This briefing is part of our Digital Transformation Monthly 2022 in Review, which looks back over the trends that defined the past year and considers how they might impact the year to come. In this series we’ll look at the trends that arched across sectors, from finance to pharma, retail to travel, and be examining how businesses of all sizes have responded to these trends.

This section looks at why businesses have increasingly turned to loyalty programmes to make a more competitive offering to consumers in an economically difficult environment, as well as to secure an invaluable source of first-party data. It also examines how the 'loyalty surge' has fuelled a boom in a new type of advertising - retail media - and the advantages it offers for retailers and their client brands.

Over the past three years, a long list of retail, FMCG, beauty, restaurant and other brands have expanded, revamped or adopted loyalty programmes. Many of these have been digital-first loyalty schemes centred around an app (rather than simply a card), giving brands more room to add content, marketing messages, a richer experience, and even elements of gamification.

Some brands with established loyalty programmes found that they were more resilient to the chaos of the initial Covid-19 lockdowns, as they had a direct channel to communicate with customers, send updates and (in the case of multichannel retailers) persuade them to shop online.

With vastly increased online traffic, many brands also recognised the opportunity that they had to collect first-party data using a loyalty scheme, and target customers with more personalised offers. And as the pandemic has worn on, a compelling loyalty programme has increasingly become a way for brands to differentiate themselves, persuading customers to keep shopping with them, and to convince customers that they offer the best value for money at a time when finances are increasingly strained.