What: Traditional loyalty programs are losing effectiveness as consumers, particularly younger generations, demand more personalised, digitally integrated experiences that go beyond points and cashback rewards.

Why it is important: With more than 35% of loyalty program members planning to cancel some memberships in the next year, retailers must urgently transform their programs to remain competitive in an increasingly saturated market.

The retail loyalty landscape is experiencing a significant transformation as consumer expectations evolve beyond traditional points-based systems. The average US consumer now belongs to more than 15 programs, representing a 10% increase from 2022, yet engagement levels are declining. This trend is particularly pronounced among younger consumers, with over 50% of those aged 18-34 planning to cancel some memberships in the coming year. Success in this new environment requires a multi-faceted approach combining personalised benefits, digital integration, and experiential rewards. Leading retailers are responding by incorporating gamification elements, mobile-first experiences, and exclusive content, while also leveraging technology to deliver more personalised interactions. This evolution reflects a broader shift from transactional relationships to experience-driven engagement.

IADS Notes: Loyalty programs are evolving beyond traditional point systems in 2024. While 48% of brands now offer experiential rewards , the generational divide is stark - 60% of millennials pay for loyalty subscriptions versus one-third of baby boomers . Digital integration has become crucial, evidenced by Siam Piwat's 102% membership growth after launching their mobile platform. Success requires combining these elements effectively, as shown by Ulta Beauty driving 96% of sales through their program . Mobile-first experiences and gamification are now essential components of modern loyalty strategies.

Loyalty programs are growing—so are customer expectations