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.
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.
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.
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.
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.
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.
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.
So far, so good, but with new trends come new pressures. I found two general challenges that all eCommerce managers face every day.
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.
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.
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.
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:
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).Â
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:
You need an eCommerce customer loyalty program if you're an online retailer and:
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.
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:
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.
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:
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:
The customer needs to make just one purchase, and they get:
The customer needs to spend $1,200, and they get:
The customer needs to spend $2,400, and they get:
The customer needs to spend $6,000, and they get:
The customer needs to spend $12,000, and they get:
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.
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:
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?
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:
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 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:
The higher Plus tier includes all benefits available at the Crew tier, as well:
The highest VIP tier includes all the benefits available in the Crew and Plus tiers, but also:
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
Curious about the scenes of creating this reward system? Read the full ALDO Crew case study.
SHEIN is an international B2C fast fashion eCommerce platform founded in 2008. They focus mainly on women's clothing, menswear, children's clothing, shoes, bags, and other fashion merchandise. According to Bloomberg, the brand was valued at $100 billion in April 2022. You probably know it for its affordable garments, but now it's time to find out about another element that retains customers — SHEIN Bonus Points, which are like a magnet and attract further purchases.
SHEIN Bonus Points program addressed the point earning system in a smart way, and their customers can collect them through:
When it comes to redeeming points, customers can use them to deduct up to 70% of the total price of their order. They can also use the collected points to redeem coupons during special events or game opportunities. Â
Sephora is a retail brand with a long history in the personal care and beauty industry. The company was founded in France in 1970 and since then has over 2,700 stores in 35 countries around the world. However, it didn't stop there. They continued to grow a base of over 500 stores in the Americas and a world-class eCommerce store.
Because the company has many die-hard fans, in 2007, they created a free Beauty Insider Program in the United States and Canada that allows customers to earn points for their purchases and redeem them for rewards.
The Beauty Insider Program consists of three tiers: Insiders, VIB, and Rouge. Customers earn one Beauty Insider point for every dollar spent, and the tiers, in this case, are tied to spending.
Shoppers can move up to the Insiders tier for free, but if they want to upgrade to the VIB or Rouge tier, they must consecutively make $350 or $1,000 in purchases. So, depending on the tier, there are many benefits associated with the three areas:
Every Sephora Beauty Insider member can also access Rewards Bazaar, a special online platform where they can redeem their points for various time-limited products or sets. Members can also join the Beauty Insider Community, a mobile and desktop platform where they can find other beauty lovers looking for inspiration, answers to questions, and product recommendations.
According to rankings, Alibaba is the largest eCommerce company in China or maybe even the world. The annual number of active users of Alibaba Ecosystem worldwide was about 1.28 billion at the end of 2021. This makes them the most popular online shopping space in the fastest-growing eCommerce market.
In 2018, Alibaba launched the "88 VIP" premium membership package as the next tier within the 88 Membership Club, a loyalty program for Tmall and Taobao marketplace customers. This tiered loyalty program was designed to reward the most loyal customers and offer exclusive member benefits across Alibaba's commerce, entertainment, and local service ecosystems. Frankly, they've really redefined building customer loyalty with this system.
Alibaba's customers need to pay an annual membership fee of 888 yuan (about $140) to be promoted to the "88 VIP" tier. Do you think they're willing to accept such a fee? Of course, because the perks are tempting.
The "88VIP" members can enjoy top-notch services across all platforms in the Alibaba ecosystem, specifically:
Loyalty managers increase usage of the "88VIP" program by taking advantage of Singles' Day on November 11 or June 18 Mid-Year Shopping Festival and giving even greater discounts. During the 6.18 Festival, sales generated through live streams hosted by retailers increased 100% year-over-year. In addition, brands on Tmall offer special deals for 88VIPs and early access to limited editions or new products.
What's more, the "88VIP" members are automatically enrolled in other membership programs within the Alibaba ecosystem, such as food delivery or travel booking services. They also achieve "Gold elite" status in the hotel loyalty program, making it easier for them to book a place at a budget-friendly price. The digital membership card offers access to free streaming of favorite movies, TV series, and music.
Alibaba has successfully created a special place with benefits that many people want to join. Miya Duan, Tmall Brand Marketing director and head of the "88VIP" program, claims that "88VIP" members spend twice as much money as other shoppers on the platform. And because they're also early adopters of new trends about six months before their official release, other consumers want to join the "88VIP" club to stay up to date and take advantage of the best prices.
Best Buy is an American multinational consumer electronics retailer that has become one of the biggest in the world. They sell products and services through three main channels: Retail stores, eCommerce, and call centers. Best Buy has more than 1,000 stores, employs about 100,000 people in the United States and Canada, and generated global revenue of $47.3 billion in the fiscal year 2021, with more than 90% of the company's revenue coming from the United States.
The company launched the My Best Buy eCommerce rewards system to strengthen customer relationships and make their shopping experience more rewarding.
Buyers earn points for every dollar spent on qualifying purchases in an eCommerce store, retail store, or a mobile app.
Customers can achieve three levels of membership: My Best Buy, My Best Buy Elite, and My Best Buy Elite Plus. There's no fee to become a member, and customers qualify for each level based on their annual spending at Best Buy. In this case, it's $1,500 per calendar year for Elite and $3,500 per calendar year for Elite Plus.
Members participating in the My Best Buy loyalty program can enjoy such benefits as:
Zappos is an online retailer that sells shoes, as well as apparel, handbags, accessories, and more. In the U.S. fashion market, Zappos ranks 200th globally with over $800 million in 2021.
Customers can join Zappos VIP free loyalty program and earn VIP Points for qualifying purchases on the Zappos website or app. They can earn one point for every dollar spent.
Members can also earn VIP Points by taking part in promotional activities like writing product reviews, linking their Amazon Prime membership to their Zappos VIP membership, or participating in sales promotions that offer bonus points. Zappos VIP members can redeem their accumulated VIP Points for VIP Codes that can be used to purchase Zappos merchandise.
In addition to earning VIP Codes on purchases, existing customers can also enjoy several perks, such as:
An example of the Zappos VIP loyalty scheme that is based on coupons.
These ten eCommerce loyalty programs were really something! After reviewing them carefully, I have a strong sense of what successful website customer loyalty programs have in common. Below, you'll find a list of the best loyalty features and traits for eCommerce that you should consider once you've decided on a rewards program.
Ensure that your eCommerce rewards solution is a no-brainer. Remember that people may be stressed about shopping online and feel anxious. Don't make it difficult for them. Keep it simple, and they'll come back for more because shopping with you will be a pure pleasure.
When you create a customer loyalty program for your website, it should be tightly integrated with the overall user experience of your eCommerce. It definitely should have a similar look and feel, visual elements, and descriptions so that users think they're continuing the same journey they started in your online store.
mCommerce is booming, and the data speaks for itself: 79% of smartphone users have made an online purchase using their mobile device in the last six months. Tailor your online rewards program to mobile users — think about their behavior and the situations in which they choose to use a mobile app instead of a retail store or desktop.
Your shoppers could be anywhere, so you need to think about your business in an omnichannel way. Become more approachable and think outside the box to attract new customers. Use synchronous and asynchronous communication, website, mobile channels, and be always ready to adapt, so you don't go out of the market.
If your brand is purely eCommerce, think about presenting your offerings and reward program in the offline realm. People there don't even know you exist because you're only available online. Properly market your loyalty rewards system, invest in long-term advertising, and use guerrilla marketing tactics to get noticed.
Build a sense of community around your online rewards program. Create a place where people can not only have fun competing for prizes but also share their experiences or positive stories related to your brand.
To sum up, if you combine all these features into one eCommerce loyalty program, you increase your chances of conquering the hearts of your customers in the long run. Launch your own eCommerce reward program on your own terms and at your own pace with the Open Loyalty experts.
To sum up, eCommerce loyalty programs are a powerful tool for retaining customers, driving sales, and staying competitive in the market. By understanding the different types of customer loyalty programs, the key elements of success, and the strategies for boosting customer engagement and participation, you can design and launch a successful loyalty scheme that benefits both your business and your customers. Remember to continuously optimize, innovate, and maintain a customer-centric approach to ensure the long-term success of your eCommerce loyalty program.Â
By implementing the insights and tips discussed in this article, as well as using the market-proven loyalty campaign templates, you'll be on track to transform the shopping experience of all eCommerce users.
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