Retail loyalty programmes gain ground as connected shopping falters

Almost one in three British shoppers wants to collect loyalty rewards through a retailer’s app while shopping in store, according to research commissioned by Sherwen Studios. Its survey of 2,000 UK consumers found that 31% identified app-based loyalty rewards or offers as a desirable feature during store visits. The findings highlight the value shoppers place on savings and recognisable benefits across digital and physical retail channels.

The figures form part of Sherwen’s wider The Omnichannel Illusion research into the gap between retailers’ connected systems and consumers’ experiences. Only 11% of people in the study saw their online and in-store shopping as a single connected journey. By contrast, specific loyalty incentives produced stronger responses, with 32% saying exclusive in-store offers would make them more likely to visit or buy and 29% citing better loyalty rewards.

Exclusive in-store offers would make 32% of respondents more likely to visit or purchase in a shop, while 29% identified better loyalty rewards as an incentive. These are stated intentions, not observed changes in store visits or sales. The commercial opportunity depends on how consumers respond when an offer is actually available, how much it costs to fund and whether it produces purchases that would not otherwise have occurred.

Sherwen found 35% of consumers would welcome personalised loyalty rewards. Respondents were more cautious about personalisation in other parts of the shopping experience, suggesting that the return offered for sharing information matters. Loyalty provides a visible exchange: a customer supplies purchase history or other details and receives a discount, points or a benefit they can understand. That does not remove privacy obligations or imply that every consumer wants extensive data collection.

The research also highlights expectations of practical integration. Just over one quarter, 26%, said instant loyalty updates across channels should be a standard retail feature, while 20% wanted the ability to place loyalty cards in a digital wallet. Such functions can reduce friction when customers switch devices or enter a physical shop, but the operating systems behind them must reliably update balances, recognise eligibility and prevent duplicate or missing rewards.

Customer expectations differed by demographic group. Personalised rewards appealed to 38% of surveyed women compared with 32% of men, while preferences for stronger in-store rewards were reported by 32% of women and 26% of men. Sherwen also found that younger shoppers expressed greater interest in mobile-led convenience, while older respondents tended to prioritise straightforward benefits. Subgroup results should be interpreted with their sample sizes in mind and do not define the preferences of every person in those groups.

The practical challenge for a retailer is that a customer sees one brand, even if the business operates several separate technology systems. Stock, pricing, deliveries, returns and loyalty may be managed by different teams or suppliers. A points balance that appears in an app but fails at a checkout can undermine confidence more quickly than a sophisticated marketing message can restore it. Staff then spend time correcting records and explaining restrictions.

Commercial analysis should distinguish loyalty membership from genuinely incremental purchasing. A programme can attract millions of members while providing discounts to shoppers who would have bought the same goods at full price. To judge performance, retailers need to compare retention, basket value, redemption costs and customer behaviour with appropriate benchmarks. An increase in the number of app downloads is not by itself proof of stronger margins.

Loyalty programmes also create data governance obligations. Purchase histories can reveal sensitive patterns, and combining them with location, preferences or third-party data requires clear purposes and appropriate permissions. Consumers need to understand what information is used and how they can control it. Retailers that cannot reconcile their customer records accurately risk using personalisation to amplify errors rather than make shopping easier.

Among the survey respondents, 35% welcomed personalised loyalty rewards, while 26% expected instant updates to loyalty balances across channels and 20% wanted loyalty cards available in digital wallets. The differences show how a consistent account and convenient rewards can link stores with online shopping. For retailers, the commercial considerations include the cost of discounts, customers’ redemption behaviour and the accuracy of the information shared between channels.