Building loyalty among customers is the way forward for e-commerce
Customer retention is one of the key factors that impacts business growth. This is perhaps why companies are considering various customer loyalty programmes to drive engagement and stickiness.
India’s e-commerce industry has witnessed a major breakthrough in the last five years. Increasing Internet penetration, safe and secure payment modes along with aggressive marketing strategies have all played a significant role in the booming –e-commerce sector. It has carved a place for itself as a leading industry in the consumer connect business.
The e-commerce in India has expanded with the initiation of digitalisation and the Internet, both of which have created a massive boom in the country. Online retail sales in India is expected to reach $64 billion by 2021, growing at a five-year CAGR of 31.2 percent. This tremendous growth is a clear example that this sector will expand beyond what was expected by 2020.
Today, every e-tailer is going all out to woo the customers from their competitors. So, in the current landscape, the way forward is to have well-formulated customer relationship programmes to attract customers for repeat purchases.
Customer retention is one of the key factors that impacts business growth, and hence companies are considering various customer loyalty programmes to drive engagement and stickiness. Gift cards, frequent purchase programme, point programme, rewards, offers, schemes, value-added services and many more are all ways to strengthen the bond between the customer and the brand. Over the years, these loyalty programmes have helped thousands of brands to boost their sales and profits.
A successful loyalty programme will ensure that you acquire new customers and will keep them for longer periods, and find new ways to engage and reward existing customers. This will encourage people remain on board, and will attract more recommendations for your brand through social media and word-of-mouth, and more customers will see value in your brand.
Any customer getting value from a brand will become a repeat client at a specific store, thus accumulating loyalty points and earning loyalty rewards. While a customer benefits in terms of loyalty rewards, the store too gains through higher sales, and customer retention and stronger brand loyalty.
Let us look at some of the latest trends in the ever-changing facet of the loyalty coupon that drives e-commerce.
Mobile coupons – Mobile transactions are growing, along with this is the loyalty coupon business. They drive mobile transactions and have the best deals in place. This is because the penetration of smartphones is growing. The use of smartphones in Tier I and II towns are rising too. Additionally, with the rising demand for hi-speed Internet, things are becoming convenient and easy. Thus, businesses are gearing up to deal with the recent changes and dynamics in customer behaviour.
Going hyperlocal – Hyperlocal markets have grown for the last few years, and their presence has brought yet another new and innovative market trend. Thus, loyalty coupons began to reinvent the wheel in this segment of the mammoth retail e-commerce sector. The synergy between the two was seamless, and loyalty drives services that go hyperlocal, especially those that are on demand across categories.
Semi-urban gains more – Mega cities and great urban localities of India will always get more attention from marketers, and brands woo the customer to ensure they can meet every demand. But semi-urban and Tier I and II cities also play a vital role in the e-commerce business. With the rising levels in income and the millennial redefining today’s lifestyle, online buying behaviour is catching up fast. Consumers are looking out for exciting loyalty deals. Thus, this will increase the number of loyal customers for a brand and increase their market presence as well.
Technological innovation – It has also played a crucial role in the booming loyalty coupon industry. In fact, mobile technology has been one of the best things that has happened to businesses with a loyalty proposition. It enables the delivery of ultra-personalised rewards, interactive customer experiences and services for its customers.
Data analytics - Analytics is integral to loyalty programmes as it helps to differentiate customer segments, their behaviour, lifestyles and aspirations that help to formulate suitable offers and a fitting and timely way to communicate them.
Going forward, it’s important for e-tailers to understand that incorporating new technologies will further drive customer engagement. Understanding the scenario, leading loyalty programme providers today have devised a network comprising offline and online partners with wholesome benefits on each purchase over an extended period. It offers the consumers a truly unique shopping experience and ensures customer retention. The concept of pooling loyalty benefits from an extensive list of partners along with the competitive advantage of its differentiated offering provides a seamless shopping experience to the consumers.
While urban audience will continue to be the focus for marketers, the emerging Tier II and III markets cannot be ignored as they will be the potential areas to drive the next phase of growth. The rising popularity of loyalty coupons in these markets will contribute to drive the e-commerce industry on a growth trajectory. Overall, India is an exciting country to watch out from an e-commerce perspective in the coming years.
