Research commissioned by LoyaltyLion has revealed the growing importance of loyalty programs in eCommerce. A survey of 450 Shopify brands, conducted anonymously by Censuswide, highlights global trends in loyalty adoption and the challenges preventing universal uptake. The study focused on businesses with annual revenues exceeding US$2 million, located in the US, UK, and Canada, and included input from founders, owners, and marketing professionals.
The findings show that loyalty programs are seen as critical to building sustainable business growth. An overwhelming 88 per cent of respondents believe loyalty programs increase revenue, with this belief strongest among US brands (94 per cent) compared to their UK counterparts (85 per cent).
Loyalty programs on the rise
The findings show that 65 per cent of Shopify brands already have a loyalty programme, with particularly high adoption rates in the US, where 70 per cent of businesses have implemented one, compared to 64 per cent in the UK. For those without a loyalty programme, the future looks promising, as 43 per cent of these brands are currently in the process of launching one. Additionally, almost half (48 per cent) plan to introduce a programme within the next 12 months.
Charlie Casey, CEO of LoyaltyLion, commented, “These findings demonstrate the pivotal role loyalty programs play in driving retention and revenue growth for eCommerce brands globally. While challenges exist, it’s encouraging to see so many businesses prioritizing loyalty as a strategy for long-term success. Brands that make these investments now will build stronger, more profitable customer relationships.”
Barriers to implementation
Despite the enthusiasm for loyalty programs, brands face several hurdles. The complexity of setup is the most significant barrier, cited by 24 per cent of respondents globally, and is a particular concern in the UK (30 per cent). Other challenges include competing business priorities (23 per cent), cost (22 per cent), and uncertainty about which provider to work with (22 per cent). A lack of internal expertise is another common issue, affecting 21 per cent of brands worldwide.
Why loyalty matters
Among those investing in loyalty, the benefits are clear. Retention was identified as the most critical challenge that brands hope loyalty programs will address, with 36 per cent of respondents listing it as their top priority. Other key goals include rewarding customers (31 per cent), increasing customer lifetime value (26 per cent), driving repeat purchases (21 per cent), and improving product visibility (25 per cent).
For brands already running loyalty programs, the positive impact is undeniable. Rewarding customers and increasing customer lifetime value were identified as the most significant achievements, followed closely by driving average order value and retention.
Measuring success
Brands are aligning loyalty programme success with metrics that directly influence their bottom line. Returning customer rates (25 per cent), retention (23 per cent), and database growth (23 per cent) are the top ways businesses measure loyalty programme performance. These are closely followed by metrics such as purchase frequency (23 per cent) and increased traffic (22 per cent), highlighting the focus on customer engagement and repeat purchases as key indicators of success.
The future of loyalty
As Shopify brands navigate the challenges of implementation, the next 12 months will be pivotal. With nearly half of the brands currently without a loyalty programme planning to introduce one, loyalty programs are set to play an increasingly important role in the global eCommerce landscape.
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