Customer Loyalty

How loyalty evolved to a cost-saving proposition from an expression of retailer affinity

In customers’ minds, loyalty no longer means exclusivity to one brand or retailer.
Elizabeth Christenson
Editor, Retail Leader
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What this means: Loyalty and value are often at odds in the retail value equation for consumers, meaning loyalty is typically driven by a desire or affinity for a product rather than price or savings. Consumers today are increasingly focused on value as a means to combat price increases and continue to fuel their lifestyles, which is combined with more choices than ever at retail. To drive loyalty today, products have to be unique or provide so much value to a consumer that they can’t live without it.

employing accepting a loyalty card

The definition of loyalty in most shoppers’ minds has shifted away from exclusivity, according to  new research from 84.51°. Consumers define loyalty to brands and retailers that they shop “most often” at 27% and 29%, respectively. Conversely, only 5% of shoppers define brand loyalty as a brand that they “only ever buy,” and 6% of shoppers define retailer loyalty as shopping at only one retailer for all their grocery and household needs.

“In customers’ minds, loyalty no longer means that they are exclusive to one brand or retailer,” Becky Eldredge, vice president, commercial loyalty at 84.51° told Retail Leader Pro

Two external forces triggered the need for customers to consider alternative brands, she explained. The first was the pandemic, which forced consumers to consider alternative brands and items due to availability. This also includes consumers who shop at a variety of retailers to fulfill their needs.

The second is the impact continued inflation has had on consumers and their need to find alternative brands and items to meet their changing budgets. In 84.51°’s April Consumer Digest report, 33% of shoppers said they can cover their monthly expenses but have little left over, 27% are living paycheck to paycheck and 11% can’t cover monthly expenses. 

“Customers are either cutting back on essential purchases or finding alternative brands to buy,” Eldredge said. “Specifically, 51% of households have switched to a lower cost brand indicating the need for customers to make different choices.”

Tim Mason, CEO of Eagle Eye, told Retail Leader Pro he didn’t entirely believe loyalty in most shoppers’ minds had shifted from retailer and brand exclusivity. 

“Many shoppers continue to have emotional connections to specific businesses, however, as many consumers continue to face rising prices, the reasons driving their emotional loyalty is arguably becoming more transactional,” he said. “As a result, consumers are thinking more about the tangible value that loyalty programs deliver, favoring those which offer instant value as opposed to more traditional ‘buy now save later’ schemes.” 

Loyalty vs. inflation

Brand and retailer loyalty have been roiled in an inflationary environment. Even brand loyal shoppers are not immune to price hikes, and consumers have been very concerned about the inflation during the past year. At its highest peak in June 2022, 73% of customers were extremely concerned about inflation, and during that time 90% of shoppers changed their shopping behaviors, 84.51° reported. Specifically, half of customers said they switched to a lower-cost brand more often to offset the impact of rising prices, 84.51° reported. While customer concern has decreased from its peak in June of last year, 65% of consumers remain extremely concerned about inflation.


“What this means is that both brands and retailers are at risk for customers shifting their purchases to other brands or shopping at other retailers,” Eldredge said.

For brands, positioning products as a good value for the money ranked the highest among the most important differentiators in considering what brands to buy at 62%, 84.51° reported. In addition, building trust between the brand with the consumer was second-most important at 34%. For choosing retailers, 32% of respondents looked for strong sales and promotions as the leading factor of where to shop, while 25% said that high-quality fresh foods determined their shopping choice. Good selection, a valuable rewards program and product availability are also important drivers that influence where customers decide to shop, according to 84.51°.

“As pandemic concerns have faded for many, they’ve been replaced by inflationary prices on groceries, gas, other essentials and fears of broader economic disruption,”  Eldredge said. “Families are pulled in many different directions. Retailers and brands that find ways to be on the same team as their customers have an opportunity to win hearts and minds. Understanding what is most important to high-value customers in informing where they shop is step one in building that loyalty for customers.”

According to survey data captured in a recent Eagle Eye’s report, 30% of global consumers have joined a new loyalty program to save money, and 69% of North American consumers cited “value” as being the top benefit they want from a loyalty program. 

“These findings indicate a shift toward loyalty as a cost-saving proposition instead of an expression of brand affinity,” Mason said. “But it’s important to remember that the latter still exists and by continuing to meet customers’ needs, personalizing their experiences and rewarding the behavior you seek, you will likely achieve it both now and into the future.” 

Eagle Eye’s research indicated that loyalty program participation has risen in response to higher prices. Survey data shows that the second-ranked method (57%) for saving money identified by global consumers was using loyalty points, discounts or savings to reduce the cost of their typical grocery trip. That, coupled with 30% of consumers who joined a new loyalty program explicitly to save money, contributes to the fact that 70% of retailers expect membership in their programs to continue growing through the year. 

“Even if conventional wisdom suggests that brand and store loyalty would become more tenuous amid rising price sensitivity, we believe there is opportunity for retailers to build sustained relationships with their customers through well-executed loyalty strategies that highlight value, personalization and relevant engagement,” Mason said. 

Sales and promotions vs. loyalty

In 84.51°’s research, the top five shopping drivers are:

  • good sales and promotions.
  • quality in fresh foods.
  • variety in assortment. 
  • a valuable rewards program.
  • confidence that products will be in-stock. 

In addition to these factors, the role of personalization has been a strategic choice in driving relevancy to customers at Kroger. Specifically, 59% of customers were likely to purchase a certain brand or shop at a retailer if they receive personalized content, 84.51°reported.


“As a result, personalization can drive incrementality to brands and the relevancy can drive incrementality to retailers with increased trips to their store,” Elredge said.

Undoubtedly, sales and promotions play an important role with customers. Not only did it rank as 84.51° 's top reason for informing customers where to shop, but 70% of customers sought more sales, deals and coupons in 84.51°’s April research with customers. While this is a high proportion of consumers, this is slightly down from a peak of 74% in February. 

In addition, 84.51° also saw a 92% increase in digital coupon page views on, validating the growing importance of savings for customers. 

“As customers continue to navigate the uncertain economic environment, this will likely continue to be a key lever that customers look for in where they shop,” Elredge said. “Over time, it will be important to evaluate customer behavior based on attributes such as price sensitivity, among others, to further understand the ever-changing customer response to economic conditions as there will likely be behavioral differences within different customer segments.” 

Mason also expects sales and promotions to continue to be critical tools for brands and retailers. Eagle Eye’s survey found that 73% of North American consumers said that value is the most important factor to them when choosing a brand, and another 62% said discounts. Additionally, 62% of Canadians and 51% of Americans use coupons more frequently than they did in 2021. 

“Value is top-of-mind and offers and promotions are the most visible manifestation of value for shoppers,” Mason said. “But price is rarely a shopper’s only consideration, and quality, convenience and overall experience continue to factor into overall loyalty. Where these coincide with value is in the personalization of offers through the loyalty program – delivering tailored promotions to individual shoppers based on preferences and past behavior that they’ll find relevant, welcome and easy to redeem. Brands and retailers that can leverage their loyalty platforms to achieve this level of personalization will be best positioned to generate customer loyalty through the current inflationary period and beyond.” 

Eagle Eye expects the current trend toward transactional loyalty to subside as rising prices recede, and instead a renewed emphasis on the brand and store experience will occur along with one-to-one interactions between the customer and the brand or retailer. 

“However, we do expect shoppers to reward those brands and retailers that delivered value when they most needed it with increased loyalty in the future,” Mason said.  

As consumers continue to become more omnichannel shoppers —  increasing their digital engagement and shopping multiple modalities — they will find it easier to shop multiple retailers and switch between brands with the click of a few buttons. 


“While economic pressures may ease, customers’ wants, needs and preferences will continue to change,” Elredge said. “That coupled with the ease of shopping at multiple retailers will continue to challenge customer loyalty. Companies should focus on how they are connecting with their customers to stand out and win in the marketplace. This includes infusing personalization to deliver relevancy and drive loyalty, engaging with shoppers at key moments with their brands and throughout their path to purchase, highlighting key qualities that build trust and drive value, and identifying key characteristics that can bring brands and retailers together to meet specific customer needs”.

Additionally, it’s more important than ever for brands and retailers to use insights from first-party data to reach customers throughout the entire path to purchase. Retail media solutions can close the loop and measure sales results of campaigns that have been customized for specific audience, and leveraging loyalty programs like Best Customer Communications to engage with customers can protect existing loyalty while building loyalty among new customers that have engaged with your brand, Elredge  explained.

Customers also think of loyalty programs as primarily a means to save, so retailers need to continue to bring meaningful value to members to keep them engaged. 

“Leading programs have known for a long time that value is personal and contextual,” Elredge said. “Loyalty programs that take a personalized approach and offer members choice and  flexibility will remain relevant regardless of the macroeconomic situation.”

Retailers that invested in making their loyalty programs useful, valuable and responsive to customer demands will enjoy stickiness among shoppers that initially joined their programs for savings. 

“Loyalty programs that support advanced personalization initiatives and gamified features that encourage high levels of shopper interaction and can reach their customers in the moment will have an advantage,” Mason said. “And consumers that enjoyed those kinds of experiences from their loyalty programs will expect that same level of engagement going forward.”

What’s next: For brands and retailers, driving loyalty in the next 12 to 18 months will depend on the value consumers can derive from purchases. Discounts for repeat purchases or loyalty to a brand often align with loyalty program offers, but may help to move the needle for shoppers in the short term.