Canada Loyalty Management Market Overview, 2029

The Canadian loyalty landscape is a fascinating blend of high program participation, point hoarding tendencies, and a growing preference for mobile-centric redemption options. Canadians hold an average of 14.3 loyalty programs, significantly higher than the global average, showcasing their deep engagement with rewards programs. However, a surprising disconnect emerges – despite active participation, Canadians only actively use an average of 7.36 programs, leaving a treasure trove of unredeemed points. These points to a critical opportunity for loyalty program providers. Understanding this redemption gap is key to unlocking true customer loyalty. One differentiating factor in the Canadian market is the cultural preference for familiarity and trust. Unlike their American counterparts who readily embrace new programs, Canadians tend to stick with established loyalty programs, particularly those offered by trusted brands. This presents a strategic advantage for long-standing retailers and financial institutions with well-established loyalty programs. However, this loyalty can be a double-edged sword. While it fosters program stability, it can also lead to program fatigue and a lack of innovation. To address this, Canadian loyalty programs are undergoing a digital metamorphosis. A recent study revealed that 51% of Canadians now prefer mobile loyalty programs, with usage surging by 20% since 2020. This highlights the critical role of user-friendly mobile apps that not only simplify point tracking and redemption but also personalize the experience. Recognizing the oversaturation of programs, loyalty providers are forging partnerships to allow points from different programs to be redeemed within a single ecosystem. This not only enhances member value by offering a wider redemption pool but also fosters collaboration between businesses. A recent example is the PRESTO network, a reloadable fare card used across various public transit authorities in Ontario. PRESTO points can now be redeemed for points in the Scene+ loyalty program, encompassing major retailers like Sobeys and Shell stations. Another intriguing development is the growing emphasis on experiential rewards. Canadians, particularly younger demographics, increasingly seek unique and memorable experiences over traditional point-based rewards. Recognizing this, several loyalty programs are incorporating travel packages, concert tickets, and exclusive access to sporting events. For instance, Scene+, Canada's largest points program, recently partnered with Cineplex to offer members exclusive movie screenings and behind-the-scenes experiences, driving significant engagement and positive brand sentiment.
According to the research report "Canada Loyalty Market Overview, 2029," published by Bonafide Research, the Canadian Loyalty market is expected to add more than 400 Million USD from 2024 to 2029. On the one hand, a growing emphasis on value drives program adoption. Canadians are famously budget-conscious, and programs that offer points, discounts, or cash back on everyday purchases hold strong appeal. Furthermore, the dominance of a few major grocery chains across the country fosters a landscape where loyalty programs can be a key differentiator, influencing where consumers choose to shop. Technology is also a key driver, with Canadians embracing mobile apps and digital platforms to manage their loyalty programs seamlessly. This allows for real-time reward tracking and personalized offers that cater to individual spending habits. However, the Canadian loyalty market also faces some hurdles. A highly competitive landscape means Canadians are bombarded with loyalty program options, leading to program fatigue and a declining return on investment for businesses. Furthermore, the ever-growing number of loyalty programs can make it difficult for consumers to keep track of their points and rewards, leading to frustration and program abandonment. Data privacy concerns are another challenge, as Canadians become increasingly wary of how their spending habits are tracked and used for targeted marketing. Additionally, the cost of maintaining and innovating loyalty programs can be significant for businesses, requiring a careful balancing act between offering attractive rewards and maintaining profitability. Despite these challenges, the Canadian loyalty market shows signs of resilience. There's a growing trend towards coalition programs, where points earned at one retailer can be redeemed at another, offering consumers more flexibility and value. Additionally, a focus on personalization and gamification is emerging, with programs offering tiered memberships, exclusive experiences, and engaging challenges to keep members active.
When it comes to program offerings, some companies focus on solutions. These solutions might involve tiered memberships with escalating rewards based on spending, gamification elements that make earning points more engaging, or even personalized offers based on a customer's past purchases. Other programs focus on services, such as offering exclusive discounts, early access to sales, or points that can be redeemed for travel or event experiences. Looking at the types of enterprises using loyalty programs, the retail sector is a major player. Canadian retailers leverage loyalty programs to encourage repeat business and build customer relationships. Similarly, the Banking, Financial Services, and Insurance (BFSI) industry uses loyalty programs to incentivize customers to use their credit cards, invest in their products, or explore other financial services. The hospitality industry, from hotels to restaurants, also relies on loyalty programs to keep guests coming back, often offering rewards like free nights or complimentary meals. Beyond these core industries, Canadian loyalty programs can be found in media and entertainment, rewarding moviegoers or music streamers for their loyalty. The IT and Telecommunications sector uses loyalty programs to keep customers subscribed to their services and encourage them to upgrade plans. Manufacturers might offer loyalty programs to incentivize bulk purchases or reward distributors for promoting their products. The transportation industry, including airlines and public transportation providers, can use loyalty programs to encourage frequent travel and reward regular customers. Finally, other sectors like consumer electronics and grocery stores are also jumping on the loyalty bandwagon, offering points or rewards to keep customers engaged and coming back for more.
By operator, the market is divided between Business-to-Business (B2B) and Business-to-Consumer (B2C) programs. B2B loyalty programs are offered by companies like Points International or Aimia to other businesses, typically large retailers or restaurant chains. These B2B providers handle the entire loyalty program infrastructure, from designing reward structures to managing points redemption. This frees up Canadian businesses to focus on their core operations while still offering a loyalty program to their customers. The B2C segment, on the other hand, caters directly to businesses that want to manage their own loyalty programs. Here, companies like LoyaltyOne provide the software and tools businesses need to run their programs in-house. This allows Canadian businesses to tailor their loyalty programs to their specific customer base and brand identity. Currently, the B2C segment is the leader in the Canadian loyalty market, as many businesses prefer the control and flexibility of managing their own programs. By development, the market is divided between on-premise and cloud-based loyalty programs. On-premise programs involve installing and maintaining the loyalty program software on a company's own servers. This approach offers greater control and security but requires a larger upfront investment and ongoing IT expertise to manage. Leading solution providers like NCR or Oracle cater to this segment. Cloud-based loyalty programs, on the other hand, are hosted on a remote server by the loyalty program provider. This offers Canadian businesses a more scalable and cost-effective solution, as they don't need to invest in hardware or software maintenance. Leading providers in this space include Shopify or Salesforce. Cloud-based solutions are quickly gaining popularity in Canada due to their ease of use, affordability, and automatic updates.

Considered in this report
• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report
• Loyalty Management market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Offering
• Solution
• Services

By Enterprises Type
• Retail
• BFSI
• Hospitality
• Media & Entertainment
• IT and Telecommunications
• Manufacturing
• Transportation
• Others (Consumer Electronics, Grocery)



By Operator
• B2B
• B2C

By development
• On-Premise
• Clouds

The approach of the report:
This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience
This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Loyalty Management industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.