Data driven loyalty
One of the major reasons loyalty schemes are extremely popular is that they benefit both consumers and retailers.
Loyalty programmes remain strategically critical as they benefit both customers and retailers. Customers gain more personalised experiences, while retailers unlock rich behavioural data on preferences, purchase cycles and price sensitivity.
Consumers
For consumers, personalisation improves dramatically. With the data collected through loyalty and subscription programmes, retailers can deliver:
- Tailored recommendations
- Targeted promotions
- More relevant product suggestions
- Improved customer service
Retailers
For retailers, loyalty programmes generate rich data, enabling brands to build deep understanding of:
- Customers’ purchase cycles
- Preferences and emerging needs
- Lifestyle patterns
- Responsiveness to promotions
- Price sensitivity
We’re also now seeing retailers integrating AI powered tools into their loyalty systems, such as:
- Personalised shopping lists
- Smart carts that recommend complements or replacements
AI driven replenishment suggestions - Automated deal matching
- Tailored rewards based on behaviour
These tools enhance convenience and ease of decision making, reinforcing routine behaviours, and making the brand feel indispensable.
AI and loyalty
AI is also reshaping the emotional side of loyalty. Rather than just reward points, customers value:
- Smooth, intuitive experiences
- Curated choices
- Reduced friction
- Moments of surprise and delight
Experience is therefore becoming the new loyalty currency, and we’re seeing brands offer tiered access, members only events, curated drops, personalised content, and premium features all to create an emotional connection that traditional points systems cannot match.
Regulatory considerations
However, with greater data collection comes greater responsibility. Retailers must ensure that loyalty and subscription models comply with UK GDPR, including:
- Transparent data usage
- Secure data storage
- Minimised data processing
- Choosing the right lawful basis for processing loyalty data, including consents
- Mitigation of data based risk
- Responsible use of AI in decisioning
This is essential not only for legal compliance but for maintaining consumer trust. For guidance on implementing loyalty and subscription models safely, get in touch with Luke Dixon, Head of Data. Also click here top jump to review current Data Protection legal updates for 2026.
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