Younger shoppers are almost three times more likely than older consumers to stop shopping with a retailer because of its loyalty programme, despite feeling more loyal overall, according to new research from HyperFinity.
The company’s Retail Loyalty Index Pulse report, produced with Bloomreach and Eagle Eye, found that 28% of under-35s have stopped shopping with a retailer because of its loyalty scheme, compared with 10% of over-65s.
Despite this, 61% of younger shoppers said they feel more loyal to retailers than they did three years ago, highlighting the growing expectations consumers have of loyalty programmes.
Thomas Hill, Co-founder of HyperFinity, said: “Younger shoppers may feel more loyal to retailers, but that loyalty cannot be taken for granted. A scheme that offers generic rewards or fails to deliver on its promises can quickly undermine that relationship.”
The findings also highlight the growing role of AI in retail personalisation. While 69% of respondents said they were comfortable with AI being used to deliver more relevant deals, just 4.4% identified AI-powered recommendations as a retail trend they most wanted to see.
Hill added: “Personalisation is becoming an expectation rather than a reward in itself. Customers aren’t concerned about the technology behind an offer; they want offers that are relevant, useful and worth acting on.”
Last month, HyperFinity reported it was working with JD Sports on its personalisation strategy, with trials finding that personalised offers performed better than simply increasing the value of customer incentives.
Value remains a key factor in customer retention. Some 44% of shoppers said they would stay loyal to a retailer during a period of rising household costs if the rewards offered were worthwhile. However, the report found that lower-income households were more likely to prioritise switching to cheaper retailers, highlighting the importance of delivering meaningful benefits through loyalty programmes.
