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One area that has attracted limited attention among researchers has been the evolving structure of loyalty programs. Traditionally, retail, consumer goods and service providers have used loyalty programs (LPs) to create and sustain a solid customer base and to gain insights into shopping behavior for better segmentation and targeting (Bolton et al., 2000; Meyer‐Waarden, 2008). This popular tool is used by more than 60% of retailers in Europe (Bombaij & Dekimpe, 2020). As LPs transformed from mere promotional tools into customer relationship management tools (Kang et al., 2015), they started offering better prospects to create long-term loyalty compared to ad-hoc promotional campaigns and discounts (Dowling & Uncles, 1997; Villacé-Molinero et al., 2016). However, as the competition among programs intensified over time, the reluctance of consumers to become active users has increased (LoyaltyOne, 2017). For instance, in a survey of 2,000 consumers in the US, each household was observed to have 18 memberships on average, half of which were not used actively (Kreis & Mafael, 2014). The increasing complexities and inconvenience involved in tracking each program separately have created an obstacle to greater adoption. Considering that in the focal point of this study, Turkey, there are 165 large-scale LPs active as of 2018 (Ketchup Loyalty, 2018), thus, a mounting burden on consumers in keeping track of each program is evident. To overcome the consumer reluctance in becoming an LP member, the distinct rewards and benefits offered, and the value created through them emerge as promising instruments for LP sponsors and consumer companies (Mimouni-Chaabane & Volle, 2010; Yi & Jeon, 2003).
In addition, the increasing mobility of consumers and improving capabilities of smart devices have fostered a need for a superior interface to the plastic card. Multichannel buying behavior, the need to get personalized offers, contextual needs related to time and place of shopping, the need to use the rewards in a variety of sectors, all fueled the emergence of new digital LP formats (Ieva & Ziliani, 2017). Within this context, the use of coalition (multi-vendor) loyalty programs (CLP) that brings together a variety of brands from different industries and their digital mobile versions, the mobile coalition loyalty applications (CMLPs), have emerged as promising tools to address those changing needs. Both academicians and practitioners have evidenced several benefits of CLPs for organizations. For example, seven large airlines have earned income exceeding $4 billion by establishing CLPs together (Evanschitzky et al., 2012), and there is evidence indicating that shopping partners of LPs are among the most influential factors affecting customer satisfaction and loyalty (Zakaria et al., 2014).
Furthermore, CMLPs provide a good platform that small to medium size enterprises (SMEs) can utilize. Marketing management that is traditionally informal and unstructured in SMEs has restricted their ability to effectively make use of LPs (Hutchinson et al., 2015). However, by becoming a partner of a CMLP, SMEs can also reap relevant benefits such as improved customer acquisition and customer loyalty (Rese et al., 2013). Considering the interest of companies such as Amazon, which recently launched a self-service rewards program-Amazon Moments-targeting SMEs with CMLP-like features, the significance of the evolving nature of LPs becomes evident (Amazon, 2019). Evidence from industry reports also envisages an increased interest in LPs. For instance, Forrester Research predicts that marketers will reemphasize the value of their loyalty programs and promote full-fledged loyalty programs in 2021, which is expected to lead to a 30% increase in spending on loyalty and retention marketing (Forrester Research, 2020). CMLPs also provide convenience to customers, as different LP management systems offered by hundreds of LP providers lead to confusion and difficulties when using LPs and redeeming rewards (Wong & Kim, 2019).