The Challenge of Loyalty programs during ecommerce retrenchment

Ecommerce retrenchment reflects a period where online retailers face declining sales, rising acquisition costs, and cautious consumer behaviour. In India, the direct-to-consumer (D2C) market, particularly in Mumbai, has seen explosive growth, with the sector valued at $12 billion in 2022 and projected to reach $60 billion by 2027, according to Statista. However, economic pressures like inflation and reduced disposable income threaten this growth. Maintaining loyalty programs during ecommerce retrenchment becomes critical to retain customers and protect market share.

Strategies to Strengthen Loyalty Programs During Ecommerce Retrenchment

• Personalise Rewards to Drive Engagement

Customers crave customised experiences. Personalising loyalty programs during ecommerce retrenchment boosts engagement by aligning rewards with individual preferences. Use data analytics to segment customers based on purchase history and behaviour. For instance, a Mumbai D2C fashion brand could offer exclusive discounts on sustainable clothing to eco-conscious shoppers. A McKinsey study reveals that personalised experiences can increase customer retention by 10-15% and drive 20-30% higher satisfaction rates.

“Personalisation isn’t just a trend; it’s a necessity. Brands that leverage data to customised loyalty rewards see stronger emotional connections with customers,” says Priya Sharma, a D2C marketing strategist based in Mumbai.

• Optimise for Mobile and Omnichannel Experiences

With 42% of Indian consumers installing brand apps to access loyalty benefits, mobile optimisation is non-negotiable. Ensure loyalty programs during ecommerce retrenchment integrate seamlessly across websites, apps, and social platforms. A Deloitte report highlights that brands with strong mobile platforms offering exclusive incentives see 60% of app users displaying incentivised loyalty. For example, a Mumbai-based D2C beauty brand could integrate its loyalty program with WhatsApp, enabling customers to redeem points via a chatbot.

• Focus on Emotional Connections Over Discounts

While discounts drive short-term purchases, emotional connections sustain brand loyalty. During ecommerce retrenchment, loyalty programs should prioritise experiential rewards, such as early access to products or exclusive virtual events. A PwC survey indicates that 34% of consumers show true loyalty to brands with ethical practices, like sustainability. A Mumbai D2C food brand, for instance, could reward loyal customers with a virtual cooking class featuring local chefs, fostering a sense of community.

• Minimise Breakage to Maximise Value

Breakage unredeemed points signals disengaged customers. A McKinsey analysis notes that loyalty programs with high breakage lose potential sales, as inactive customers drift to competitors. Combat this by simplifying redemption processes and setting achievable reward thresholds. For example, a Mumbai D2C electronics brand reduced breakage by 15% by offering instant cashback on small purchases, encouraging repeat engagement.

• Leverage Referral Programs for Organic Growth

Referral programs amplify loyalty programs during ecommerce retrenchment by turning customers into advocates. A Zendesk study shows that referral programs boost retention and acquisition, with loyal customers providing social proof. Offer incentives like dual rewards, where both the referrer and referee gain points. A Mumbai D2C jewellery brand could reward customers with bonus points for referring friends, driving word-of-mouth marketing.

Case Study: Mumbai D2C Success

Consider “GreenVibes,” a Mumbai-based D2C sustainable lifestyle brand. Facing ecommerce retrenchment, GreenVibes revamped its loyalty program by offering personalised eco-friendly product recommendations and hosting virtual sustainability workshops for top-tier members. By integrating its program with a user-friendly app, the brand saw a 20% increase in customer retention and a 25% uplift in repeat purchases within six months, proving the power of loyalty programs during ecommerce retrenchment.

Future Trends in Loyalty Programs

Looking ahead, loyalty programs during ecommerce retrenchment will evolve with technology. Artificial intelligence and big data will enable hyper-personalised rewards, while blockchain could ensure transparent point tracking. A 2025 MDPI study predicts that emerging technologies will enhance customer trust and engagement by 30%. Mumbai D2C brands must stay agile, adopting these innovations to maintain loyalty in a competitive landscape.

Actionable Takeaways for Businesses

• Invest in Data Analytics: Use customer data to personalise loyalty programs during ecommerce retrenchment, ensuring rewards resonate with individual needs.
• Simplify Redemption: Reduce breakage by making points easy to redeem, boosting engagement and trust.
• Prioritise Mobile: Develop seamless mobile experiences to capture the growing base of app-loyal customers.
• Build Emotional Bonds: Offer experiential rewards to create lasting connections beyond transactional benefits.
• Encourage Referrals: Implement referral programs to drive organic growth and reinforce brand loyalty.

Conclusion: A Loyal Future Awaits

Loyalty programs during ecommerce retrenchment are more than a retention tool they’re a strategic asset. By personalising rewards, optimising for mobile, and fostering emotional connections, businesses can navigate economic challenges and build lasting customer relationships. As the ecommerce landscape evolves, brands that innovate their loyalty strategies will not only survive but thrive, turning customers into lifelong advocates.

About LawCrust

LawCrust Global Consulting Ltd. delivers cutting-edge Hybrid Consulting Solutions in Management, Finance, Technology, and Legal Consulting to ambitious businesses worldwide. Recognised for our cross-functional expertise and hybrid consulting approach, we empower startups, SMEs, and enterprises to scale efficiently, innovate boldly, and navigate complexity with confidence. Our services span key areas such as Investment Banking, Fundraising, Mergers & Acquisitions, Private Placement, and Debt Restructuring & Transformation, positioning us as a strategic partner for growth and resilience. With an integrated consulting model, fixed-cost engagements, and a virtual delivery framework, we make business transformation accessible, agile, and impactful.

For expert legal help, please contact us:

• Email: inquiry@lawcrustbusiness.com