You need to know that I'm not only a content marketer, but I'm also a customer. When the COVID situation came up, I started to appreciate convenient online buying processes, and if something disrupts my experience, I simply walk away. The same goes the other way — if I find something exciting in an online store, I stick with it because it makes me feel good.
I realized that every online purchase I've made so far has ended up using my loyalty card. Saving a purchase transaction and reaping additional benefits from it is very important to the customer. Also, I noticed that eCommerce websites use different mechanisms and strategies to make me buy more things, more often, and in different combinations. Admittedly, online stores proved to be creative.
So, I decided to take a closer look at them and did some groundwork along with searching customer communities. All this is to find the top 10 eCommerce loyalty programs and determine what makes them stand out. Now you can quickly review these loyalty system features that are key to eCommerce success, and possibly yours soon.
Key takeaways
- The Top three eCommerce industry trends are mobile commerce, hyper-personalization, and microservices and PWA.
- Two pressing challenges facing eCommerce businesses are many one-time buyers and higher churn risk.
- Best loyalty program features for eCommerce businesses are simple rules, integrated into the eCommerce experience, mobile friendly and responsive, engaging users across all channels, well-presented in the offline world, and personal touch.
- eCommerce loyalty programs are essential for customer retention, increased sales, and competitive advantage.
- Businesses should consider the various types of loyalty programs when designing their own, focusing on key elements such as rewards and user experience.
- Strategies to boost engagement include tailored marketing, gamification, and exclusive benefits. Measuring and optimizing can help identify areas of improvement.
How is the eCommerce industry changing?
The eCommerce industry grew quite rapidly and actually skyrocketed with the emergence of COVID. People had no choice but to shop online to satisfy their practical and emotional needs. The next part will be all about reliable data, so buckle up because the numbers and insights are mind-blowing.
The eCommerce industry's growth line
According to Shopify insights, around 17.8% of sales came from online purchases two years ago. That number is expected to reach 21% by 2022 and translate into $5.55 trillion. Growth seems to continue, reaching 24.5% by 2025. I think Shopify's predictions are accurate because they serve over 1,000,000 eCommerce businesses and can clearly see trends related to customer lifetime value.
Now you may be wondering how online customer visits translate into profits. Well, I dug deeper into the data provided by Global eCommerce Update 2021 and discovered that in 2020, eCommerce sales accounted for 27.6% of retail purchases worldwide, reaching an estimated $4.28 trillion. It'll come as no surprise to add that online shopping is gaining popularity, and by 2023 eCommerce will contribute over $6.5 trillion in sales, making up 22% of all global retail sales. This trend may even change if online companies start implementing eCommerce loyalty programs, which in many cases guarantee high customer retention rates.
Top three eCommerce industry trends
Until recently, stores' life and growth cycle were clear — first, you invest in a brick-and-mortar store. Then, if there's high customer demand, you can open an eCommerce store to become ever more approachable. However, conventional stores seem to be insufficient for modern consumers, especially since their operating models don't fit the three visible and strong trends I'll list below. For this reason, business owners create "pure eCommerces" that operate exclusively online from the very start.
1. Mobile commerce
mCommerce, or mobile commerce, is the buying and selling of products and services through wireless portable devices, such as smartphones or tablets. In 2018, mobile retail sales exceeded $148 billion and are still on the rise — experts predict that mCommerce sales will surpass $432 billion in 2022. Undoubtedly, customers are increasingly using mobile devices to buy goods. It's convenient and, in most cases, quicker — you can filter through everything you want without spending minutes wandering the aisles.
As people are clearly changing their mobile behaviors and are eager to make purchasing decisions with their smart devices, companies are focusing on technological advancements in this area, such as 5G wireless technology, branded shopping apps, social commerce, and customer community platforms to make the mobile shopping experience the best it can be.
2. Hyper-personalization in eCommerce
Let's start with the fact that 80% of frequent shoppers only buy from brands that personalize their experience. People like to feel that someone cares about them, and personalization can give them that feeling.
In physical stores, salespeople cannot spend too much time with one customer because it's inefficient. Worse, sometimes existing customers just don't want to be bothered and wish to be left alone in their journey. This is nothing but a missed opportunity to convince them to buy your goods, which is why an online store gives you an edge and allows you to provide a personalized experience to every customer who visits you.
When you run your own online store, you can get so much data about your shoppers to increase ROI, conversion rates, Average Order Value (AOV), and sales. Take advantage of it! Conduct deep data mining, analyze datasets, and use artificial intelligence tools to uncover incredible insights. You truly have everything you need to track your customers' buying behavior and customize their journey.
Turning data into knowledge allows you to create a hyper-personalized customer experience. And I'm not talking about a single shopper, but a whole customer base. An eCommerce store will enable you to develop individual strategies, influence shoppers' decisions, retain existing customers, tailor your products or services to their needs, and create stronger bonds.
3. Microservices and PWA
The more prominent players know that the eCommerce industry is moving toward APIs, microservices, and progressive web applications (PWAs), and I hope you're already on to that. Microservices architecture can definitely give your online store the flexible foundation you need to grow as a business.
If you move to headless eCommerce, you can scale the front-end and back-end individually. Also, a microservice-based store is the backbone of a decentralized development process. Simply put, it's easier for your development team to cooperate and fine-tune your codebase to deliver new eCommerce features to the market. Last but not least, you can add only those microservices to your technology stack that will serve specific business purposes. No more useless functionalities and technology debt that is hard to work on.
Progressive web apps are another, but also noteworthy, eCommerce store development approach. First, you can use your PWA to hit a wide audience since they're designed to work for any user, regardless of their preferred platform. Also, you can save a lot of money and time because you don't have to create separate shopping apps for Android, iOS, and Windows 10 in addition to your online store. Another advantage of PWAs is that they're extremely fast, reducing the chances of abandoning your eCommerce and ensuring a 36% higher conversion rate than native apps.
Two pressing challenges facing eCommerce businesses
So far, so good, but with new trends come new pressures. I found two general challenges that all eCommerce managers face every day.
1. Many one-time buyers
It's more profitable to market to previous customers than people who have never shopped with you before. However, it's still difficult to turn one-time shoppers into lifelong customers, especially if you don't have the right mix of goods or services, MarTech tools, and strategies to win them over. If you feel like you're struggling, try to find the real reason why the existing and repeat customers buy from you. And I won't deny that it requires a tremendous amount of work from professionals across multiple disciplines such as sales, customer loyalty, support, customer success, marketing, social media, data analytics, and so on.
2. Higher churn risk
It's much easier to lose a customer to a competitor online. A customer may simply move on to the following search result or read a negative purchase story in your store on a forum and exclude you from their considered options. You have to be persuasive at every customer touchpoint, and that's a costly and resource-intensive task.
Fine, I generalized a bit by listing just two eCommerce challenges here. Of course, there could be more depending on the product/service offerings, eCommerce business policies, target market, and customer group demographics or psychographics. Nevertheless, the solution to prevent customer churn and make them more loyal is almost within reach — it's called an eCommerce loyalty program.
What are the eCommerce loyalty programs?
An eCommerce loyalty program is a system designed as a seamless part of the customer journey to create a proactive community around your brand and offerings.
Loyalty programs vary and can be based on simple mechanisms related to upgrading to higher tiers, earning points, and receiving simple rewards, or those that combine multiple mechanisms at once, including gamification and gaining new achievements. Whatever components your eCommerce reward software consists of must be easy to understand and provide an enjoyable experience.
Types of eCommerce loyalty programs
There are various types of successful loyalty programs available to cater to the diverse needs of eCommerce businesses. The primary loyalty programs for eCommerce businesses include:
- Tiered programs
- Points-based programs
- Value-based programs
- Universal programs
- Paid programs
A points-based loyalty program is the most straightforward type of loyalty program. It is based on the concept of accumulating points through spending, which can be redeemed for rewards such as discounts, freebies, and exclusive items, ultimately increasing customer lifetime value.
Tiered loyalty programs, on the other hand, reward customers based on their level of loyalty, with higher tiers providing more benefits as customers purchase more, extending their customer lifetime.
Other types of loyalty programs, such as value-based, universal, and paid programs, offer unique benefits to customers. Starbucks Rewards program is a successful example of a value-based loyalty program.
Selecting the right type of loyalty program for your eCommerce business depends on factors such as your target audience, industry, and goals. By understanding the different types of loyalty programs, you can choose the one that best suits your business needs and creates a rewarding experience for your customers.
Get the most out of your loyalty program and choose from market-proven loyalty campaign templates (2023).
Goals of an eCommerce loyalty program
Now that you know what the eCommerce loyalty program is, it's time to explore the most important goals and objectives of an eCommerce loyalty system, and they are:
- Boosting customer retention rate. The eCommerce loyalty programs help you retain existing customers and keep them engaged so that they buy more and more frequently from you.
- Driving overall sales. The eCommerce loyalty platforms are the best way to get repeat purchases from your online store visitors or attract new customers. After each interaction, they can be rewarded with discounts, cash back, freebies, coupons, or gift cards.
- Profiling your customers. You can use online rewards programs to generate richer customer data and support other eCommerce business activities, such as personalizing content, better targeting ads, or creating future sales plans.
- Redefining the customer buying process. The eCommerce reward solutions make people more willing to spend money because online shopping seems more seamless, well-thought-out, and tailored to them.
- Building unique communities. Your online rewards program creates interest clubs. People can join them to get exclusive perks that are beyond the reach of others. This is known as "experience reward" and is part of VIP benefits that increases loyalty program members' lifetime value.
- Going viral as a business at a low cost. You can easily announce a contest in your loyalty program using social media to encourage word-of-mouth and rally people around you.
Who needs an eCommerce customer loyalty program?
You need an eCommerce customer loyalty program if you're an online retailer and:
- Have a steady stream of orders, such as 20 or more orders per month.
- Operate in a niche where customers are sensitive to price changes and minor tweaks in your offerings.
- Operate in dynamic "red ocean" markets where many competitors want to outshine you.
If any of the above points fit you, then it's time to make a decisive business move — create a dedicated and influential customer loyalty program for your eCommerce.
Perhaps you don't know how to get started, and there's just a blank space in your head right now. No worries! Read on and learn about the ten most successful eCommerce loyalty systems to get inspired.
The top 10 examples of successful eCommerce loyalty programs
1. Newegg's EggPoints Program
Newegg is a California-based online retailer of computer hardware and consumer electronics items. They've been in business since 2001 and have amassed a loyal customer base of over 40.2 million users who are always looking for the latest and greatest tech products.
The company has deepened its relationship with customers in 2020 by launching the EggPoints Program. This eCommerce loyalty system was designed to recognize and reward customers for what they already do on the Newegg website.
So, the average customer who joins the EggPoints Program can get more points for:
- Actively participating in promotional events.
- Providing feedback as a loyal customer.
- Purchasing a product that has an EggPoints badge.
The rule is simple: One hundred EggPoints is equivalent to one dollar. When customers earn EggPoints through purchases, they can make one point for every pre-tax dollar spent on an eligible item. Once EggPoints are available to use, customers have 90 days to redeem them before they expire. So, as you can see, customers are motivated to be proactive and revisit to avoid losing points.
EggPoints are only redeemable on Newegg.com so that customers can only buy Newegg products. This is a smart move because people are motivated to purchase more things just based on Newegg's offer. In addition, loyalty program managers can easily spot patterns and products in high demand when redeeming points. They can use this knowledge to plan future campaigns, increasing the value of the shopping cart.
The best features of the EggPoints Program
- Giving a sense of control over points. Customers decide for themselves how many points they want to spend while shopping. They can be very strategic and choose when to redeem points for a more enjoyable and profitable shopping experience.
- Specifying the time to spend points. Well, customers can decide how many EggPoints they want to spend during their visit, but they still have 90 days after the points are available to use. A time-based incentive is an excellent mechanism to motivate the next contact with the brand.
2. FARFETCH "Access" loyalty program
FARFETCH Limited is a leading global platform for the luxury fashion industry. In 2008, FARFETCH started as an eCommerce marketplace for luxury boutiques worldwide. Today, they connect customers in more than 190 countries with items from over 50 countries and more than 1,400 of the world's top brands, boutiques, and department stores.
Their goal is to connect creators, curators, and consumers and provide a truly unique shopping experience on a single platform. With this mission in mind, FARFETCH launched their own reward loyalty program — Access — as an extension of the customer journey.
Customers can join the Access loyalty program in just three easy steps:
- Creating an account and providing basic personal data.
- Purchasing the first item. Then, customers are automatically enrolled in Access, and the amount they spend determines the tier they start on.
- Becoming a member and finally getting access to various membership benefits and rewards.
The customer loyalty program restarts every 12 months and based on customer purchases, they either upgrade or downgrade. Now, customers are divided into five tiers according to their spending, which are:
1. Bronze
The customer needs to make just one purchase, and they get:
- A welcome reward.
- Birthday reward.
- Early sale access.
2. Silver
The customer needs to spend $1,200, and they get:
- A welcome reward.
- Birthday reward.
- Early sale access.
- Exclusive discounts and unique Silver offers throughout the year.
- Free shipping for two orders.
3. Gold
The customer needs to spend $2,400, and they get:
- A welcome reward.
- Birthday reward.
- Early sale access.
- Exclusive discounts and unique Gold offers throughout the year.
- Free shipping for four orders.
4. Platinum
The customer needs to spend $6,000, and they get:
- A welcome reward.
- Birthday reward.
- Early sale access.
- Exclusive discounts and unique Platinum offers throughout the year.
- One year of free shipping.
- Access to exclusive brands, collections, and pieces.
- Priority customer care and fast routing to the expert team.
- Extended 28-day return period.
5. Private Client
The customer needs to spend $12,000, and they get:
- A welcome reward.
- Birthday reward.
- Early sale access.
- Exclusive discounts and unique Private Client offers throughout the year.
- One year of free shipping.
- Access to exclusive brands, collections, and pieces.
- Priority customer care and fast routing to the expert team.
- Extended 28-day return period.
- Fashion concierge that helps with shopping research.
- Personal styling and 1:1 advice around the clock.
This customer loyalty program is a real treat for all fashionistas. As you can see, there are some essential benefits, and then, from tier to tier, there are even more exclusive perks.
The best features of the FARFETCH "Access" loyalty program
- Linking tiers to money spent. The nature and amount of rewards and discounts depend on customers' spending. This motivates them to keep going, as even more exclusive benefits are soon to come.
- Breaking down into finer tiers. FARFETCH seems to have a very diverse customer base in terms of needs and expenses, so creating that many tiers is always a good choice.
3. Flipkart Plus
Flipkart is an Indian company acquired by Walmart, making it the largest online retailer in the country. The company has its own product line called DigiFlip, featuring laptop bags, tablets, and USB flash drives. Of course, they also sell a wide range of products online, which translates to about $5 billion in revenue in 2021.
In 2018, Flipkart officially launched its own loyalty system, Flipkart Plus. It's a no-subscription fee and points-based program for regular customers, who earn points with every purchase. They can get four SuperCoins for every 100 Indian Rupees ($1.32) spent at the Flipkart store. To join the Plus Membership program, customers need to purchase goods in the last 12 months and earn 200 SuperCoins.
Then, members of the Flipkart Plus loyalty program can enjoy:
- Free and fast shipping.
- Early access to significant sale events and an ever-expanding list of services.
- A superior customer support experience.
Also, Flipkart Plus members can earn double SuperCoin, enjoy unique Flipkart Pay Later options, and benefit from ecosystem partners in travel, lifestyle, health, and fitness. Each purchase is limited to 100 coins and has a one-year expiration date.
This loyalty system has been a huge success and achieved over 100% year-on-year growth. Around 30% of Flipkart's monthly active customers are now Plus members. On top of that, members, on average, transact 5X more and have 7X higher spending than the rest of the shoppers. Currently, Flipkart issues more than 1 billion SuperCoins per month, allowing customers to enjoy various benefits. That sounds like a successful customer loyalty program, doesn't it?
The best features of the Flipkart Plus loyalty program
- Using a coin-based reward system. Turning every penny spent into more points lowers the anxiety level and gives the customer a sense that they haven't really put in the financial effort.
4. Walmart+
Walmart is an American multinational retail corporation that runs a chain of hypermarkets, discount department stores, and grocery stores in the United States. I think this brand needs no introduction. It's a world-renowned company that many businesses look up to, with revenues of $572.8 billion in 2022. Let's take a closer look at this eCommerce rewards system success story, though.
In 2020, Walmart launched Walmart+, a membership program that brings in-store and online benefits to save time and money. The company provides their customers with pay&go mobile applications extended with lots of promotions and special offers. Members need to pay a subscription fee of $12.95/month or $98/year to receive benefits, such as:
- Free delivery from the store and same-day receiving of goods.
- The exact same prices on online store as in physical stores.
- Option to schedule preferred delivery times.
- Free shipping and no minimum order.
- Getting select doctor's prescriptions filled for as little as $0 at more than 4,000 Walmart pharmacies.
- Saving five cents per gallon on gas at more than 2,000 convenient locations.
- Contact-free checkout.
- Early access to exclusive promotions, events, deals, and new products.
Walmart+ loyalty program application is an integral part of the mobile application.
According to Walmart data, their customers save $816 a year by getting weekly groceries with free delivery straight from the store. They also save up to $84 a year on gas by taking advantage of member pricing at Walmart, Murphy, and Sam's Club stations.
The best features of the Walmart+ loyalty program
- Providing a subscription-based system. Members pay the same subscription fee every time and always enjoy an amazing set of shopping and lifestyle benefits.
- Giving a free 30-day trial period. Walmart's customers can become members of the loyalty system for 30 days to see if the program suits them. They can also cancel at any time without any hassle.
5. ALDO Crew
The ALDO Group is a global shoe retailer that wants to deliver a unique shopping experience and develop deeper, long-term relations with customers. ALDO has over 1,000 stores operating in 65 countries and plans to open stores in Italy, Norway, France, and Korea. However, they focused on three crucial markets: the US, the UK, and Canada, when creating their customer loyalty program.
In 2019, the company launched the ALDO Crew, a data-driven, omnichannel loyalty program. Their first-ever eCommerce reward system needed to provide a unified commerce approach to stay on top of consumer demands.
The ALDO Crew loyalty program includes three membership tiers: Crew, Plus, and VIP. Once enrolled in the program, all customers are automatically assigned to the Crew tier. Achieving the subsequent tiers — Plus and VIP — requires spending $150-$299 and $300+ at ALDO Crew within 12 months, respectively.
The benefits of having a Crew tier are as follows:
- A welcome offer upon registration. Customers receive a discount on their next purchase for the amount indicated in the welcome message.
- The lowered threshold to receive free shipping to $50.
- Access to Price Drops or products available at a discounted price for a limited time.
- Access to Bundles or designated products that can be purchased together with a discount.
- Online express checkout through My Account.
- Birthday Treat, or a discount on the next purchase.
The higher Plus tier includes all benefits available at the Crew tier, as well:
- The 15% Annual Reward. Customers get a 15% discount on their next purchase to be used only once in 12 months.
- Birthday Gift, or any accessory in-store for free.
- Special 20% discount on handbags when combined with the purchase of footwear.
- Extended 6-month warranty against product defects.
The highest VIP tier includes all the benefits available in the Crew and Plus tiers, but also:
- The 20% Annual Reward. Customers get a 20% discount on their next purchase to be used only once in 12 months.
- Free shipping.
- Access to deals and surprises.
- Ability to share the 20% Annual Reward with up to five friends.
Joining the ALDO Crew program is very simple. Customers must provide a phone number and email address at the physical store or apply online at the website. The same is true for advancing to higher tiers. You have to be a very active customer and spend a certain sum of money to get promoted and access further perks. That's all! No small print or unnecessary fuss.
"We migrated to use Open Loyalty because it provides the business and technical flexibility needed by an enterprise-sized company like ours. With the Open Loyalty integration framework, we could match the loyalty engine with our custom needs." — Thomas Archer Bata, ALDO Group
The best features of the ALDO Crew loyalty program
- Providing the gift-sharing feature. Five friends of a loyalty program member can enjoy the Annual Reward together. This is the foundation of a referral program that can result in new customers.
- Having an individual approach to buyers. ALDO remembers its customer's birthday and celebrates this special day with them by giving special gifts. So, the whole world could drop the ball, but not ALDO.
Curious about the scenes of creating this reward system? Read the full ALDO Crew case study.