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 $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% of respondents believe loyalty programs increase revenue, with this belief strongest among US brands (94%) compared to their UK counterparts (85%).
Loyalty programs on the rise
The findings show that 65% of Shopify brands already have a loyalty programme, with particularly high adoption rates in the US, where 70% of businesses have implemented one, compared to 64% in the UK. For those without a loyalty programme, the future looks promising, as 43% of these brands are currently in the process of launching one. Additionally, almost half (48%) 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% of respondents globally, and is a particular concern in the UK (30%). Other challenges include competing business priorities (23%), cost (22%), and uncertainty about which provider to work with (22%). A lack of internal expertise is another common issue, affecting 21% 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% of respondents listing it as their top priority. Other key goals include rewarding customers (31%), increasing customer lifetime value (26%), driving repeat purchases (21%), and improving product visibility (25%).
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%), retention (23%), and database growth (23%) are the top ways businesses measure loyalty programme performance. These are closely followed by metrics such as purchase frequency (23%) and increased traffic (22%), 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.
