How Loyalty Programs are a must for E-commerce in the Middle East


Introduction to Customer Loyalty Programs

Today’s digital consumers are significantly more discerning, aware of what they desire, and intolerant of poor customer service. Therefore, the retailers are in the driver’s seat: it is up to them to determine what their customers want, what will make them happy, and what will keep them returning for more.

Marketers across all industries rely heavily on customer Loyalty Programs to retain customers. According to a study, 64% of e-commerce retailers believe loyalty programs are the most effective way to engage with customers.

An E-commerce Loyalty Program is a marketing tactic used by online retailers to retain and reward their most loyal consumers. It is a customer retention tool designed to retain and engage existing business consumers so they will purchase in greater quantities, shop more regularly, and interact with the brand more often.

Membership provided by these e-commerce stores might be free or expensive. But, consumers who sign up receive exclusive deals, discounts, and rewards for connecting with the business and purchasing its items.

Goals of an E-commerce Loyalty Program

Goals of an E-commerce Loyalty Program

Increasing the Customer Retention Rate

The e-commerce loyalty programs enable businesses to retain existing customers and maintain their interest in purchasing more regularly.

Driving Overall Sales

E-commerce loyalty platforms are the most effective method for encouraging repeat purchases and attracting new customers. After each contact, they can be rewarded with discounts, cash back, freebies, coupons, or gift cards.

Creating a Customer Profile

Businesses can utilize online rewards programs to gather richer consumer data and help other e-commerce company activities, such as tailoring content, improving ad targeting, and developing sales strategies for the future.

Redefining the Buying Process for Customers

The e-commerce incentive solutions increase consumers’ spending since online buying appears more frictionless, well-planned, and personalized.

Building Distinct Communities

An online rewards program establishes interest groups. People might join to gain access to benefits that are unavailable to others. This is known as an “experience award” and is part of the VIP advantages that boost the lifetime value of loyalty club members.

Going Viral at a Low Cost

E-commerce uses social media to promote word-of-mouth and mobilize support for the loyalty program is a simple way to announce a contest and go viral among consumers at a low cost.

How Businesses can Harness Loyalty Programs to Improve Repeat Purchases and High Frequency

E-commerce has been growing steadily over the past ten years. Still, after the 2020 pandemic, the number of people shopping online went through a hyperjump, and it’s expected that by 2024, global e-commerce sales will reach $6.33 billion. So one thing is sure e-commerce loyalty programs are more critical than ever for businesses to acquire and retain customers.

People need to refill their supplies at times. However, people now have more time to browse things on the Internet, and depending only on discounts will not be sufficient to compete with big competitors like Amazon. So e-commerce should not only focus on competitive prices and high-quality goods but also a convenient purchasing process and a multitude of multiple touchpoints that keep clients coming back.

Businesses can Harness Loyalty Programs

A business can consider adopting the following Loyalty program to encourage customer engagement and loyalty to the brand.

Point-Based Loyalty Program

The Point-Based Loyalty Program is one of the oldest loyalty program concepts. It involves accumulating points and then spending them. In a more modern strategy, users can earn points for various interactions, such as purchases, sharing product pages on social media, completing their profile, and subscribing to a newsletter.

Starbucks uses this program to reward customers with stars whenever they use the app to place an order. Clients who accumulate stars move to higher tiers and can redeem more valuable things as soon as they accumulate stars. For instance, customers can redeem the stars in the first tier for a standard drip coffee. The customer will get a venti vanilla latte with almond milk in the following tier.

Paid Loyalty Program

The most appealing aspect of online loyalty programs is their free use. Customers see this as receiving free coupons and gifts, even though accessing these benefits requires a purchase or a specific action. However, a well-established brand can make the program subscription-based. Some businesses provide a VIP program for which customers need to pay a membership fee. As a member of this VIP program, customers get access to benefits such as discounts, gifts, and priority access to events.

Amazon Prime is the known example of a premium loyalty program in the e-commerce industry. Members can access free next-day shipping, a streaming platform, and other privileges for $139 per year.

Tiered Loyalty Programs

Tiered programs are based on the concept that the more customers spend, the higher the rewards tier they can climb. It is popular with online customers because they allow users to advance through the program, earning better benefits as they spend more money or earn more points. This is frequently utilized by businesses whose customers make occasional, expensive transactions, like the tourism industry. Numerous airlines have implemented this type of service. The objective is to retain members for the long term.

The Sephora Beauty Insider reward program is the retail industry’s most-discussed tiered program. This loyalty program has over 17 million members in the United States and is responsible for 80% of the company’s revenues. Different tier level has different perks, which encourages customer loyalty and engagement with the brand.

Hybrid Programs

In most cases, e-commerce businesses opt for a Hybrid loyalty program, which combines aspects of the above programs to improve efficiency. For example, Kiehl’s Rewards provides a guaranteed free birthday present and a $10 reward for every $100 spent. The idea is to identify aspects of several programs that support one another.

How Average Order Value Works and How to Improve It with Loyalty Programs

Average order value (AOV) is a measure that estimates the average amount spent per transaction on a website, in an online store, or during a given period. Knowing the company’s average order value enables the business to evaluate its pricing strategy and online marketing efforts. The average order value is determined by dividing the total monthly revenue by the number of orders placed during the month. Let’s assume that the online shoe store has a total income of $10000, which is comprised of 250 orders. Therefore, your average order value will be $10,000 / 250 = $40.

How Average Order Value Works and How to Improve It with Loyalty Programs

Using customer loyalty programs is a great way to increase the average order value, customer engagement, conversion, and the number of repeat purchases. This is because they want customers to keep coming back or even buy more in one order so they can earn rewards. Businesses can start a customer loyalty program in various ways. They could give discounts to customers who buy from them more than once or give customers points they can use to get free products. Customer rewards programs show that businesses care about their customers by giving them more buying power and making them feel like they’re in an exclusive club.

This case study gives a specific example of how customer loyalty programs can increase AOV. Ouidad, a company that makes hair care products, was having trouble with online engagement, getting customers to become brand advocates, and bridging the gap between their physical store and e-commerce. Annex Cloud’s solution included Social Login, which made creating an account easy and gave Ouidad access to demographic data. Also, customers were rewarded for their loyalty by making it easy to share on social media and get points.

How can Decentralisation Help in Improving Loyalty Programs?

Following are the 5 ways through which decentralization rewards programs can benefit customer experience and loyalty:

A More Streamlined Experience

Managing the company and the customers can be challenging when firms provide many loyalty programs. The absence of a simplified customer loyalty program leads to missed opportunities, waste rewards points, and dissatisfaction.
This decentralized method makes managing and keeping track of the loyalty program easier, saving time and giving the customer more value. This method gives customers more freedom and options, which makes them more likely to spend more.

Loyalty Rewards that Get More Valuable over Time

Brands can make coins that can be used with other brands. A report from Kaleido Insights says that these digital reward coins can be used in different places and is a business opportunity for brands. Digital coins powered by blockchain are much more flexible and easy to use than loyalty points because they can be used like money.

Customers who join these loyalty programs can trade these loyalty coins for another digital currency or money. This gives people more options for using their digital reward coins. This makes the loyalty program more valuable and makes people more likely to buy more from the brand. Digital reward coins can even be used to buy goods or services from companies other than the ones that gave them out. This is because the digital coin has value outside the company also.

A Safe User Experience

A PwC survey found that nearly 70% of consumers are worried, especially when giving away personal information and customer data. This makes sense since online fraud is becoming more and more common. These risks can be reduced with blockchain technology. One of the best things about cryptocurrencies is that they can be used without giving out personal information. Or, if they need to, they can use blockchain to make the information safer.

People have been using fake transactions to get loyalty rewards for purchases they never made in nearly 72% of loyalty programs. Blockchain records are completely open and easy to track. This makes it hard for unauthorized transactions to go unnoticed. People will have a harder time “cheating” the loyalty program.

More Flexibility

Customers like loyalty programs that give them Flexibility. With blockchain loyalty programs, customers wouldn’t have to wait to get points. Instead, they might be able to get them and use them right away. Also, it’s easier to keep track of blockchain rewards, and you can get them in smaller amounts. There are also more ways to get involved, like local campaigns, partner offers, biometric authorization, and content tailored to the user.
The information in the ledger is safe and well-organized. It’s a great place to find targeted content based on big data analysis and artificial intelligence (AI). AI can be used, for example, to send each customer a personalized message with the right offer and reward at the right time.

Reduce Program Expenses

One thing that stops loyalty programs from growing is that they take time and money to run. This cost would be much less with a distributed ledger. The money saved can be returned to the customer through a lower minimum balance needed to redeem rewards points or better customer experiences to increase customer loyalty and engagement with the brand.

Top 5 Loyalty Program Software in the Middle East


Giftbit’s software for loyalty programs makes it simple to detect, reward, and incentivize the audience by mailing gift cards. Giftbit provides access to hundreds of leading gift card companies, including Visa and Amazon. In addition, businesses may choose from a variety of gift card companies for the recipient to choose from or donate to. Giftbit is one of the most cost-effective loyalty software options due to its unique click-to-claim concept. This is especially relevant for large campaigns.

Businesses utilize Giftbit to acquire new users, increase sales, and receive growth insights. In 2016, Giftbit extended to incorporate the Lightrail platform. Lightrail gives tools for branded currency to retailers. Companies integrate Lightrail’s points system with Giftbit’s automatic incentive fulfillment. This produces an integrated loyalty and rewards system.
Giftbit gives complete data on the status of each gift card, unlike other solutions where businesses have no visibility into whether the cards have been claimed. In this method, the organization can acquire a deeper understanding of the program’s ROI.


LoyalZoo is an easy-to-use software system for loyalty programs. It facilitates the rapid creation and deployment of in-store loyalty programs for independent enterprises. The LoyalZoo app is aware that those with rewards cards spend more and are valuable to businesses. This is because cardholders typically spend more per visit than non-cardholders. Therefore, LoyalZoo focuses on providing a configurable interface for digital punch cards.

Since LoyalZoo adapts to the business, businesses have complete control. Customers can be added to the POS system via their phone number or email address. Then, points or stamps are provided to clients by text or email, eliminating the need for them to download an app. The app is available for customers who want to utilize it.


FiveStars is a strong rewards program software that enables organizations to develop customized rewards programs. It helps businesses to switch from traditional punch cards to digital, adaptable rewards programs. Businesses can establish rapport with clients by offering them prizes at the appropriate moment. This increases traffic by allowing customers to send promotions with a few simple clicks.

FiveStars assists businesses in numerous areas, including restaurants, apparel, health and beauty, and retail. The software enables these organizations to give customers personalized offers and effective promotions. It’s marketing done automatically and at the appropriate time.


Tapmango offers organizations the tools they need to establish their reward program. Setup takes about 30 minutes, and firms may tailor their programs from top to bottom. Customer rewards, discounts, and information can all be modified.

Tapmango enables businesses to communicate with their customers via SMS, mobile push, and email. Businesses can establish ‘happy hours’ for their customers by selling unique things. Businesses can even provide quick promotions, allow clients to prepay for things by text message, or link their mobile ordering system and loyalty program into a single interface. Tapmango connects with all major point-of-sale (POS) systems, including Vend, Square, Lightspeed Retail and Restaurant, Mindbody, Checkfront, and others. Tapmango can coexist with any other POS system and be up and running in minutes.

Kangaroo Rewards

Kangaroo Rewards makes it simple for any business to set up a loyalty program, so it can be started in minutes. This loyalty program software lets businesses completely personalize the program to match the brand, including personalizing each customer’s experience for enhanced consumer engagement.

It provides the brand with various program structure options, including a points-per-dollar structure and a tier system. Customers can be rewarded for visiting the store, spending a certain amount on one purchase, or purchasing a specific product, among other things. Automatic time-based awards are also available, allowing businesses to reward customers on their birthdays or urge them to return if they haven’t bought for a certain period. They can also create as many reward rules as they want.
Customers can access the program via a Kangaroo app, eliminating the need to carry a loyalty card. Furthermore, a business dashboard provides critical information about consumer behavior, allowing businesses to adjust their program based on what customers find most engaging.