Loyalty programs: what to expect from them ? by Foxintelligence

Loyalty programs: what to expect from them ? by Foxintelligence

Black Friday has been the biggest sales day of the year. But Black Friday’s impact may last longer than planned: it has also boosted subscriptions to loyalty programs, like Amazon Prime’s subscriptions, which were + 63% greater than on normal days prior to Black Friday ¹.

Ecommerce loyalty programs have been flourishing over the past years. In exchange of a yearly subscription fee — usually between 20€ and 49€ in France, subscribers benefit from free delivery on a selection of items, discounts or other advantages — Amazon Prime includes access to Prime videos. These programs have become key performance drivers in the increasingly competitive French ecommerce market.

What can ecommerce websites expect from online loyalty programs? What are the key success factors of online loyalty programs?

Loyalty programs are boosting shares of wallet ², but how long does the honeymoon last ?

All analyzed loyalty programs ³ boost loyalty and shares of wallet. After subscribing to a loyalty program, customers are spending a higher share of their online budget at the merchant they subscribed to.

This boost is stronger on the short run, and decreases over the long run. On average, 90 days after subscription the uplift in share of wallet is 21,5%. But one year after subscription, the uplift falls to 12,7%.

Amazon Prime is the only loyalty program able to keep the flame burning

Amazon Prime’s strength lies in its ability to keep a higher and longer boost on its share of wallet after subscription, than its competitors. Indeed, the gain just after subscription is stronger and the erosion of this gain is much slower than for other merchants: Amazon remains at a healthy 25% increase in share of wallet even after one year of subscription.

Category cross selling is a key success factor for loyalty programs

Subscribers buy products from more categories than non subscribers, and the difference between the number of product categories bought by Amazon Prime subscribers and non subscribers is even greater than for other loyalty programs. Amazon Prime members buy products from 2,5 additional product categories ⁴ on average, within the first 90 days after subscription. Subscribers to other loyalty programs only buy from 1,5 additional categories within the first 90 days.

But most of all, Amazon Prime subscribers are buying from an increasing number of product categories along the year of subscription. Amazon Prime is the only loyalty program with such an impact: subscribers to other loyalty programs buy from a decreasing number of categories.

Increasing number of categories shopped by Amazon Prime subscribers goes along with an increasing frequency, both boosting the share of wallet after subscription.


(1): During the last four days of October: from October 26th to October 29th included

(2): Share of wallet: The share of wallet gives an indication about how much is spent by a population with a particular merchant. To get a customer share of wallet, you will divide this customer’s purchases with a specific merchant by what the customer spent in total for all purchases on ecommerce

(3): Average calculated on Amazon, Asos, Cdiscount, Showroom Privé which all have a loyalty program in place, respectively: Amazon Prime, Cdiscount à volonté, Asos Premier and Showroom Infinity

(4): Product category: we considered Amazon product categories as references

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