Given that over 19 loyalty programs have a presence in Canadians’ wallets, which represents significant growth in recent years, companies cannot afford to shelve their programs. To be regularly used by its members, a good loyalty program needs to evolve and find a way to distinguish itself in the marketplace.

To achieve this, here are a few loyalty trends to consider for 2025:

1. Continuous evolution
2. Artificial intelligence (AI) and predictive analytics
3. Hyper-personalization or microtargeting
4. Premium program
5. Mobile-first approach
6. Gamification
7. Sustainable development
8. Strategic partnerships

1. Continuous evolution

A static loyalty program is a sign of failure. More and more loyalty programs regularly implement changes, whether in terms of:

• a new visual (rebranding);
• added benefits;
• added features;
• improvements to the mobile experience; or
• the addition of a premium tier (see trend 4).

Companies like Target, Sephora, Loblaws (PC Optimum), and Mondou have recently effected this type of exercise.

Sometimes it’s even a matter of undertaking a revamp or redesign. This therefore involves more fundamental changes to the underlying generosity of rewards (i.e., the points system) or reward levels.

2. Artificial intelligence (AI) and predictive analytics

A trend on everyone’s lips these days, artificial intelligence (AI) plays a key role in managing and optimizing loyalty programs. It can help you to:

• analyze vast customer data sets (purchases, interactions, and preferences);
• personalize offers, especially in real time, as well as rewards;
• predict the customers who are likely to disengage or leave (churn); and
• improve user experience and automate interactions (chatbots).

At Amazon, AI personalizes recommendations and improves the engagement of Prime members. In the Starbucks Rewards program, AI designs hyper-personalized offers that are sent via the mobile application. In today’s airline and hotel sectors, AI helps build customized experiences, such as automatic upgrades.

In every scenario employing artificial intelligence, there is an essential condition for its use: data quality. Ensure that your data are clean, well structured, and ready to be employed by AI.

Read: Data, the beating heart of relationship marketing

AI can significantly improve loyalty programs by making them more dynamic, personalized, and effective, all while reducing costs and increasing customer satisfaction. Taking small steps towards implementation is recommended for a smooth, unproblematic evolution that gets the most out of AI.

3. Hyper-personalization 

The personalization trend isn’t new in the loyalty field. However, these days we’re talking more about hyper-personalization or microtargeting.

The best programs take advantage of AI as well as behavioural and transactional data analysis to personalize rewards, offers, content, and even experiences. This improves the relevancy of communication initiatives and, as a result, the engagement of members. Personalization allows programs to create added value and generate an emotional connection.

Through microtargeting, programs can use several segmentation approaches in order to identify groups of customers, increasingly small and specific, that have similar needs or interests.

• Price-sensitive customers: based on the ratio of items purchased on special
• Members whose purchase frequency has diminished
• Consumers likely to stop frequenting the business
• The best customers, who are all too often forgotten by program managers

This precise segmentation then allows programs to offer the right content, offers, or rewards.

4. Premium program

Also referred to as fee-based membership, a premium program charges monthly or annual membership fees to members so that they can access additional, exclusive services and benefits. PC Express Pass (Loblaw Companies), Panera Bread Unlimited Sip Club, Uber One, Indigo Plum+, and Triangle Select (Canadian Tire) are a few examples.

When well planned, this type of loyalty program is highly profitable. Its higher profitability is explained notably by the fact that:

• it is an additional source of recurring revenue (fees paid by members); and
• it produces behavioural changes in its members.

Indeed, when we compare members of the basic (free) tier to those in the same program who joined the premium tier, results¹ show that the latter increased their purchase concentration and visits to the brand by 25%. In addition, the overall performance of the program increased by 22%.

5. Mobile-first approach

The loyalty sector is not immune to the growing trend of smartphone use. According to the latest LoyalT study,¹ presented by adviso in collaboration with Ad hoc Research, 42% of Canadians prefer to use a digital loyalty card integrated into their smartphone.

Given the current context in which the vast majority of brands would like to rejuvenate their clientele, the mobile experience is becoming key to the performance and adoption of a loyalty program. A poor mobile experience means that many young (and not-so-young) customers will quickly become uninterested in your program.

It’s no longer enough to show the number of points earned, but to integrate useful features that will:

• allow members to save time;
• make their lives easier; and
• bring added value to the program.

The LoyalT 2024 Study also investigated the user experience (UX) of loyalty programs. As a complement to its LoyalT score, each program received a score for its mobile experience, based on an independent analysis of 25 variables performed by digital experts from the firm nventive, a leader in digital experience development. The analysis revealed that loyalty programs offering a superior mobile experience demonstrated higher performance and engagement than those whose mobile experience was deemed to be of lower quality.

Even if a member’s experience begins at a store’s checkout, it mostly continues on mobile. A seamless omnichannel experience remains a key factor for success that will impact the level of engagement, use, and customer satisfaction.

6. Gamification

Gamification activities in loyalty programs are a great strategy for increasing the engagement of customers and inciting them to adopt desired behaviours. Not only do these games incite members to interact with the program, but they also collect data that could be used to personalize offers and content.

Gamification can take various forms:

• Mechanics and visuals: progress bars or badges
• Promotional games: instant prizes, quiz game, survey, etc.

These activities are becoming increasingly popular amongst Canadians, especially young people, of whom one-third state they participate “very often” or “often” in such games.

7. Sustainable development

A new trend in loyalty, sustainable development is a central priority for many loyalty programs. Environmental and social initiatives appeal to consumers with ethical concerns, especially many of those in generations Y and Z. This alignment of programs with the values of its members enables greater loyalty to the brand.

In concrete terms, certain programs allow members to exchange their points for eco-friendly products or donate their points to environmental causes. Here are a few examples:

• In Australia, Sephora partnered with recycling firm Terracycle to reward members who return their cosmetic product containers to the store
• Loyalty program Costa Club lets customer collect extra points if they bring a reusable cup
• Members of the Explore+ program have access to privileges if they use reSAIL, an online sales platform for used or second-hand products

8. Strategic partnerships

One of the main trends in loyalty that emerged last year is an increase in strategic partnerships. Companies have become aware of the importance of collaborating to improve their loyalty offers and provide added value to customers.

By partnering with other brands, loyalty programs can offer a wider range of rewards as well as exclusive additional benefits. This collaboration not only increases the attractiveness of programs, but also offers customers flexibility and the possibility of earning and redeeming their rewards.

For example, the partnership between Delta Air Lines, Aeroplan, and Starbucks allows members to earn points with each brand. All members obtain “miles” on Starbucks purchases and “stars” on flights. This collaboration also offers exclusive advantages, such as early access to new products and services.

In 2025, such collaborations should continue apace, with even more multi-brand and coalition programs on the horizon.

Conclusion

Technologies and customer needs are evolving, which is why your program must also evolve. In 2025, companies that understand how to innovate, add novelty with new elements, and adapt to new expectations from members will maximize not just their engagement, but also the long-term value of their programs.

Would you like to know which trends your loyalty program should follow? Contact our team of experts to discuss it further!

Reference

¹  LoyalT 2024 Study by adviso: Data collection via web panel conducted by Ad hoc Research from May 22 to June 5, 2024, amongst 10,002 Canadians aged 18 and over who were members of at least one loyalty program.