For decades, loyalty programs have been the go-to tactic for retailers seeking to build customer stickiness. But despite record levels of enrolment, it is becoming significantly harder for retailers to generate engagement from customers amongst a sea of competing programs.
In Australia, there are thousands of loyalty programs competing for customer attention. In fact, the average Australian consumer belongs to 14 different programs. The concern for retailers is that participation and engagement is far lower, with consumers on being active in 4 of those programs.
The root cause? Too much fragmentation, and too much friction.
Fragmentation Fatigue
Consumers are overwhelmed. With every supermarket, pharmacy, café, airline and app offering their own loyalty scheme, customers are expected to juggle a cluttered portfolio of plastic cards, apps, emails, and reward rules. It’s no surprise that 75% of consumers report difficulty tracking their rewards across programs. The result? Many simply opt out, leaving points unclaimed, offers unused, and brand affinity stagnant.
From a retailer’s perspective, this fragmentation dilutes brand loyalty. Instead of deepening the relationship with their best customers, brands are shouting into the same noisy space as everyone else, competing on generic incentives that rarely drive true behavioural change. If you’re not striving to change customers behaviour, ultimately any discounting is only going to impact your profit margins.
Friction at Every Turn
The challenge isn’t just volume - it’s friction. Customers are still being asked to:
- Scan loyalty cards or provide personal information at checkout
- Log in to outdated portals
- Manually activate offers that are not personalised or relevant to them
This creates unnecessary barriers in moments that should feel seamless. In fact, 43% of shoppers abandon loyalty programs altogether due to frustration with access or usability.
In a time when convenience is currency, these small moments of friction create a lasting impression - and not a positive one.
The Rise of AI-Commerce: A New Loyalty Mandate
At the same time, a new wave of technology is transforming the way customers shop with AI-powered commerce, where successful retailers won’t just track spending, they’ll anticipate needs.
But where to start? Well, the first thing is that you need to know who your customer is. Most retailers are sitting on a goldmine of first-party data, but few are making the most of it.
The future belongs to retailers who can activate that data intelligently, transforming receipts, purchase patterns and browsing behaviour into predictive insights that surprise and delight customers.
This is why loyalty should no longer be a blunt instrument used to handout discounts. It must become a strategic engine for delivering real-time, relevant and personalised value.
The Future Is Personal
The loyalty programs of tomorrow will not be defined by the number of points a customer can accumulate, they will be defined by how well a retailer understands that customer.
To thrive in this new era, retailers need:
- First-party data at the individual SKU (not just basket) level
- The ability to connect SKU-level data to specific customer profiles
- An AI-powered engine that can predict behaviours and recommend personalised offers in real time
It’s no longer just about giving away rewards - it’s about earning loyalty through relevance.
Imagine a program that knows you’re switching to a plant-based diet and offers discounts on oat milk, or one that recognises your weekly Friday wine run and nudges you toward a new varietal you’re likely to love. That’s Loyalty 2.0 - not just transactional, but transformative.
Resetting the Standard
At Slyp, we believe this reset isn’t just necessary, it’s inevitable.
Retailers who move fast will gain a significant competitive edge: higher engagement, greater retention, and deeper customer relationships that are built on insight, not assumption.
Our Slyp Loyalty Platform enables exactly that - connecting the SKU with the WHO to unlock hyper-personalised loyalty journeys across every channel, including in-store. And with our newly launched card linking solution, Auto Earn, we’ve made it even easier for customers to engage with no scanning, no app juggling, just automatic rewards with every shop.
The rules of loyalty have changed.
Are you ready to reset?