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 launched 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 Artificial Intelligence behavioral modeling technology), as well as feedback gathered from thousands of supermarket consumers, the study reveals a sector in full transformation. With consumers demanding relevance and recognition, retailers are rethinking the 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 top concern. For many retailers, price sensitivity and the lack of data on ‘less loyal’ consumers emerge as some of the key challenges.
- Traditional approaches are losing effectiveness. Faced with the possibility of budget cuts, retailers would prioritize preserving investments in personalization, choosing to reduce generic discounts and coupons.
- Consumers agree that loyalty needs to evolve. Basic discounts are no longer sufficient. Today’s consumer wants 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, deliver better business outcomes, and tend to exhibit higher compound annual growth rates (CAGR) than their competitors.
- Retailers seek inspiration beyond the food sector. Beauty and lifestyle brands are often 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 shape the future for retailers. From the challenge of avoiding the homogenization of loyalty programs to developing the necessary capabilities to achieve significant personalization, the study brings together various recommendations for those looking to compete effectively 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 themselves tough questions about their own strategies. As technology makes delivering truly 1:1 personalization easier, retailers will need to work even smarter to stand out.”
The report also provides insights from various industry leaders, such as Ashwin Prasad, CEO of Tesco in the UK, who emphasizes:
“Loyalty is about all the little things, every day, in every interaction, showing customers that we are listening, that we care, and that we are reliable. 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]
