Loyalty Programs Market Intelligence

Loyalty Programs Market Description

The market for global loyalty programs is expected to reach $199-$201 billion while growing at a CAGR of 4-5 percent until 2022. High market maturity would be experienced in regions such as Western Europe, North America, and some parts of APAC such as Australia, Japan, Hong Kong, and Singapore. In addition to this, APAC and parts of the LATAM are also expected to be the future growth driving markets for loyalty program services. The penetration of loyalty programs is also high outside North America and Europe due to an increase in e-commerce and online buying behavior of the customers.

The budget for loyalty programs is expected to be driven by a growth in the online buying culture, and a high adoption of smartphones by the consumers. The report also provides a descriptive overview of the market for loyalty programs in areas such as North America, Europe, Middle East, Africa, APAC, Australia, and Latin America. It also explores the various opportunities and challenges affecting the loyalty programs industry, along with Porter’s five forces analysis of developed and emerging markets.

Beroe gathers intelligence through primary sources that include industry experts, researchers, and consultants, as well as current suppliers, producers and distributors. Secondary sources can include business journals, newsletters, magazines, market research data, company sources, and industry associations. Following data collation, analysis, and strategic review, the Final Research Report is published on Beroe LiVE.

Report Coverage

Global Capacity–Demand Analysis
Global Trade Dynamics
Regional Market Snapshot-North America, Europe, Asia
Cost Structure Analysis

Loyalty Programs Market Trend, Analysis & Forecast

Category Intelligence on Loyalty Programs covers the following

Information relating to market, supply, cost, and pricing analysis
Hard to find data on cost and TCO models, supplier details, and performance benchmarks
Macroeconomic and regional trends impacting cost, supply, and other market dynamics
Category-specific negotiation and sourcing advice

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Executive Summary

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Market Analysis

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Supply Analysis

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Cost & Pricing Analysis

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Best Practices

Loyalty Programs Executive Summary
Global Loyalty Program Industry Outlook
Supply–Demand Trends

Loyalty Programs Market Analysis
Global Loyalty Program Market Maturity
Global Loyalty Program Industry Trends
Growth Drivers and Constraints
Regional Market Outlook
Industry Outlook
Porter’s Five Forces Analysis  - Developed Markets
Porter’s Five Forces Analysis  - Emerging Markets
Market Outlook  - Retail

Loyalty Programs Supply Analysis
Supply Market Outlook  - Supply Trends and Insights
Key Global Suppliers
Key Regional Suppliers - Service Portfolio
Key Global Supplier Profile

Loyalty Programs Procurement Best Practices
Sourcing Models for Loyalty Program Services
Sourcing Models  - Comparative Analysis
Sourcing Models - Pros and Cons
Sourcing Model Adoption
Pricing Models  - Comparative Analysis
Sourcing Strategies  - BFSI
Key Services - based KPI and SLA Components

Loyalty Programs Cost Structure Analysis
Supplier Cost Structure Overview
Cost Saving Opportunities
Key Performance Indicators and Benchmarks
Sourcing and Redemption Overview

Loyalty Programs End-user Industry Update
Retail
Financial Services

Global Loyalty Program Industry Outlook

The global Loyalty Program market was valued at $169 billion in 2018
The market is forecasted to grow at a CAGR of 4–5 percent to $199–201 billion between 2017 and 2022
Regions, such as Western Europe, North America, and some parts of APAC, such as Australia, Japan, Hong Kong, Singapore, have high market maturity
The APAC and parts of Latin America are expected to be the future growth driving markets for loyalty program services

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Global Loyalty Program Market Maturity

Loyalty program penetration is high outside Europe and North America, due to increasing e-commerce and online buying behavior of the customers High adoption for Loyalty Program in APAC, due to the presence of regional/global suppliers with established technology platform and regional/local merchant network offering iconic reward catalog. Global buyers are looking at consolidating the supply base.

The Middle East and Africa have low adoption, as infrastructure and connectivity pose a challenge in rewards sourcing, fulfillment, and delivery in certain locations

Global Loyalty Program Industry Trends

The growing geographic footprint of service providers and adoption of global loyalty program strategy by buyers indicate the increasing maturity and willingness of both supplier and buyers to partner on a global scale. Suppliers are also improving their supply capability while adopting performance-based metrics for evaluation and monitoring of both channel and customer loyalty program. E–commerce is fueling the demand for B2C loyalty, whereas B2B is driven by customer retention, as the marketers aim to guard their brand against generic products in the market. This has led to outsourcing of services by buyers

In order to boost loyalty program participation in the Middle East, suppliers are investing in analytics and business intelligence tools to personalize the program for relevant rewards and incentive schemes

Growth Drivers and Constraints

The growth of retail and e–commerce in the emerging markets is expected to drive loyalty program budgets in these markets. Growth in online buying culture, high adoption of mobile and smartphone by the consumers had raised the need for digital loyalty program strategy. This will be a major growth driver in mature markets

Drivers

Cost Benefits

Outsourcing has led to reduction in the number of hours billed for technology platform. The initial infrastructure cost for creating a technology platform, is a one–time spend and this platform is customized to suit client requirements. Hence, the margins on a long term contract in providing this platform to clients is high and the supplier passes on a part of margin as a discount to clients

Potential Industry Sectors

The demand for loyalty services is primarily driven by the retail, financial services, consumer product and food and beverage industries. Demand for digital reward program, analytics and business intelligence for customization by the retail, food and beverage industries is a key driver

Operational Benefits

Outsourcing allows buyers to standardize the level of services across various locations. Productivity and efficiency could be enhanced through the introduction of various critical performance indicators and compliance clauses in the contract
Centralized procurement through global/regional service provider will save cost by reduction of the cost per unit of reward fulfillment (supplier provides discounts as the number of merchandising units increases owing to economies of scale)

Constraints

Subcontracting Practices

Subcontracting of reward sourcing and delivery is done in case of suppliers lack proper network in a particular region or when the program requires high localization. This practice indirectly affects the buyer since subcontractors (Local Agency) charge a margin to the service provider, which is eventually passed on to the buyer. This margin–on–margin increases the spend of the buyer

Limitation of Technology Platform

The loyalty program that runs on plug and paly SaaS model and is limited by SaaS capability, customization of program may spike cost of program, cost saving by avoiding customization may lead to dissatisfied customer

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