How to Build a Successful E-Commerce Loyalty Program

Getting new customers is hard but keeping them is even harder. That’s where e-commerce loyalty programs come in. These programs are designed to reward customers, encourage repeat purchases, and build long-term brand loyalty. They help businesses stand out in crowded markets and keep their existing customers coming back for more.

A good loyalty program doesn't just offer discounts. It makes customers feel valued. From offering points on purchases to exclusive perks, loyalty programs can boost customer lifetime value while also helping brands collect valuable customer data. More importantly, they create a better shopping experience and strengthen the bond between the brand and the buyer.

With big players like Amazon setting high standards for convenience and speed, smaller e-commerce brands need smart ways to compete. A well-designed rewards program can be the difference between a one-time buyer and a lifelong customer.

What Are E-Commerce Loyalty Programs?

An e-commerce loyalty program is a structured system used by online stores to reward customers for shopping, engaging with the brand, or completing certain actions like writing product reviews or referring friends. The goal is to make customers feel appreciated and to encourage them to shop again.

These programs often include a points-based system where customers can earn points with every purchase. Points can later be redeemed for discounts, free items, or early access to sales. Some programs go further, offering exclusive perks, tiered rewards, and even free subscriptions.

E-commerce loyalty programs also help brands gather insights from customer behavior. This data can be used to improve the customer experience, personalize marketing, and drive more sales. In fact, studies show that loyalty programs can increase revenue by 5–10% by boosting customer retention and encouraging larger basket sizes.

The key is to design a program that fits your brand and truly rewards your customers—not just with discounts, but with value that builds a deeper emotional connection.

What Are the Challenges for E-Commerce Companies in Terms of Retention?

Customer retention is the foundation of a strong e-commerce business. But keeping customers loyal isn’t as simple as offering a discount. As the digital marketplace becomes more competitive, brands face several tough challenges that directly affect how well they can retain customers.

Going Outside the Buying Cycle

Most e-commerce brands focus heavily on the buying cycle pushing sales, sending promotional emails, and offering time-limited deals. But customers don’t shop every day. In between purchases, they may forget your brand unless you engage them meaningfully. Brands need to offer value beyond transactions.

This can include things like personalized product recommendations, engaging content, social media interaction, or even points for writing reviews. A loyalty program that rewards customers outside of purchases helps keep the connection alive and encourages future buying behavior.

Building Emotional Loyalty

Transactional loyalty is easy to earn with discounts or points, but emotional loyalty is what truly retains customers. It’s about creating a bond that goes beyond products. Customers want to feel seen and appreciated.

Programs that include perks like birthday rewards, early access to sales, and exclusive content can make customers feel special. Brands like Sephora do this well through their Beauty Insider program. They offer unique rewards that make customers feel like insiders, not just shoppers.

Fear of Amazon

Amazon is a looming threat for many e-commerce businesses. It offers unbeatable prices, fast shipping, and a seamless experience. Competing with Amazon on convenience or price is nearly impossible. Instead, brands must compete on experience.

Loyalty programs give smaller brands a chance to win over customers by creating a sense of community, offering personal touches, and rewarding engagement in ways that Amazon doesn’t. This builds a loyal base that shops with you not just for the product, but for the experience.

Simple & Convenient Buying Process

Customers expect a smooth, fast, and hassle-free shopping experience. If your site is slow, hard to navigate, or doesn’t offer multiple payment options, customers will leave. Even loyal ones. A loyalty program can't fix a poor user experience.

To retain customers, e-commerce brands need to match the convenience standards of industry leaders. This includes mobile optimization, guest checkout, real-time order tracking, and multilingual or multi-currency support especially for global brands.

When Discounts Don’t Help You Stand Out

Discounts used to be a sure way to drive retention. But today, they’re everywhere. If every brand is offering 10% off, that offer loses impact. Worse, relying on discounts can cheapen your brand. Instead, smart loyalty programs provide layered value like a tiered loyalty program that unlocks rewards as customers engage more.

These models give customers a reason to keep coming back without training them to wait for a sale. They also drive repeat purchases while building brand loyalty in a more sustainable way.

Types of E-Commerce Loyalty Programs

E-commerce loyalty programs come in various formats, each offering unique ways to engage and retain customers. Choosing the right type depends on your brand goals, customer behavior, and how you want to reward customers. Below are five of the most effective types of loyalty programs used by online retailers today.

Points-Based Loyalty Program

A points-based loyalty program is one of the most common and straightforward models. Customers earn points for each purchase they make and can redeem them for discounts, free products, or other rewards. This system encourages repeat purchases by offering a clear, easy-to-understand benefit. For example, a customer might earn 1 point per $1 spent, and 100 points could translate into a $10 discount.

Beyond purchases, points can also be earned through writing product reviews, sharing on social media, or referring friends. Programs like these drive customer engagement and provide brands with useful customer data. Brands like Starbucks and The North Face successfully use point systems to encourage frequent interactions.

Tiered Loyalty Program

A tiered loyalty program rewards customers based on their level of spending or engagement. The more they shop or interact with the brand, the higher they move up in the program, unlocking better benefits. For example, bronze members might get free shipping, while gold members receive exclusive products or early access to sales.

This model creates a sense of achievement and motivates customers to climb the ranks. It also helps brands segment their audience and deliver more personalized experiences. Sephora’s Beauty Insider is a great example, offering increasing perks at each loyalty tier, including birthday gifts, early product access, and special events.

Perks Loyalty Program

A perks loyalty program skips the points and tiers and offers instant benefits just for joining. These programs are designed to make customers feel valued right away, often offering things like free shipping, exclusive content, or member-only pricing.

This model works well for brands focused on emotional loyalty rather than transactional rewards. Customers don’t have to track points they simply enjoy the perks of being part of a community. This approach often improves the overall customer experience by reducing friction and delivering value from day one.

Subscription Loyalty Program

A subscription-based loyalty program charges a recurring fee for access to premium services, products, or benefits. In exchange, members often receive perks like faster shipping, early access to new items, or members-only deals. These programs drive strong retention by locking in commitment and delivering consistent value.

Walmart+ and Amazon Prime are leading examples. Although this model requires a strong value proposition, it can be very effective at increasing customer lifetime value and building long-term brand loyalty.

Partnership Loyalty Program

A partnership loyalty program involves collaborating with other brands to expand benefits for your customers. For example, a fashion brand might partner with a travel company, allowing customers to earn rewards for both clothing purchases and travel bookings.

This model increases the scope of rewards, attracts new audiences, and adds more value for customers without increasing your own cost. It’s also a smart way to build community and encourage engagement across complementary brands. Programs like Virgin Red offer points that can be used across a wide network of businesses, enhancing the customer experience through variety and convenience.

E-Commerce Loyalty Program Best Practices

Creating a loyalty program is only the first step. To truly retain customers and drive repeat purchases, your program needs to be engaging, accessible, and built around your audience's needs. Below are some essential best practices that make an e-commerce loyalty program successful and sustainable.

Engage Customers Outside the Buying Cycle

A major mistake brands make is only interacting with customers when it’s time to sell. But customer loyalty is built in the moments between purchases. Smart brands use loyalty programs to engage customers in non-transactional ways offering points for writing product reviews, following on social media, or referring friends through a referral program.

This type of engagement keeps your brand top-of-mind. It also strengthens emotional loyalty by showing that you value more than just spending. For example, giving customers points for completing style quizzes, uploading user-generated content, or attending online events adds depth to the relationship.

Omnichannel Integration

Today’s customers shop across devices and platforms. Whether they’re on your website, mobile app, or even in-store, their loyalty benefits should be consistent. A successful e-commerce loyalty program must be omnichannel seamlessly connecting customer activity and rewards across all touchpoints.

This means a customer should be able to earn and redeem rewards whether they shop via mobile, desktop, or social media. Brands like Ulta Beauty excel at this by syncing loyalty data across digital and physical experiences. A unified view also helps you track customer behavior more accurately and personalize the customer experience.

Dedicated Membership Page

Your loyalty program should have its own space where customers can clearly see their benefits, track their progress, and understand how to earn rewards. A dedicated membership page enhances transparency and encourages participation.

This page should be easy to navigate and mobile-friendly. It should display the customer’s current tier, point balance, available rewards, and actions they can take to earn more. Including engaging visuals and personalized content increases interaction and keeps members coming back to check their status.

A well-designed membership page also acts as a powerful conversion tool for non-members. By clearly showcasing the value of the program such as early access to sales, free shipping, or special perks you can encourage more sign-ups.

Multi-Currency & Multi-Lingual Support

If your e-commerce business operates internationally, your loyalty program must reflect that. Customers should be able to earn points and enjoy benefits regardless of their location. This means supporting multi-currency transactions and providing content in multiple languages.

Allowing users to shop and earn rewards in their local currency eliminates friction and builds trust. Likewise, offering a loyalty interface in their native language improves the user experience and boosts engagement. Brands that overlook this are likely to lose international customers to more adaptable competitors.

E-Commerce Loyalty Program Examples

Learning from real-world examples can show how top e-commerce brands design their loyalty programs to reward customers, increase repeat purchases, and build strong brand loyalty. Each of the following brands uses a unique strategy tailored to their audience but they all share one thing in common: they deliver clear, ongoing value to members.

Walmart+

Walmart+ is a subscription loyalty program designed to compete with Amazon Prime. For a monthly or annual fee, members enjoy free same-day delivery, fuel discounts, mobile scan-and-go checkout, and early access to special sales events.

What sets Walmart+ apart is how it enhances the overall shopping experience while offering practical value. The program appeals to loyal Walmart shoppers who want speed, savings, and convenience. This model also helps Walmart retain customers by locking them into a premium service that’s worth staying subscribed to.

Shein Bonus Point Program

The Shein Bonus Point system is a strong example of a points-based loyalty program that encourages high levels of engagement. Customers can earn points not just through purchases, but by writing product reviews, checking in daily, and engaging with Shein's social media challenges.

Points can be redeemed for discounts on future orders, turning casual visitors into repeat customers. Shein's loyalty program also gamifies the experience, making shopping fun and interactive. This approach is especially effective with younger demographics who respond well to fast rewards and constant engagement.

Aldo Crew

The Aldo Crew program is a tiered loyalty system designed to grow with customer engagement. Shoppers start at the base level and unlock more benefits like free shipping, birthday discounts, and early access to sales as they move up.

What makes Aldo’s program effective is its simplicity and clear progression. Customers can easily see what they need to do to reach the next tier, which encourages them to keep shopping. This model helps increase customer lifetime value by giving shoppers a reason to stay connected with the brand.

Sephora Beauty Insider

The Sephora Beauty Insider, often mistakenly referred to as “Shepherd,” is one of the most successful e-commerce loyalty programs globally. It uses a mix of tiers, points, and perks to cater to a wide range of beauty shoppers.

Members earn points on every purchase, which they can redeem for sample products, exclusive sets, or even experiences. As they spend more, they unlock access to higher tiers with better rewards. Sephora also makes members feel like VIPs by offering birthday gifts and sneak peeks at new products. This emotional connection drives brand loyalty and long-term engagement.

IKEA Family

IKEA Family is a perks-based loyalty program that offers value beyond discounts. Members get access to exclusive product offers, free workshops, and extended return policies all without needing to collect points.

This program focuses on making customers feel part of a community. IKEA understands that customers feel more loyal when they’re treated like insiders, not just shoppers. By emphasizing customer experience over transactional rewards, IKEA Family builds deep loyalty without the complexity of a points system.

Conclusion

E-commerce loyalty programs are more than just tools for driving sales they're essential for building lasting customer relationships. With rising competition and changing consumer expectations, brands must go beyond discounts and focus on delivering real value. Whether through a points system, tiered rewards, or exclusive perks, the goal is to create a seamless, engaging experience that makes customers want to return. Loyalty programs that engage customers outside the buying cycle, work across channels, and cater to global audiences stand out in today’s crowded market.

By studying successful programs like Walmart+, Shein Bonus Points, and Sephora Beauty Insider, businesses can gain actionable insights to design strategies that boost repeat purchases and improve customer lifetime value. Ultimately, the most effective loyalty programs are those that make customers feel seen, rewarded, and connected to the brand on a deeper level. Start small, measure often, and always put the customer experience at the heart of your loyalty strategy.