For the past decade, eCommerce has steadily been on the rise. The pandemic took online shopping to new heights and it’s expected that global eCommerce sales will reach $7.4 trillion by 2025.
When it comes to building a sustainable e-commerce business, customer retention is key.
Research shows that it can cost a business five times more to acquire a new customer than it does to retain an existing one. Even if you can bring in new customers, your chances of selling to them are only about 5-20%, compared to 60-70% for existing customers.
Loyal customers are brand advocates who are more likely to make repeat purchases, increasing the sales of your eCommerce store. They are without a doubt one of your company’s most valuable assets. So, how do you build brand loyalty and drive more sales to your website? Investing in loyalty and rewards technology is one of the most recent methods used by many e-commerce and Retail Technology startups.
What is Loyalty and Rewards technology?
A standard eCommerce loyalty programme is one that encourages your buyers and customers to stay loyal to you. It provides consumers with incentives and rewards to keep buying from you rather instead of your competitors. The best programmes are easy to use, provide a clear roadmap of tiers and prizes, and offer an enjoyable experience.
With a digital loyalty and rewards programme, the collection of technology supports every aspect of your loyalty initiatives, including software for your user database, customer service, point of sale, email service provider, customer engagement, advocate marketing, e-commerce AI chat functions and more.
Loyalty technology can be computer or web based. Your company’s stack might feature a single platform that can accomplish everything, or it most likely has a foundational component (usually the database) that must interface with third-party apps.
By utilising loyalty and rewards technology, you can create a seamless and memorable customer experience, which makes consumers more eager to purchase from you because of the trust you build through the programme.
3 Loyalty and Rewards Tech Trends
Blockchain
Blockchain technology is a way of keeping transaction related information like date, time and amount, in separate blocks or digital storage units. Each of these blocks is given a hash code that distinguishes it from other blocks and is stored into a public database. This is a decentralised technique of storing transactions in a P2P network that provides improved anonymity and can be used by retailers to create loyalty programmes.
American Express and online wholesaler Boxed are an excellent example. When a customer makes a purchase on Boxed, the transaction data is stored in the blockchain (while hiding privileged data about the card holder). The transaction’s details trigger the creation of a smart contract, which then generates and awards points in a backend loyalty system. The security concerns associated with loyalty programmes, such as a data breach, are a major issue. Blockchain technology solves this problem because it is highly secure and preserves anonymity.
Mobile wallets
Consumers are now seeking mobile wallets not only for payments, but also for rewards each time they complete a transaction. As a result, retailers are implementing appropriate loyalty programmes for these wallets.
Integrating loyalty points into a mobile wallet allows customers to keep track of all their loyalty programmes, exchange points across programmes, and redeem points with ease with each purchase. These wallets use smartphones to provide notifications such as location-aware information, reminders about incentive deadline, and loyalty programme updates.
Capital One, for example, partnered with Foursquare to deliver offers to their customers via mobile apps whenever their phones indicate that they are in partner stores.
Artificial Intelligence (AI)
Understanding your target audience’s needs is at the heart of any successful loyalty and rewards programme. AI provides insights into your customers’ behaviour, and machine learning algorithms allow you to look at previous buying behaviour of customers to predict their future actions. This type of personalisation allows you to identify potential threats that may affect their customer journey and, as a result, quickly and easily discover exactly what they like so that you can tailor products you suggest to them.
Sephora’s Beauty Insider loyalty programme employs smart technology to generate personalised newsletters based on individual purchases, and it provides customised beauty profiles for its members based on age, skin type, and personal preferences, as well as profile-aligned free gifts. This tech approach has significantly increased customer engagement while also improving the brand’s bottom line.
Customer Benefits Of Loyalty and Rewards Tech
- Ease of use – launching a mobile loyalty programme will simply and ease the customer experience. Consumers will only need to collect loyalty points digitally and without difficulty. This makes it easier for them to commit and for you to follow up on their commitment.
- Engagement –with a digital loyalty program, your brand is always top of mind, since the loyalty program is likely on the customer’s phone which serves as a “brand reminder” as well as an incentive to make a purchase right awau.
- Personalization– using loyalty and rewards tech allows you to build a tailored relationship with your customers by sending them customised material via numerous personalised targeting options.
- Customer data– a tech-based loyalty program makes collecting customer feedback easier and more accurate, allowing you to better understand your target audience and work toward increasing customer expectations and providing better value.
Customer Loyalty Is A Continuous Journey
Loyalty and rewards technology is constantly changing and evolving to reflect your customers’ wants and needs. Fortunately, this type of technology is becoming more affordable and widely accessible. You do not have to start from scratch and rebuild your entire stack. In many cases, you can work with Loyalty and Rewards RetailTech to integrate their software with your existing e-commerce platform. The most important thing is to understand where you are now and to have a clear vision of where you want to go, so that you can continue to build brand loyalty and thus boost sales.
Are you looking to update your loyalty and rewards technology but you’re unsure of what you need, where to start, or if your in-house team has the necessary knowledge? Get in touch with Storm5, where our expert consultants have access to top senior talent with a wealth of knowledge on customer loyalty technology to help drive e-commerce growth and sales.