Customer loyalty remains a strategic priority for retailers, but traditional approaches are no longer sufficient. This is what the results of ‘The Art of Loyalty,’ a new global study released today by dunnhumby, the world leader in customer data science and artificial intelligence, indicate.
Based on insights from retail executives in Europe and North America, in-depth interviews with Ashwin Prasad (CEO of Tesco, the UK’s largest food retailer), Bryan Roberts (IGD), and Marek Świderski (Synerise, a Polish Big Data company offering AI-powered behavioral modeling technology), as well as insights gathered from thousands of supermarket consumers, the study reveals a sector in full transformation. With consumers demanding relevance and recognition, retailers are rethinking the very foundations of loyalty, its current meaning, and how programs need to evolve to meet expectations in the coming years.
Some of the study’s key findings include:
- Customer retention remains the top concern.For many retailers, price sensitivity and the lack of data on ‘less loyal’ consumers appear as some of the main challenges.
- Traditional approaches are losing effectiveness.Faced with the possibility of budget cuts, retailers would prioritize preserving investments in personalization, opting to reduce generic discounts and coupons.
- Consumers agree that loyalty programs need to evolve.Basic discounts are no longer enough. Today’s consumers want exclusive offers and rewards aligned with their needs and values. Relevance is non-negotiable.
- Effective loyalty programs drive business performance.Retailers that excel in this area build deeper emotional connections with customers, achieve better business results, and tend to show higher compound annual growth (CAGR) than their competitors.
- Retailers seek inspiration beyond the food sector.Beauty and lifestyle brands are often cited as innovation references.
Three strategic priorities for retailers
In addition to exploring current loyalty practices, the ‘The Art of Loyalty’ report identifies three key areas that should guide retailers’ future. From the challenge of avoiding homogenization in loyalty programs to developing the necessary capabilities for meaningful personalization, the study brings together various recommendations for those looking to position themselves competitively in the next phase of loyalty and personalization.
Ben Snowman, Global Director of Loyalty and Personalization at dunnhumby, states:
‘Loyalty is not in crisis, but it needs to evolve. Consumers increasingly expect relevance and personalization, and this requires retailers to ask tough questions about their own strategies. As technology enables truly 1:1 personalization, retailers will need to work even smarter to stand out.’
The report also includes insights from various industry leaders, such as Ashwin Prasad, CEO of Tesco UK, who highlights:
‘Loyalty is about all the small things, every day, in every interaction, showing customers that we’re listening, that we care, and that we’re trustworthy. At Tesco, we bring loyalty back to what really matters: serving our customers better. Loyalty and personalization are not abstract concepts—they mean earning respect by being useful, relevant, and fair.’”
Retailers can now download the report to assess their loyalty strategy and access practical guidance: [download page]
