In today’s crowded retail landscape, loyalty and rewards programs have become essential tools for nurturing deeper customer relationships and establishing loyalty. These programs—similar to a well-tended garden—require consistency, care, and attention to thrive. But what truly makes a rewards program flourish over time?
According to new research from Bread Financial, one in three loyalty members—across all age groups—say they tend to shop more often at a retailer when enrolled in that brand’s loyalty program. That’s a powerful signal that loyalty programs, whether or retailer-branded credit card-based, remain a vital lever for driving shopper engagement and increasing share of wallet.
Loyalty Programs Are Everywhere—But That’s Part of the Challenge
With so many loyalty programs available today, consumers are often juggling several at once:
- 1 in 3 shoppers is enrolled in at least 3 different programs
- 1 in 5 shoppers finds it hard to keep track of them all
The Challege: This fragmentation creates a key challenge for brands: not just offering a rewards program, but ensuring it stands out and provides clear, consistent value.
The Solution: To rise above the noise, brands must focus on building programs that are rooted in essentials, nurtured regularly, and responsive to changing consumer needs.
The Loyalty Essentials: Growing your garden of customers
1. Discounts and Points Still Reign:
Just as gardens need water and sunlight, loyalty programs need their own set of fundamentals to grow—namely, discounts and points. These have stood the test of time as the most valued features in retailer-branded credit card programs.
In Q1 2025, the top perks reported by cardmembers included:
- Discounts at checkout (35%)
- Extra points per dollar (31%)
Notably, these features were consistently appreciated across generations—from Gen Z to baby boomers. This cross-generational appeal reinforces the importance of getting the basics right before experimenting with new program elements.
2. Flexibility Is the Fertilizer
Beyond the essentials, program flexibility—particularly around reward expiration—is becoming increasingly important. A significant 47% of respondents said they wanted rewards that never expire, and another 21% supported the idea of extensions to the rewards redemption period in general.
While older shoppers have a preference for rewards that never expire, Gen Z shows more openness to flexibility, with 25% expressing interest in longer redemption timelines.
Retailers that offer greater flexibility in this area could not only remove a key point of friction in the loyalty and rewards experience but also increase engagement and long-term retention.
3. Give your shoppers what they want
Gen Z Wants Options—And They’re the Future. While foundational elements like discounts and points remain popular, younger shoppers are already shaping the future of loyalty programs through their preferences. Gen Z is particularly interested in versatile reward redemption options that go beyond traditional models.
Among Gen Z retailer-branded cardmembers, some of the most appealing new reward features include:
- Redeeming rewards at affiliated “sister” brands (32%)
- Converting rewards into investments like stocks or mutual funds (31%)
- Applying rewards toward rent or mortgage payments (29%)
- Redeeming rewards in cryptocurrency or NFTs (25%)
These insights point to a growing expectation among younger consumers for rewards that integrate seamlessly into their lifestyle and financial goals. For retailers looking to build loyalty with this generation, offering personalization and adaptability is not just a nice-to-have—it’s becoming a competitive necessity.
Three Ways to Grow a Stronger Loyalty Program
Bread Financial’s study outlines three key takeaways for retailers and brands that want their loyalty programs to thrive:
1. Stand Out from the Crowd
With a garden full of competing loyalty programs, brands must find ways to spotlight what makes their programs unique. Whether it’s exclusive perks, brand storytelling, or ease of use, differentiating your program is essential to gaining mindshare and wallet share.
2. Listen to Your Loyal Customers
Creating a feedback loop with your loyalty members can surface critical insights about what’s working, what isn’t, and what shoppers wish they had. This can help identify pain points early—like rewards that expire too quickly—and guide your team to smarter program updates.
3. Keep Looking Forward
A successful loyalty program is never “done.” Continual evaluation and evolution ensure the experience stays relevant as customer preferences shift. This is especially important as Gen Z’s influence continues to grow.
Final Thoughts
In a landscape where shoppers are bombarded with offers and incentives, loyalty programs that feel fresh, personal, and genuinely rewarding will be the ones that thrive. As Bread Financial’s research shows, the key to long-term growth is rooted in a balance of trusted fundamentals, strategic flexibility, and a forward-looking mindset.
Retailers who treat their programs like living ecosystems—constantly adapting, measuring, and evolving—will be best positioned to cultivate lasting loyalty, across generations.
Learn how Bread Financial can help you activate smarter customer experiences.
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