Customer loyalty trends: are consumers loyal?

Key trends in customer loyalty

40% of consumers switch brands for a cheaper alternative.¹

Across all generations brand loyalty is falling as consumers are willing to consider other options. This is being fuelled by inflation and rising costs-of-living.¹

How businesses are responding

There are many strategies loyalty programs are embracing in 2024 to retain consumers. Some include: 

• hyper-personalisation
• experiential rewards that are unique and/or exclusive ² -22% of digital consumers join loyalty programs to get exclusive experiences, and 34% do so to get access to exclusive rewards. ³
• embracing innovative technologies ² -leveraging augmented reality (AR) and virtual reality (VR), the metaverse, the Internet of Things and livestreaming can help retailers connect with their consumers in new and immersive ways. ³
• integrating loyalty programs into consumers’ everyday activities ² -rather than just rewarding purchases, brands are encouraging consumers to embrace their omnichannel strategy. They’re rewarding consumers across different platforms for activities like referrals, product feedback, and social media reviews ²
• supporting causes consumers are emotionally connected with - these can include local communities, sustainability initiatives and charities ²
• gamification - real-time rewards like QR codes or treasure hunts around a store can create hype and a sense of playfulness with consumers. ³ 

The role of personalisation in retaining customers 

Hyper-personalisation: it’s all about the data 

50% of consumers want goods and services that are uniquely tailored to them. This jumps to almost 70% when it comes to consumers who are the most digitally savvy. This makes sense as this group often shops across multiple platforms where tools like Artificial Intelligence (AI) and Augmented Reality/Virtual Reality (AR/VR) create hyper-personalised and intuitive retail experiences. ⁴

Hyper-personalisation can deepen the emotional connection a consumer has with a brand. But, to build a deeper understanding of an individual consumer, brands need to micro-target. They can do this by leveraging real-time and historical consumer data and tools like AI and predictive analytics. Although we’re talking about individual consumers and/or niche cohorts here, with the help of AI, businesses can hyper-personalise at scale. ¹

Gen Z-ing personalisation

For Gen Z (born 1995 – 2009), they expect personalisation, especially since they see buying goods and services as a form of self-expression. Gen Z want custom, immersive experiences and AR, VR and AI can meet this need. 

Almost one third of Gen Z are interested in virtual shopping with their friends. 
The good news? Virtual shopping is expected to grow by 229%, and virtual shopping with friends is expected to grow by 141% in the next five years. ⁵

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¹ Nine key consumer trends in 2024 - McKinsey

² Loyalty Trends Dominating 2024 - Euromonitor 

³ Unleashing the Power of Play: Gamification Brings the Fun In-Store - Euromonitor

⁴ Retail Reinvention: A Framework for Future Growth - Euromonitor

⁵ Global Gen Z Spending Report - NielsenIQ

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