dunnhumby: customer expectations outpace retail loyalty programme evolution

Loyalty remains a strategic priority for retailers, but traditional approaches are no longer enough. That’s according to the findings of ‘How to Keep Hold of Your Customers’, a new study from dunnhumby.

Drawing on insights from senior retail leaders across Europe and North America, in-depth interviews with Ashwin Prasad (Tesco UK CEO), Bryan Roberts (IGD) and Marek Świderski (Synerise), as well as insights from thousands of grocery shoppers, the report points to an industry in flux.

As shoppers demand relevance and recognition, retailers are rethinking the very foundations of loyalty, what it means today, and how their programmes must evolve to meet expectations in the years ahead. 

Some of the study’s key findings include:

• Customer retention remains the top concern. For many retailers, price sensitivity and limited insight into “less loyal” shoppers are seen as some of the biggest issues.

• Traditional approaches are losing effectiveness. Faced with the prospect of budget cuts, retailers would cut generic rebates and coupons, choosing to protect their personalisation efforts instead.

• Shoppers agree that loyalty needs to evolve. Basic discounts are no longer enough. Today’s shoppers are looking for exclusive offers and rewards that match their own needs and values. Relevance is non-negotiable.

• Effective loyalty programmes drive business performance. Retailers that excel enjoy a deeper emotional connection with customers, see stronger commercial performance, and tend to boast a higher CAGR than their competitors.

• Retailers are looking beyond grocery for inspiration. Beauty and lifestyle brands are commonly cited as innovation inspirations.

As well as exploring current approaches to loyalty, ‘How to Keep Hold of Your Customers’ also identifies three future focal points for retailers. From tackling the threat of loyalty programme homogenisation to developing the capabilities required for meaningful personalisation, the study contains a wealth of advice for those looking to position themselves effectively for the next phase of loyalty and personalisation.

Ben Snowman, Global Head of Loyalty and Personalisation, dunnhumby, says: “Loyalty isn’t broken, but it does need to change. Shoppers now expect more than ever in terms of relevance and personalisation, and that requires retailers to ask some difficult questions about their own approach. As technology makes it easier for retailers to deliver true 1:1 personalisation, they’ll need to work smarter than ever to stand out.”

The report includes perspectives on loyalty and personalisation from a range of industry names, including Tesco’s Prasad, who says: “Loyalty is about all the little things, every single day, every interaction and showing customers that we’re listening, we care, and we’re reliable. At Tesco we bring loyalty back to what really matters: serving customers better. Loyalty and personalisation aren’t abstract - they’re about earning respect by being useful, relevant, and fair.”

2025 RTIH INNOVATION AWARDS

Loyalty and personalisation will be a key focus area at the 2025 RTIH Innovation Awards.

The awards, which are now open for entries, celebrate global tech innovation in a fast moving omnichannel world.

Our 2024 hall of fame entrants were revealed during an event which took place at RIBA’s 66 Portland Place HQ in Central London on 21st November, and consisted of a drinks reception, three course meal, and awards ceremony presided over by comedian Lucy Porter.

In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “The event is now into its sixth year and what a journey it has been. The awards started life as an online only affair during the Covid outbreak, before launching as a small scale in real life event and growing year on year to the point where we’re now selling out this fine, historic venue.”

He added: “Congratulations to all of our finalists. Many submissions did not make it through to the final stage, and getting to this point is no mean feat. Checkout-free stores, automated supply chains, immersive experiences, on-demand delivery, next generation loyalty offerings, inclusive retail, green technology. We’ve got all the cool stuff covered this evening.”

“But just importantly we’ve got lots of great examples of companies taking innovative tech and making it usable in everyday operations - resulting in more efficiency and profitability in all areas.”

Congratulations to our 2024 winners, and a big thank you to our sponsors, judging panel, the legend that is Lucy Porter, and all those who attended November's gathering. 

For further information on the 2025 RTIH Innovation Awards, please fill in the below form and we will get back to you asap.