Amid changing consumer preferences, income polarisation and an evolving loyalty landscape, 2024 is expected to drive transformative new loyalty trends, which will dominate and redefine the status quo. Loyalty programmes are set to embrace more customer-centric strategies with hyper-personalised and experiential reward structures to help retain and generate value. Businesses will leverage even more innovative technologies to support a seamless customer journey and integrate their loyalty programmes into the everyday activities of their customers. 

Leverage hyper-personalisation

Customisation of reward offers through real-time engagements, AI, predictive analytics and customer profiling increases the relevance of loyalty programmes and the conversion rates. It is an essential strategy to help align with consumer preferences, purchasing habits and their future needs.

48% of consumers in 2023 want products which are uniquely tailored to them

^{Source: Euromonitor Voice of the Consumer: Lifestyles Survey, 2023}

The expectations of consumers are that loyalty programmes must adapt and integrate novel technologies to create unique and exclusive experiences and encourage omnichannel engagement with the loyalty programme.

Collecting real-time behavioural data such as browsing interests, consumer sentiments or purchasing patterns can facilitate customisation of reward offerings. Predictive analytics is therefore instrumental for customer retention. It can help refine business strategies and optimise retention tactics and facilitate categorisation of the customer base and enhance customer experiences. Ultimately, it can allow a loyalty programme to become more flexible by tracking real-time performance.

Amid these evolving transformations, loyalty programmes will be an important tool for operators to obtain customer data. They need to be opt-in and entirely permission-based schemes to comply with privacy regulations. At the same time, they can offer a simplified and straightforward way to collect and handle consumer insights data. 

With online retail sales growth slowing down from its peak during the COVID-19 period and with 6% retail e-commerce growth for 2023, the channel is reaching maturity levels, which will require a more online-savvy approach to be adopted by global brands by offering a broader range of tailored options across online purchases.

Build emotional loyalty to elevate reward proposition

Creating an effective and valuable loyalty programme is centred around the rising importance of emotional loyalty, which embraces experiential rewards, uses gamification tactics or supports causes of importance to loyalty members, eg charities, local communities, sustainable actions. For many consumers, these are perceived as higher-value rewards vis-à-vis transactional perks.

Millennials top the leaderboard as the consumer segment which strongly favours experiences. They account for 79% of respondents in the Euromonitor Voice of the Consumer: Lifestyles Survey in 2023, closely followed by Baby Boomers with 78% preferring unique and enticing experiences.

Despite the prevailing economic uncertainty and soaring inflation, pent-up demand for travel, personalised services and exclusivity shape the evolving loyalty reward structures. From exclusive events, cooking classes with a celebrity chef or live shows or concerts, consumers demand more unique and enticing benefits across all channels.

Online experiences are highlighted as important for 56% of Millennials in 2023

^{Source: Euromonitor Voice of the Consumer: Lifestyles Survey, 2023}  

Aspire to create a loyalty ecosystem

Loyalty ecosystems are seen as a portal for increased customer engagement, as they offer multiple services as part of their proposition, and combine automation, AI, rewards, experiences, gamification and digital assets. They are seen as the platform to prevent “loyalty fatigue”, expand cross-selling opportunities and offer built-in payment gateways, which help deliver hyper-personalised rewards and benefits. 

Many businesses fail to deliver a unified shopper experience across all channels, which can lead to value trade-off and significant gaps in customer engagement. As a result, the loyalty offer should provide opportunities for members to gain rewards beyond their purchases, which can include activities such as social media reviews, product feedback, completing actions, referrals etc, as well as redeem these across all platforms on which the business is active alongside diversified partner rewards. Ultimately, loyalty ecosystems can facilitate engagement with members, interoperability and relevance of the reward offering.

With the inroad of AI, blockchain and Web 3.0 within the loyalty space, decentralised loyalty ecosystems are expected to be the next step in the evolution of loyalty business models.​ Decentralised technology solutions which use blockchain pave the creation of a safer environment for members and brand advocates. They can nurture more engage-to-earn activities as part of the brand community through innovative means.

The use of Web 3.0 technologies can allow loyalty members to take a step further and have greater ownership of their rewards, and improve their decision-making on how, where and what they redeem as part of the loyalty ecosystem. For businesses, these innovative platforms can nurture new partnerships, improve their bottom lines and reinforce effectiveness. Embracing extensive digital transformation, therefore, can help improve customer retention and boost acquisition of new members.

Read our report, The Transformation of Customer Loyalty: A Pan-Industry View, for more analysis on the key trends adopted across different global industries, or Next-Generation Customer Loyalty for in-depth trend descriptions, case studies and strategic recommendations.