Key Summary
- Shoppers now demand personalised, value-driven loyalty programmes over generic discounts.
- Retailers are prioritising emotional connection, relevance, and 1:1 personalisation.
- Tesco’s Ashwin Prasad says loyalty is earned daily through usefulness, relevance, and trust.
Loyalty needs to evolve as basic discounts are no longer enough and today’s shoppers are looking for exclusive offers and rewards that match their own needs and values, a recent report has stated.
According to a new global study released today by dunnhumby titled "How to Keep Hold of Your Customers", traditional approaches are losing effectiveness. Faced with the prospect of budget cuts, retailers would cut generic rebates and coupons, choosing to protect their personalisation efforts instead.
Drawing on insights from senior retail leaders across Europe and North America, in-depth interviews with Ashwin Prasad (Tesco UK CEO), Bryan Roberts (IGD) and Marek Świderski (Synerise), as well as insights from thousands of grocery shoppers, the report points to an industry in flux.
As shoppers demand relevance and recognition, retailers are rethinking the very foundations of loyalty, what it means today, and how their programmes must evolve to meet expectations in the years ahead.
Customer retention remains the top concern. For many retailers, price sensitivity and limited insight into “less loyal” shoppers are seen as some of the biggest issues, states the report.
Effective loyalty programmes drive business performance, states the report, adding that retailers that excel enjoy a deeper emotional connection with customers, see stronger commercial performance, and tend to boast a higher CAGR than their competitors.
Retailers are looking beyond grocery for inspiration. Beauty and lifestyle brands are commonly cited as innovation inspirations.
As well as exploring current approaches to loyalty, ‘How to Keep Hold of Your Customers’ also identifies three future focal points for retailers.
From tackling the threat of loyalty programme homogenisation to developing the capabilities required for meaningful personalisation, the study contains a wealth of advice for those looking to position themselves effectively for the next phase of loyalty and personalisation.
Ben Snowman, global head of loyalty and personalisation, dunnhumby, says, “Loyalty isn’t broken, but it does need to change.
"Shoppers now expect more than ever in terms of relevance and personalisation, and that requires retailers to ask some difficult questions about their own approach.
"As technology makes it easier for retailers to deliver true 1:1 personalisation, they’ll need to work smarter than ever to stand out.”
The report includes perspectives on loyalty and personalisation from a range of industry names, including Ashwin Prasad, UK CEO, Tesco, who says, “Loyalty is about all the little things, every single day, every interaction and showing customers that we’re listening, we care, and we’re reliable.
"At Tesco we bring loyalty back to what really matters: serving customers better. Loyalty and personalisation aren’t abstract — they’re about earning respect by being useful, relevant, and fair.”
Retailers can download the report today to benchmark their loyalty strategy and access practical guidance: dunnhumby.com/resources/reports/loyalty-personalisation/en/customer-loyalty-personalisation-strategies/