Loyalty remains a strategic priority for retailers, but traditional approaches are no longer sufficient. This is what the results of "The Art of Loyalty" indicate, a new global study released today by dunnhumby, a world leader in customer data science and artificial intelligence.
Based oninsightsExecutives from retail in Europe and North America, in-depth interviews with Ashwin Prasad (CEO of Tesco, the largest grocery retailer in the UK), Bryan Roberts (IGD), and Marek Świderski (Synerise, a Polish Big Data company that offers behavioral modeling technology through Artificial Intelligence), 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 main conclusions of the study include:
- Customer retention remains the biggest 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 needs to evolve.Basic discounts are no longer enough. Today's consumer wants exclusive offers and rewards aligned with their needs and values. Relevance is non-negotiable.
- Effective loyalty programs boost business performance.Retailers who stand out in this aspect establish deeper emotional connections with customers, achieve better commercial results, and tend to exhibit a higher compound annual growth rate (CAGR) than their competitors.
- Retailers seek inspiration beyond the food sector.Beauty brands andlifestyleThey are frequently cited as references in innovation.
Three strategic priorities for retailers
In addition to exploring current loyalty practices, the report "The Art of Loyalty" identifies three key areas that should guide the future of retailers. From the challenge of avoiding the homogenization of loyalty programs to the development of the necessary capabilities to achieve meaningful personalization, the study gathers various recommendations for those who wish 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 difficult questions about their own strategies. As technology makes it easier to deliver truly 1:1 personalization, retailers will need to work even smarter to stand out.
The report also includes the perspectives of various industry leaders, such as Ashwin Prasad, CEO of Tesco in the United Kingdom, who highlights:
Loyalty is about all the small things, every day, in every interaction, showing customers that we are listening, that we care, and that we are 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 helpful, relevant, and fair.”
Retailers can now download the report to assess their loyalty strategy and access practical guidance: [download page]
