Digital loyalty programs are on the rise with new research from Juniper showing by 2026 there will be more than 32 billion digital loyalty memberships, a jump of 33 percent.
In the new research, it noted that digital loyalty programs are critical to customer retention within highly competitive verticals including grocery and quick service restaurants (QSR).
Juniper Research defines a digital loyalty programme as a solution comprising traditional customer satisfaction aspects, combined with digital technologies; utilising personalisation and proactive engagement.
To date, innovation has been constrained to the largest vendors in these verticals. However, the proliferation of digital loyalty vendors means that smaller businesses now have access to digital loyalty platforms.
To take advantage of this opportunity to improve customer loyalty, the report recommends that digital loyalty vendors must provide the ability to customise and personalise all aspects of the communication and checkout processes.
The research estimates that growth is slowing in the loyalty cards market, as loyalty programmes switch to be digital-focused. It forecasts that the loyalty cards market will stagnate, with growth in the number of cards in circulation of only 5 percent between 2022 and 2026; reaching 7.6 billion in 2026 globally.
Research co-author Nick Maynard said, “Digital engagement and personalisation using AI means that traditional loyalty cards are no longer wholly necessary. Traditional loyalty card vendors must pivot towards digital solutions as an urgent priority, or they will lose out.”
In a highly competitive market such as digital loyalty, technology is fairly standard at this stage of market development.
Accordingly, partnerships are coming to the fore as differentiators. Platform providers must focus on identifying and agreeing on the most valuable partnerships, in order to make their ecosystems appealing.
