Understanding eCommerce Retailers’ Loyalty Programs

When COVID came along, the eCommerce sector expanded really quickly and even took off. By 2022, that percentage is predicted to rise to 21%, or $5.55 trillion. Nonetheless, eCommerce companies face two major obstacles. The first is a number of one-time purchasers, while the second is a rising rate of clients switching to other businesses. Here, merchants provide loyalty plans to guarantee a satisfying consumer experience.

To gain a clear image of why we must comprehend the loyalty programs and tactics used by eCommerce retailers, let’s first examine the concerns listed above.

1. Too Many One-time Buyers

Marketing to past consumers yields higher profits than reaching out to new customers. Turning one-time buyers into loyal ones is still challenging, though, particularly if you lack the proper combination of products or services, MarTech tools, and client acquisition tactics. Try to determine the true reason why your current and repeat consumers choose to do business with you if you’re having trouble.  

2. Higher churn risk

Online, it’s considerably simpler to lose a client to a rival. A customer might just read a bad review of your store on a forum or go on to the next search result, leaving you out of their list of possibilities. Every client interaction requires you to be persuasive, which is an expensive and resource-intensive undertaking.

What are the eCommerce loyalty programs?

In order to build a proactive community around your brand and products, an eCommerce loyalty program is a system that integrates seamlessly into the customer journey.

Simple mechanisms like moving up the tiers, accruing points, and getting basic rewards are the foundation of certain loyalty programs; other programs incorporate several mechanisms at once, such as gamification and unlocking new achievements.  

Types of eCommerce loyalty programs

Successful loyalty programs come in a variety of forms to meet the unique demands of eCommerce companies. The main loyalty schemes used by eCommerce companies consist of:

• Tiered programs
• Value-based programs
• Universal programs
• Points-based programs
• Paid programs

The simplest kind of loyalty program is one that is based on points. The idea behind it is that customers may increase their lifetime value by spending money and earning points that can be exchanged for exclusive things, discounts, and freebies.

As customers make more purchases, higher levels of loyalty programs offer greater advantages, extending the customer lifetime. In contrast, tiered loyalty programs reward customers according to their level of loyalty.

Customers can benefit from special advantages offered by other kinds of loyalty programs, including value-based, universal, and compensated programs. One effective illustration of a value-based loyalty program is the Starbucks Rewards program. Depending on your industry, goals, and target audience, you can choose the best kind of loyalty program for your eCommerce company.

Who needs an eCommerce customer loyalty program?

1. If you are an online retailer, you must have an eCommerce customer loyalty program.
2. 1. Maintain a consistent flow of business, such as 20 or more orders each month.
3. 2. Work in a market where consumers are sensitive to little adjustments to your products and pricing adjustments.
4. 3. Work in dynamic “red ocean” markets where a lot of rivals are trying to outperform you.

Examples of Popular Loyalty Programs

Walmart+

Walmart is one of the largest ecommerce and retail-based organization in the US known for its cheaper grocery stores and supermarkets.  

Walmart introduced Walmart+, a membership program that offers time and money-saving in-store and online perks, in 2020. The business offers its clients pay-and-go mobile applications that are enhanced with several discounts and exclusive deals. To get services like free shop delivery and same-day item receipt, members must pay a subscription fee of $12.95 per month or $98 per year.

• Free shipping and no minimum order requirements
• The ability to plan preferred delivery times
• The exact same rates as in-store and online.

Alibaba’s “88 VIP” Membership Package

Alibaba is the biggest eCommerce business in China, if not the entire globe, based on rankings.

Alibaba introduced the “88 VIP” premium membership package in 2018 as the next level of the 88 Membership Club, a loyalty program for users of the Taobao and Tmall marketplaces. The goal of this tiered loyalty program was to honor the most devoted consumers and provide special member perks throughout Alibaba’s entertainment, commerce, Top-notch services are available to “88VIP” members on all platforms within the Alibaba ecosystem, including:

• Free same-day delivery
• 5% off any transaction
• Coupons for a range of products, including luxury or designer goods, imported goods, and online grocery and drugstores.

My Best Buy Loyalty Program

One of the largest retailers of consumer electronics worldwide is Best Buy, a global corporation based in the United States. In an effort to improve customer satisfaction and foster stronger ties with its customers, the company introduced the My Best Buy eCommerce rewards program. Every dollar spent on eligible purchases made through a mobile app, physical store, or eCommerce site earns points for the buyer.

These are the most lucrative membership tiers for shoppers. You can join them easily with no charges at all:

• My Best Buy
• My Best Buy Elite
• My Best Buy Elite Plus

In this instance, Elite costs $1,500 annually, whereas Elite Plus costs $3,500 annually. Participants in the My Best Buy loyalty scheme that can offer free shipping and free in-home consultation.