Guide to Customer Loyalty in the eCommerce Industry

Building e-commerce customer loyalty is crucial for driving long-term success. 

According to research, the widely accepted customer retention rate for the e-commerce industry is 31%. But if e-commerces handle their customer base well and put effort into building customer loyalty, some companies may enjoy a considerably higher customer retention rate. 

A well-designed e-commerce loyalty program boosts customer retention, increases lifetime value and fosters deeper connections with your audience. 

In this complete guide to e-commerce loyalty, we’ll explore proven strategies to help you nurture customer relationships, create personalised rewards programs, and ensure your online store stands out. 

Whether you’re new to loyalty programs or looking to optimise an existing one, this guide will provide actionable insights to keep your customers coming back for more.

Download our guide to get all the insights you need and a special page with tips & tricks you can use to boost your e-commerce customer retention tactics!

What is eCommerce loyalty?

E-commerce loyalty refers to strategies and programs designed by online businesses to retain and reward their most valuable customers. 

These programs typically offer incentives like exclusive discounts, reward points, and personalised offers in exchange for repeat purchases and brand engagement. 

Whether free or membership-based, e-commerce loyalty programs aim to enhance customer satisfaction, increase lifetime value, and foster brand loyalty by encouraging long-term relationships and higher customer retention.

In 2023, global retail e-commerce sales reached an estimated USD 5.8 trillion. 

Projections indicate a 39% growth in this figure over the coming years, with expectations to surpass eight trillion dollars by 2027 - successful customer loyalty strategies for online stores in such a fast-growing market are more important than ever.

What are the main challenges of brand loyalty in the eCommerce industry?

With a seemingly endless array of options, customers can easily jump from one brand to another, seeking better deals, faster deliveries, or more personalised experiences. The question isn’t just about how to attract customers, but how to keep them engaged and loyal in an environment that thrives on immediacy and convenience. 

Here are some of the core challenges brands face in fostering long-term loyalty with their online customers - and why you really need the benefits of e-commerce loyalty programs.

1. High Customer Expectations 

Customers expect personalised rewards and interactions at every stage of their buying journey. Gone are the days when a simple “thank you for your purchase” would suffice. Modern consumers want brands to understand their preferences, predict their needs, and offer relevant recommendations that feel tailored to them.

2. Lack of Human Connection

While eCommerce platforms offer convenience, they often lack the human touch that can strengthen relationships. In a brick-and-mortar setting, customers can interact face-to-face with staff, build rapport, and enjoy a tactile shopping experience. Replicating that same connection online is a challenge. Brands must find ways to create meaningful, humanised interactions through their digital touchpoints.

3. Price Sensitivity and Competition

Price is a major factor driving customer decisions in eCommerce. With price comparison tools and the ability to quickly search for deals across platforms, customers can easily switch brands to find a better price. This creates pressure for brands to stay competitive while balancing profitability. The challenge is to move beyond price as the sole differentiator and instead create value through other means.

4. Engagement and Retention

Once a customer has made a purchase, how do you keep them engaged? Regular communication is key, but it must feel purposeful rather than intrusive. Many brands struggle to strike the right balance between staying top of mind and overwhelming their customers with promotions. The challenge is in creating engagement strategies that are thoughtful, rewarding, and aligned with the customer’s individual preferences.

How do you build customer loyalty in e-commerce?

To build customer loyalty in e-commerce, focus on creating personalised experiences, offering an engaging loyalty program, and providing exceptional customer service. 

Start by tailoring product recommendations and offers to individual preferences, then introduce a rewards program that encourages repeat purchases. 

Ensuring fast and responsive customer support builds trust, while optimising the user experience across your website makes shopping seamless.

High-quality products, regular communication through email or social media, and gathering customer feedback also strengthen loyalty, fostering long-term relationships with your audience.

1. Personalisation

Being relevant to customers is imperative when it comes to e-commerce loyalty strategies, but in order to make email marketing and communications personalised to your customers, brands need more customer data. That's when a loyalty program comes handy: it's a great way to incentivise surveys and questionnaires completion and to gather data. An analytics module can help you turn this data into actionable insights.

2. VIP experiences

Speaking of personalisation, another great way to build loyalty in e-commerce customers is creating VIP experiences for your consumers: VIP clubs and paid loyalty programs are usually invitation-only or something that customers can buy their way in using points or paying a fee. Insiders usually enjoy additional benefits - which in turn keep them motivated and make them feel like they're receiving a really exclusive treatment.

3. Regular communications

Among the most successful customer loyalty strategies for online stores, keeping in touch with your customers in an omnichannel way is imperative when it comes to customer loyalty in e-commerce. Use synchronous and asynchronous communication, website, mobile channels - and engage with your customers with the right message at the right time and through the right communication channel with the right marketing module.

4. Continuously engage customers

Many brands wonder how e-commerce brands use loyalty to increase sales, and the first thing we can say is that you shouldn't just reward customers when they make a purchase, as it limits your chances to increase their emotional loyalty. Here are a few top e-commerce loyalty program ideas for 2024 when it comes to incentivize your customers:

• Reward your customers for friend & family referrals.
• Reward your customers for leaving reviews.
• Reward your customers for engaging with your brand on social media - using a specific social media module like Gravitate.
• Reward your customers for completing surveys and questionnaires.
• Reward your customers for frequent logins.

How can eCommerce companies improve customer loyalty?

If you’re looking for the top e-commerce loyalty program ideas and how to build loyalty in e-commerce customers, you can check these best practices:

1. Enhance Personalization

Customers crave personalised experiences. Use customer data to deliver tailored product recommendations, customised emails, and relevant content. This approach makes customers feel understood and valued, encouraging them to return.

2. Launch an Engaging Loyalty Program

Create a loyalty program that rewards meaningful interactions. Instead of generic discounts, offer points for purchases, exclusive access to new products, and members-only promotions. Design tiered systems to motivate customers to increase their spending and deepen their loyalty.

3. Simplify the Customer Experience

Streamline the shopping journey to eliminate friction. Optimize website navigation, speed up load times, and simplify the checkout process. Provide transparent pricing and clear return policies to build customer confidence and encourage repeat purchases.

4. Adopt Omnichannel Strategies

Ensure a seamless experience across all platforms. Allow customers to earn and redeem rewards regardless of whether they shop online, via mobile apps, or in-store. This consistency reinforces the brand's commitment and enhances customer satisfaction.

5. Incorporate Gamification

Make shopping fun with gamification. Use badges, challenges, and leaderboards to engage customers. Reward them for actions like sharing on social media or writing reviews, transforming their loyalty journey into an interactive experience.

What are the best loyalty programs in the eCommerce industry?

Ikea

IKEA Family has one of the most successful customer loyalty strategies for online stores, boasting over 150 million members. This program is open to everyone and free to join, setting it apart from a standard IKEA account by offering unique benefits and discounts to its members.

The IKEA Family card provides numerous advantages for members, even when they aren’t making purchases. For instance, the "Spin to Win" promotion captures customers' attention and creates excitement in an entertaining way.

IKEA Family employs gamification to engage customers beyond the typical shopping experience. In contrast to many retailers, IKEA does not operate on a points system. Instead, it focuses on exclusive perks, benefits, and special content for its members.

Surprise and delight offers serve as compelling incentives and should be utilised more frequently, rather than just on members’ birthdays. Benefits such as exclusive events and access to workshops help integrate the membership into a customer’s lifestyle.

Members receive surprise and delight offers via email, enjoy complimentary workshops and events, and benefit from free Oops-assurance (coverage for damage during transport or assembly of IKEA furniture).

Tickit by Dubai Holding

Tickit is one of the most popular e-commerce loyalty programs in the UAE, enabling members to effortlessly earn points through over 2,000 participating brands and e-commerce sites without the need to present an app or a physical loyalty card.

Members can easily accumulate and redeem points by linking a payment card to the app, allowing them to shop as usual at more than 2,000 participating outlets throughout the UAE. 

Points are automatically credited without requiring users to show the app or scan receipts. Redemption is facilitated via a virtual card within the app.

White Label Loyalty provided both the front-end and back-end solutions for the loyalty app, ensuring users earn points automatically without any extra steps. The seamless redemption process through a virtual payment card, which can be added to users' mobile wallets, creates a smooth omnichannel experience.

Tickit stands out as the first program in the Middle East to offer this effortless redemption feature, enhancing the overall shopping experience for users. 

Within less than a year of its launch, Tickit has emerged as the second-largest loyalty program in the UAE in terms of participating outlets, delivering value to customers through a continuously expanding network of brand partners.

You can check out our case study to find out how Tickit achieved all these results.

Sephora

Sephora’s VIP program is recognized as one of the best e-commerce loyalty programs globally, allowing customers to earn points on every purchase through a tiered system that offers a unique set of perks and incentives.

The Beauty Insider Program features three tiers: Insiders, VIB, and Rouge. Customers earn one Beauty Insider point for every dollar spent, with tier progression based on spending levels. 

While shoppers can easily ascend to the Insiders tier for free, moving up to the VIB or Rouge tiers requires consecutive purchases of $350 or $1,000, respectively. Each tier offers various benefits, including:

• Savings: Beauty Insider cash, seasonal savings events, free standard shipping, and points for discount events.
• Samples: Free birthday gifts, sample rewards, and exclusive gifts.
• Experiences: Point multiplier events, meet-and-greets, points for services, sweepstakes, and early access to products.

Beauty Insider members enjoy exclusive rewards such as in-app offers, event invitations, first access to new products, and exclusive sales throughout the year.

The program fosters a sense of exclusivity for customers at each tier, creating a feeling of inclusion within the Sephora community.

Cult Beauty

Cult Beauty's loyalty program, known as Cult Status, is an amazing example of how e-commerce brands use loyalty to increase sales.

Members earn Status Points with every purchase, unlocking exclusive perks as they progress through various levels.

Members start with Cult Status, which welcomes new members with £5 off their birthday and exclusive access to unmissable offers, and can rise up to level three which grants free next day delivery on all UK orders, a £25 birthday discount, priority access to Goody Bags, and a dedicated Personal Shopper.

What makes Cult Status effective is its ability to engage customers through a structured rewards system that encourages spending and fosters loyalty. Each level offers valuable benefits that enhance the overall shopping experience while creating a sense of belonging within the beauty community. 

The program strengthens the emotional connection between Cult Beauty and its loyal customers by providing personalised shopping experiences and exclusive perks, such as early access to Goody Bags and substantial birthday discounts.

Net-A-Porter

Known for offering an extensive range of women's fashion, Net-a-Porter has one of the most successful customer loyalty strategies for online stores. 

A pivotal aspect of this dedication to customer satisfaction is its exclusive loyalty program, Net-a-Porter Rewards, which enhances the luxury shopping experience by recognizing and rewarding loyal customers.

The program begins with a Silver tier, progressing through Gold, Platinum, and culminating in the prestigious EIP level, which requires an annual spend of at least £10,000 to achieve. 

What makes Net-a-Porter Rewards particularly compelling is its emphasis on exclusivity and personalization. The tiered structure encourages increased spending, allowing customers to feel a sense of progression and aspiration as they work towards higher tiers and their associated perks. 

Customer service is another cornerstone of the Net-a-Porter Rewards program. Platinum and EIP members receive priority care, ensuring that their needs are prioritised. 

The convenience of communicating purchases via WhatsApp, along with options like same-day delivery and a 'try before you buy' service, further exemplifies the brand's commitment to creating a seamless shopping experience. 

This level of dedication is reflected in the relationships forged between personal shoppers and clients, creating a network that extends beyond transactions.

Net-a-Porter’s Rewards program masterfully combines exclusivity, personalization, and exceptional customer service to redefine the luxury shopping experience. 

The tiered structure not only entices customers to spend more but also fosters loyalty through meaningful relationships and high-quality service.

Frequently Asked Questions (FAQs)

How do you identify loyal customers in ecommerce?

To identify loyal customers in e-commerce, track key loyalty metrics like repeat purchase rate, customer retention rate, and customer lifetime value (CLV). Monitor your churn rate and Net Promoter Score (NPS) to assess customer satisfaction and loyalty. Implementing a loyalty program and tracking its performance is also crucial to gauge engagement and reward long-term customers.

What is e-commerce loyalty?

E-commerce loyalty is about retaining customers by offering rewards, exclusive discounts, and personalised experiences for repeat purchases. Loyalty programs, whether free or paid, encourage long-term engagement and trust, turning shoppers into loyal brand advocates who spend more and contribute to business growth.

Do loyalty programs work in ecommerce?

Loyalty programs are highly effective in e-commerce, boosting customer retention, increasing purchase frequency, and reducing churn. By offering exclusive perks, discounts, or rewards, brands encourage repeat purchases and build long-term relationships. Well-designed loyalty programs drive revenue and deepen customer engagement.