2. Personalize with purpose. No two members are alike, and programs that recognize and reward individuality could up the value they’re providing through tailored benefits. Key differentiators could include investing in AI-driven, dynamically personalized journeys while transparently safeguarding data privacy.
Personalization has become a critical differentiator for loyalty programs, especially among younger generations. For example, 89% of Gen Z and 87% of millennials surveyed are willing to share personal information for more tailored offers or experiences, compared to 78% of Gen X and 64% of baby boomers. Similarly, 62% of Gen Z and 64% of millennials say they would opt into hyper-personalized loyalty settings to access better perks and rewards, versus 55% of Gen X and only 33% of boomers. The impact on spend is equally pronounced: More than half of Gen Z (51%) and millennials (53%) say they would spend more at that brand if it offered a personalized experience, while just 38% of Gen X and 19% of boomers say the same.9 These patterns underscore that unlocking the next wave of loyalty lies in making personalization not just available, but meaningful, especially for younger consumers who expect it as the norm.
3. Strengthen engagement with next-generation digital tools. The digital components of loyalty programs are key to strengthening engagement across the omnichannel landscape and can help value-seeking consumers more easily access what they want. In a marketplace crowded with competing programs, next-generation tools make it easier for members to access rewards, recognize savings opportunities, and connect and interact socially.
Younger consumers show an especially strong preference for digital enablement. More than 90% of Gen Z and millennial respondents found at least one tech-enabled feature useful, compared with 73% of baby boomers. Their interest is especially pronounced in features like payment integration; instant notifications; and personalized offers, recommendations, and experiences (figure 4). This widening gap suggests that retailers should adapt their digital investments to meet the expectations of emerging customer cohorts while ensuring accessibility for all members. These insights point to a clear opportunity to use digital features to elevate loyalty experiences, improve consistency and remove friction across channels, and simplify value discovery.
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