Why Latin American E-commerce Needs Blockchain Loyalty Programs
Latin America is the world leader in e-commerce growth. Online sales are expected to increase by 19% in the next five years — 8% above the global average — with the industry predicted to be worth an estimated $118 billion by 2021, according to WorldPay’s annual Global Payments Report.
“No-one can predict the global economic climate over the next five years, but we can be sure that consumer appetite for online and mobile shopping will continue to see extremely strong growth. The rise in smartphone adoption and the continued improvement in mobile networks have important implications for merchants looking to take advantage of an increasingly well-connected middle class with greater disposable income,” Shane Happach, CEO, Global eCom at Worldpay, explained.
This greater disposable income, Happach talks about will see an extra 155 million people shop online in 2018, with an average revenue of $330 dollars per customer in Latin America.
The stats are impressive when taken at face value, but the sheer growth of e-commerce is all the more remarkable when you consider that the region went through a recession as recently as 2016. With companies such as MercadoLibre, Linio and Peixe Urbano leading the way, the future is bright for e-commerce, and the opportunities are vast.
However, despite the obvious market potential, according to eMarketer the average number of online transactions per person per year in the region was the lowest in the world, at just 9.2 in 2016. People aren’t buying online as much as the market growth would suggest, which poses an immediate challenge to e-commerce businesses: shopping online has to be more appealing.
Loyalty programs could be the key to solving this disconnect.
Loyal customers are more profitable customers
Customers are attracted by loyalty programs. Research by Alliance Data shows that 63% of Gen Z and Millennials agree they have many choices of where to shop, so a brand must show them loyalty to earn their business. What’s more, a study from Technology Advice found that 82.4% of customers said they were more likely to shop at a retailer that offers some type of loyalty program.
A loyalty program not only makes shopping online more appealing for consumers, with e-commerce growing as quickly as it is in Latin America, it presents brands with an opportunity to retain more customers than the competition.
75% of consumers believe loyalty programs are part of their relationship with a brand, and these relationships lead to more spending — as much as 18% more per year more.
Room for loyalty program growth
A Global Retail Loyalty Sentiment report by Nielsen revealed that Latin America has the lowest self-reported loyalty program participation rates of any region in the world.
Does this mean e-commerce businesses should consider other ways to earn customer loyalty? ‘
Not at all. What it signifies is that there is room for growth.
Low participation in loyalty programs has a lot to do with the traditional model — most programs are offered by supermarkets and department stores. However, when asked about the most common way they use programs, entering information or logging into an online account on a retailer website came out on top.
An e-commerce business that implements a loyalty program with online functionality can appeal to consumer demands.
Listening to customers
In order for a loyalty scheme to be successful, it needs to be worthwhile for customers. Implementing a program needs to be done around what customers want in terms of features and rewards.
When asked by Nielsen which loyalty program features were most appealing, Latin American participants were keen for a platform to offer:
- The ability to choose among several types of rewards
- Personalized discounts
- Personalized product recommendations
- The opportunity to earn points for specified activities
- Integration with mobile payment systems
In terms of rewards, rebates or cash back and product discounts were the most highly valued.
This information can be used to build a platform that works to attract customers and fill a gap in the loyalty scheme market.
How BitRewards meets customer needs
BitRewards is designed to benefit the customer, aligning with their desires for online login, personalization, and frictionless rewards.
Our platform uses BIT Tokens, a type of cryptocurrency, in place of traditional points, which gives customers the chance to “buy today, spend today.” Rewards are earned in real-time, with BIT Tokens sent to the customer as cash back the second a transaction is completed. These can then be redeemed across multiple merchants without restriction, saved to increase in value, or exchanged for fiat currency and spent in physical stores.
Rather than spread points across different programs, BIT Tokens are placed in a single wallet which can be used at over one million stores thanks to our partnership with e-commerce platform Ecwld. And unlike points, tokens don’t expire and can’t be lost. They also won’t cease to exist should a merchant go out of business.
The customer-centric BIT Token system is something we were keen to replicate exploring the shopping experience. 87% of loyalty program members say they are open to having various details of their activity and behavior watched, monitored and traced in order to receive access to personalized rewards or engagements, according to Bond. By tracking purchase behaviors, our AI-based BitRecommendations tool is able to crowdsource recommendations for products and rewards, showing customers the content they want to see and serving up rewards that appeal to their interests.
Low-cost solution for merchants
Of course, while the customer experience is paramount, loyalty programs have to be viable for the merchant.
We’ve made sure this is the case.
The premium software is offered for free and is based on our innovative GIFTD product, which boasts a proven track record — increasing revenues by an average of 17%. GIFTD was founded in 2012 and its solutions are used successfully by over 500 merchants.
With the Latin American market set to grow exponentially in the coming years, there is no better time than now for e-commerce businesses to make their move. And with BitRewards, you have the platform to thrive where other businesses are failing — making online shopping more appealing through customer loyalty.