars

  • ICF Next

  • Lacek Group

  • Oracle Corporation

  • SAP SE

Loyalty Management Market Report Scope

Report Attribute

Details

Market size value in 2021

USD 7.85 billion

Revenue forecast in 2028

USD 17.65 billion

Growth Rate

CAGR of 12.3% from 2021 to 2028

Base year for estimation

2020

Historical data

2018 - 2019

Forecast period

2021 - 2028

Quantitative Units

Revenue in USD Million and CAGR from 2021 to 2028

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Component, software, deployment, organization, vertical, region

Regional scope

North America; Europe; Asia Pacific; Latin America; MEA

Country scope

U.S.; Canada; U.K.; Germany; China; Japan; India; Mexico; Brazil

Key Company Profiled

AIMIA; BREIRLEY+PARTNERS; Comarch; Fivestars; ICF Next; Lacek Group; Oracle Corporation; SAP SE

Customization scope

Free report customization (equivalent up to 8 analyst’s working days) with purchase. Addition or alteration to country, regional & segment scope.

Pricing and purchase options

Avail customized purchase options to meet your exact research needs. Explore purchase options.

 

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and analyzes the latest industry trends in each of the sub-segments from 2018 to 2028. For this study, Grand View Research has segmented the global loyalty management market report based on component, software, deployment, organization type, vertical, and region:

  • Component Outlook (Revenue, USD Million, 2018 - 2028)

    • Software

    • Service

  • Software Outlook (Revenue, USD Million, 2018 - 2028)

    • Channel Loyalty

    • Customer Loyalty

    • Customer Retention

  • Deployment Outlook (Revenue, USD Million, 2018 - 2028)

    • On-Premise

    • Cloud

  • Organization Outlook (Revenue, USD Million, 2018 - 2028)

    • Small and Medium Enterprise

    • Large Enterprise

  • Vertical Outlook (Revenue, USD Million, 2018 - 2028)

    • Transportation

    • IT & Telecommunication

    • BFSI

    • Media & Entertainment

    • Retail & Consumer Goods

    • Hospitality

    • Others

  • Regional Outlook (Revenue, USD Million, 2018 - 2028)

    • North America

      • U.S.

      • Canada

    • Europe

      • U.K.

      • Germany

    • Asia Pacific

      • China

      • Japan

      • India

    • Latin America

      • Brazil

      • Mexico

    • Middle East & Africa

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