We see the companies in this report as disruptors in the space by focusing on client retention and building sustainable customer relationships to build itself as a key differentiator. The business across various verticals is shifting towards a customer-centric approach.

Brands continue to invest in loyalty programs and loyalty technology solutions to engage and retain consumers, as customers increase their focus on value and promotional offers.

Our report also highlights several loyalty trends and key success factors for loyalty players. We anticipate a rise in investment and consolidation as both financial and strategic investors look for new technologies to cope with the “new normal”.

Key trends highlighted in the report include:

• The global loyalty management market is estimated to reach $22.8BN by 2028, registering a 17% CAGR during 2023-28, mainly led by rising demand for personalized customer experiences (leading to emotional loyalty) and the adaptation of digital technologies.
• Personalization is driving high ROIs of loyalty programs A survey indicated that 80% of firms who evaluate the ROI of their loyalty programs reported a positive ROI with 4.9x more revenue than what they spend on average.
• Subscription-based loyalty programs are gaining traction with over 60% of digitally-savvy consumers under 35 planning to join at least one new paid program in the next year. Furthermore, the hybrid “freemium” model, has also gained prominence recently. In 2023, 8.1% of loyalty programs are freemium, with 23.7% of future program owners planning to launch such programs, indicating a potential mainstream shift towards hybrid “freemium” models.
• NFT-based loyalty programs & blockchain integration is a game-changer. NFT loyalty programs offer unique digital rewards tokenized on a blockchain, enabling verifiable scarcity and individual ownership. This innovation allows customers to collect rewards of varying rarity and trade them on secondary markets, providing flexibility and enhancing value.
• Leading firms are leveraging partnerships in loyalty programs to create value for their customers. Partnerships like FetchRewards – PIM Brands, Upside – Heritage Grocers Group & Sunoco, and Bilt Rewards -Lyft & Point.me are examples of novel loyalty experiences through expanded value propositions in an effort to improve customer acquisition and retention.
• M&A deal activity: The loyalty space witnessed a total of 45 deals since Jan’21. After witnessing a slump in M&A deal activity in 2022, the space is looking vibrant in 2023. Noteworthy deals in the space during 2023 include Reward Gateway by Edenred ($1.4BN), Quotient Technology by Neptune Retail ($505.5MM), and Power Finance by Marqeta ($164.1MM).
• Private Placement funding:The loyalty and rewards sector secured more than $2.7BN in total funding since 2021. However, contrary to the M&A deal activity, private placement deal activity remained relatively subdued in H1’23