Loyalty programs in the e-commerce industry are particularly developed to reward clients on any purchase, referrals or other useful act and to offer them some motivation for purchases made. Therefore, a reward program allows upselling, retention, referrals, and activation along with the provision of a strong offer with value to the merchants. Typically, a loyalty program is made up of a lot of parameters that are operational including but not limited to funding options, program design, and transaction types. It also includes some value criteria like earning rates, redemption thresholds, and redemption options. According to the Belly Inc., about 63.7% of small and medium scaled businesses used customer loyalty program in 2016. Similarly, Leapfrog Marketing Institute reported that approximately 38% of business executives have a specialized budget to increase customer loyalty program.
The Markets and Markets reports of 2016 revealed that the loyalty management industry is estimated to hit a record $4 billion by 2020. There is an additional $11 billion in referral sector and about $1 billion in digital gift cards. Apart from this, more than $50 billion loyalty points are given out every year. This means that the enrollment in the different loyalty programs in the e-commerce industry faces serious challenges despite the remarkable growth over the years. The Bond Loyalty Report of 2016 shows that North American consumers belong to 13.4 loyalty programs on average, but are only active in about half of those. Also, about 44% of consumers said they are “very satisfied” with the loyalty program experiences.
With several rewards/loyalty programs, some customers do not understand essence of undergoing extra actions which ultimately lead to a decrease adoption and low customer activity. About 70% of existing customers failed to stick in for a reward program as a result of the time required and inconveniences to complete the registration.
The rate of customers who were only active members of some of the loyalty programs only stood at 50 per cent according to the Bond Loyalty report of 2016. Moreover, about 20% from this value never redeemed their rewards and bonuses. About 20% of these members did not collect their rewards and bonuses. More so, based on the report, reward and loyalty members who did not redeem their bonuses are about 2.7 times likely to leave the program to join another program.
The majority of the existing rewards programs offer less motivation so as to encourage the customers into repeating purchases. Two of the major causes are; it is difficult to earn points for rewards and the loyalty programs didn't make provisions for offers that would have interested the customers.
Some of the merchants who want to have their own loyalty program need to not only invest effort, money, and time: they also need to make some arrangement to provide a strong customer support particularly for the loyalty/rewards program which may include the implementation of internal procedures and practices, hiring and training employees, and analysis.
About 64% of e-commerce traders prefer cash-back payments as rewards according to a survey report by CardLinx in 2017 and about 12% prefer reward programs related to the acquisition of miles, points or bonuses. In another sense, loyalty programs are still one of the most effective ways of customer revenue generation. About 87% of customers expect loyalty programs from different merchants according to a study by the Talech retail company. An integrated loyalty system by ARAW token could solve the problems, which would also provide convenient tools for customers to earn rewards and redeem them for valuable prices. With the introduction of the technology of Blockchain, creating such an ecosystem like ARAW token has become very easy. Our hypothesis that the new approach to rewards and loyalty program in the e-commerce world along with the use of blockchain and smart contracts can deliver synergy, is evident by the recent experiments of blockchain by Visa, MasterCard, and IBM.
Unlike some of the existing loyalty platforms that give points, ARAW token ensures the transfer of value into tokens and credits them directly to the customer’s crypto-wallet. Since the value of ARAW token is believed to increase with the growth of crypto-economy, the participating merchants on the ARAW token ecosystem will like to spend their tokens for additional purchases for every market share of the Blockchain based infrastructure and services. Also, our merchants will be receiving offers and updates from the participating retailers on ARAW token, which will further incentivize their future purchases.
It is practically free for our merchants to use the ARAW token platform. Since we already have the Loyalty wallet running on several platforms, the integration of ARAW token into the several E-commerce world is simple as it can't be easily installed with no special technical expertise. The mechanisms behind the workflow of spending and receiving ARAW tokens will be standard for all the participating members, and questions will be handled by the ARAW token customer support service who would provide technical support, guidance and quality certainty.
All the customers would assume slightly that the crypto-currency received is “for free”. It will encourage their interest in investing into cryptocurrencies thus initiating the demand for rewards that are valuable from where they shop.
We reward our retailers in the integrated open-loop loyalty ecosystem and offers a convenient user connection that is customer based. All our users would be provided just one crypto-wallet which is accessible from a mobile app or web of any of the merchant.