Digital Loyalty Program Market

Digital Loyalty Program Market Outlook (2024 to 2034)

The global digital loyalty program market is estimated to have a value of US$ 51.5 billion in 2024 and has been analysed to increase at a CAGR of 8.2% to reach US$ 113.3 billion by 2034.

LoopyLoyalty, Annex Cloud, Kangaroo Rewards, and Loyalty Gator are some of the software solutions included in the scope. COVID-19 has had an unprecedented and devastating worldwide impact, with a major influence on the demand for digital loyalty programs.

Personalization and targeted offers are some to the digital loyalty program market trends. The integration of artificial intelligence (AI) and machine learning (ML) are expected to effectively analyse customers’ preferences and offer them relevant incentives. The program also analyses client purchasing patterns, behavior, historical data, and other factors to provide reward points, coupons, and discounts to customers interested in the company's products or services.

AI is capable of monitoring several transactions and recognizing and removing fraudsters who could try to steal loyalty points. This aids in company’s revenue growth and boosts the sales of digital loyalty programs.

• Comarch SA launched new AI-powered digital loyalty programs with security services in May 2021. Providing data protection and privacy solutions aids in increasing customer confidence in brands. The beneficial characteristics provided by these instruments are expected to boost the adoption of digital loyalty programs.

BFSI, hotel, retail, media, and entertainment industries are projected to boost their investments in customer-rewarding solutions in the coming decade. PayU incorporated digital loyalty programs to better serve its 350 million+ customers.

• North America is estimated to hold 23.9% of the global digital loyalty program market share in 2024.

Worldwide demand for digital loyalty programs is rising at a fast pace. North America and Europe are key markets for digital loyalty program providers, driven by the high volume of e-commerce activities in these regions.

• The East Asian digital loyalty program market size is projected to reach US$ 26.2 billion by 2034.

The East Asia region is a prospective growth-driving market in terms of digital loyalty programs, with enterprises offering broad catalogs of customer incentives fueled by substantial concentrations of regional and global suppliers with established technological platforms.

Report Attribute	Detail
Digital Loyalty Program Market Size (2024E)	US$ 51.5 Billion
Forecasted Market Value (2034F)	US$ 113.3 Billion
Global Market Growth Rate (2024 to 2034)	8.2% CAGR
South Korea Market Value (2034F)	US$ 6 Billion
Reward Aggregator Demand Growth (2024 to 2034)	7.1% CAGR
Key Companies Profiled	Brierley+Partners Kognitiv Corporation (Aimia) SAP SE Epsilon Fidelity Information Services BrandLoyalty Aimia Comarch SA Annex Cloud Loyal Zoo PassKit Prize Logic Messangi Corporation AppCard Bink Kobie Marketing Oracle Corporation IBM Corporation

Why are Digital Loyalty Programs Gaining Importance across Several Verticals?

“Increasing Use of Mobile Apps Pushing Adoption of Digital Loyalty Programs”

Technology is changing the way people do business, whether it's at a store or in a small town. Digital technology is evolving in today's enterprises, which are able to operate on a global scale. Mobile applications are reshaping the internet business.

The necessity and demand for digital loyalty programs in mobile applications are growing along with the transformation of wireless communication systems. Mobile applications provide access to marketing promotions via touchpoints. The digital loyalty program apps are effectively replacing the old rewards scheme.

Mobile applications are being used to develop strong digital experiences and engagement platforms; when a consumer purchases a product, they are expected to receive benefits such as points, exclusive offers, discounts, and early access through the applications. The incentives supplied to potential consumers are expected to have a significant influence on profitability.

“Integration of Big Data Analytics Enhancing Features of Digital Loyalty Programs”

Big data principles are ushering in a new generation of customer relationship management (CRM) methods. Big data analysis aids firms in describing client behavior, understanding their habits, developing appropriate marketing plans, identifying sales transactions, and establishing long-term loyalty relationships.

Customers are first segmented using the new technique. Time-Frequency TFM is a monetary system in which Frequency (F): utilizes services often within a given time, Time (T): is the total duration of calls and Internet sessions in a given period, Money (M): For each section or group, the amount of money spent over a period and the level of loyalty were specified.

Second, the usage of digital loyalty program level descriptors is to create categories with the best behavioral traits for consumers, such as age and gender, being chosen. Finally, numerous classification algorithms are employed to develop distinct prediction models that are used to categorise new users by the digital loyalty programs, based on the descriptors and attributes specified.

Demand for digital loyalty programs that are customizable and employ data analytics and business intelligence is gaining traction. Mobile purchasing insights, customer social media influence, and how internet shopping influences in-store traffic are all leveraging to provide personalized rewards that match specific consumer preferences.

Which Aspects are Hampering Adoption of Digital Loyalty Programs?

“Regional Financial Regulations and Policies Impacting Digital Loyalty Program Offerings”

Liability modelling and its impacts on digital loyalty program sales are influenced by regional rules. Various restrictions, such as the Credit Card Act and the Durbin Amendment of the Dodd-Frank Act pressured banks to revamp their incentive programme portfolios.

• For example, Ontario's Protecting Rewards Points Act went into effect in January 2018, and it altered the demand for digital loyalty programs and reward point procedures in Ontario and Quebec, Canada.

Definition of personal data, permission, partners and business communication, and information withdrawal are the primary aspects that impact the companies’ loyalty programs under GDPR. As a result, with the potential of significant penalties to a company's income, implementation of adequate data protection rules is critical when it comes to compliance.

Start-up Ecosystem

• Wildfire, a United States-based start-up, offers loyalty and rewards management solutions. Existing services the company’s solution enables partners to embed rewards and cashback offerings and social commerce.
• A United States-based start-up Pinata offers reward based payment software solutions. The company’s software allows users to pay rent, earn rewards, and enhance their credit limits through payments.

Country-wise Analysis

What’s Driving Sales of Digital Loyalty Programs in the United States?

“Prime Focus on Monetary Incentives Increasing Adoption of Digital Loyalty Programs in Retail Sector”

Attribute	United States
Market Value (2024E)	US$ 5.5 Billion
Growth Rate (2024 to 2034)	8.6% CAGR
Projected Value (2034F)	US$ 12.6 Billion

The retail sector's quick adoption of loyalty programs is expected to boost the United States digital loyalty program market growth in the coming ten years. Customers in the United States prefer monetary incentives such as rebates or payback, free items, free delivery, and product discounts above other types of incentives.

What is the Demand Outlook for Digital Loyalty Programs in South Korea?

“Rapid Digital Transformation Driving Sales of Digital Loyalty Programs”

Attribute	South Korea
Market Value (2024E)	US$ 2.6 Billion
Growth Rate (2024 to 2034)	9% CAGR
Projected Value (2034F)	US$ 6 Billion

The South Korea market for digital loyalty programs is increasing at a high CAGR since merchants and organisations in the country are shifting their focus to improve customer’s experience. As digital loyalty programs are simple to use and cost-effective, their demand growth is expected to increase in the coming decade.

Category-wise Analysis

How are Digital Loyalty Programs Gaining Traction through Mobile Engagement?

“Mobile Loyalty Programs Encouraging Repeat Business and Stronger Connection”

Attribute	Mobile Engagement
Segment Value (2024E)	US$ 13.4 Billion
Growth Rate (2024 to 2034)	9.4% CAGR
Projected Value (2034F)	US$ 32.9 Billion

Mobile loyalty programs are effective marketing strategies employed by end users to increase consumer interaction and retention through mobile devices. Through mobile loyalty programs consumers are able to get incentives and offers directly on their mobile phones.

Which Vertical Uses Digital Loyalty Programs on a Large Scale?

“Consumers Increasingly Demanding Personalized Card-Linked Offers from Grocery Stores”

Attribute	Grocery
Segment Value (2024E)	US$ 11.8 Billion
Growth Rate (2024 to 2034)	7.7% CAGR
Projected Value (2034F)	US$ 24.9 Billion

Loyalty programs offer to build 360-degree customer profiles. The majority of customers are demanding loyalty programs from grocery stores. Brands and stores can provide consumers with their store cards or co-branded credit cards to gain rewards and incentives. Grocery loyalty programs can increase the frequency of purchases and attract a new loyal customer base.

Competitive Landscape

By embracing sophisticated technologies such as blockchain, AI, machine learning, cloud computing, and others, key players in the digital loyalty program market are prioritizing continual product development and portfolio growth. The increasing popularity of smartphones is leading to the advanced mobile digital loyalty programs solutions.

Customer experience is improved via cloud-based, real-time analytical management models. Similarly, the creation of tailored and personalized digital loyalty programs is expected to help major firms to boost their market positions. The financial success of digital loyalty program market participants is aided by strategic alliances, acquisitions, and collaborations.

• In 2023, Polygon partnered with a customer relationship management company Salesforce for an NFT-based loyalty program.
• Kobie obtained an exclusive licence to Rosemark's Quantitative PersonaTM (QP) Method for the loyalty and co-branded credit card sector in May 2021. Based on the preferences that create economic value, the QP Method determines the most valued customers in each market.
• Comarch introduced its new microsite, Loyalty Marketing Cloud, in 2021. Customers may browse Comarch's offers on the new site, which has been created to provide the utmost user-friendly experience with better navigation and functionality.
• Epsilon announced the launch of Epsilon PeopleCloud Loyalty in September 2020, which creates strong human experiences to achieve user loyalty.
• Oracle purchased CrowdTwist, a major supplier of cloud-native consumer loyalty solutions, in 2019 to enable marketers to give tailored customer experiences.

Key Segments of Digital Loyalty Program Market Research

• By Type :

  • Reward Aggregators
  • Card Linked Loyalty
  • Integrated POS Systems
  • Mobile Engagement
  • Apps
  • Digital Wallets
  • Others

• By Deployment :

  • Cloud
  • On-premise

• By Vertical :

  • Grocery
  • Retail
  • Hospitality
  • Travel
  • Entertainment
  • Sport & Leisure
  • Telcos
  • Gambling
  • Others

• By Region :

  • North America
  • Latin America
  • Western Europe
  • Eastern Europe
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa