Loyalty programmes are becoming one of retail’s most trusted technologies
Loyalty programmes are becoming an increasingly important way for retailers to connect customer data, personalisation and commercial value, according to new consumer research.
Digital consultancy Sherwen Studios works with retail brands including Peacocks, ScS, Booker, Londis, Premier and Budgens. Its latest research report, The Omnichannel Illusion: Customers can’t value what they don’t experience, explains how loyalty programmes have evolved beyond their traditional role as a customer retention tool to become one of the few experiences that naturally connects physical stores, ecommerce and clear customer value.
As part of the report, Sherwen Studios commissioned independent research across a nationally representative sample of 2,000 UK consumers aged 18 and over to better understand consumer shopping habits. The research found that customers increasingly want and expect loyalty programmes to add value to their physical and online shopping experiences. Loyalty is one of the few areas where shoppers are actively willing to share information about themselves because they can clearly see what they receive in return through rewards, savings, and more relevant experiences.
Customers expect loyalty programmes to deliver value for money, and they judge them on how effectively they improve the overall shopping experience.
- 31% of shoppers say that the digital feature they most want when shopping in-store is the ability to collect loyalty rewards or offers via a retailer app.
- 32% of consumers would be more likely to visit or purchase in-store if they had access to exclusive in-store offers, followed by 29% who said better loyalty rewards would make them more likely to shop in-store. This shows retailers a commercial opportunity to use loyalty to encourage store visits and purchases.
- 35% of consumers would welcome personalised loyalty rewards despite cautious attitudes toward personalisation elsewhere in their customer experience.
- Over a quarter (26%) of shoppers believe instant loyalty updates across channels should be a standard retail feature, while 20% want the ability to add loyalty cards to their digital wallet, demonstrating how loyalty expectations increasingly extend across physical and digital shopping experiences.
Collectively, these findings demonstrate how loyalty programmes have become more than a customer retention tool. They allow retailers to strengthen customer relationships, support personalisation, and connect physical and digital shopping experiences in ways customers can clearly understand and value. Rather than sharing data without an obvious benefit, loyalty gives shoppers a clear reason to share information about themselves in return for recognisable value.
Matt Sherwen, Managing Director of Sherwen Studios, says: “Loyalty has traditionally been discussed in terms of customer retention, but our research has identified a much bigger commercial opportunity for retailers. That’s because customers actively look for and want to engage with it. They want offers that give them a reason to visit stores, personalised rewards that matter to them, and loyalty benefits that work across physical and digital channels. Loyalty shouldn’t feel like an add-on at the end of a transaction. Customers increasingly expect it to be built into the shopping experience itself.”
Sherwen Studios’ research also shows that loyalty expectations aren’t universal.
38% of women value personalised rewards compared with 32% of men, while 32% of women prefer better in-store rewards compared with 26% of men. Younger shoppers show greater interest in seamless, digital, personalised loyalty programmes integrated with mobile experiences, while older groups value convenience and clear benefits more.
Matt explains, “A single loyalty programme can serve different audiences, but the offer and experience shouldn’t necessarily look the same for everyone. That is why loyalty has become much more than a retention mechanism. When retailers get it right, it can encourage repeat purchasing, connect multiple shopping channels, support personalisation and give customers a clear and immediate reason to share information about themselves.”
The full report, The Omnichannel Illusion: Customers can’t value what they don’t experience, explores attitudes towards connected retail, delivery, loyalty, personalisation and artificial intelligence. It identifies where shopping journeys still feel separate and explores how retailers can make existing digital capabilities more valuable to customers.
The report can be downloaded from Sherwen Studios’ website.