Product

Monday, 2 March 2026

Loyalty in Your Customer's Hand. Why the Best Programs Stopped Counting Points

 

I met the founders of Sweet Tooth way back in 2012 at the first Big Dam Run in Vegas. You know them now as Smile.io, but back then they were Sweet Tooth Rewards, a scrappy loyalty app built on Magento. Imagine a bunch of Canadians coming to the Nevada desert in the winter to run a half marathon. If that isn't loyalty, I don't know what is.

That was over a decade ago. Smile.io was just getting started, and loyalty in eCommerce meant punch cards and "buy 10 get 1 free" coupons. Simple. Transactional. Easy to understand.

Fast forward to 2026 and the loyalty landscape looks nothing like it did at that starting line in Vegas.

More Programs, Less Loyalty

The global loyalty management market is worth over $8.6 billion and projected to exceed $18.2 billion by the end of this year (MarketsandMarkets, 2022). Loyalty program enrollment is at all-time highs. Every brand, from the corner coffee shop to the Fortune 500, has some kind of rewards program.

And yet true loyalty, the deep trust-based connection between a customer and a brand, fell to 29% in 2025. Down from 31% the year before (SAP Emarsys Customer Loyalty Index, 2025).

More money on loyalty. More signups. Less actual loyalty.

Something is broken.

The problem isn't that loyalty programs don't work. The data says they do. 90% of loyalty program owners report positive ROI, with average returns of 4.8x (Antavo Global Customer Loyalty Report, 2024). Members who redeem rewards spend 3.1x more than those who don't (Antavo, 2024). A 5% increase in retention can drive a 25-95% increase in profit (Bain & Company).

The problem is that most programs are still built for 2012. Points for purchases. Generic discounts. One-size-fits-all tiers. The same playbook everyone else is running.

When every brand offers the same loyalty experience, none of them feel special. That's loyalty fatigue. And it's real.

The Old Model Is Table Stakes

Let me be blunt. If your loyalty program is still just "spend money, earn points, get a discount," you're not running a loyalty program. You're running a rebate system.

Customers expect that now. It's table stakes. It's the minimum. And the minimum doesn't create emotional connection.

Think about your own behavior. How many loyalty programs are you a member of right now? Ten? Twenty? How many of them actually change your purchasing decisions? Probably two or three at most.

The ones that matter to you are the ones that go beyond the transaction. The ones that make you feel like you belong to something. The ones that know you.

Nearly 7 in 10 consumers modify how much they spend to maximize loyalty benefits (Bond Brand Loyalty). But only when the program gives them a reason to care.

What the Best Programs Look Like Now

The platforms driving loyalty in 2026 look fundamentally different from what we had a decade ago.

AI-driven personalization is no longer optional. 51.4% of loyalty programs now use AI, up from 37.1% just a year ago (Antavo GCLR, 2025/2026). And these aren't gimmicky chatbots. We're talking about propensity modeling that calculates the precise likelihood of specific customer actions in real time. "Customer A is 85% likely to churn in the next 30 days." That kind of precision.

The shift is from grouping customers by demographics to understanding them as individuals. Their behavior, context, location, even the weather.

Mobile wallets are becoming loyalty hubs. Starbucks proved this with over 34 million active rewards members on their wallet-based app (Starbucks Investor Relations, 2026). Now platforms like Rivo are bringing Apple Wallet and Google Wallet loyalty card integration to Shopify brands. Your loyalty card lives right next to your credit card. No app to download. No login to remember.

Experiential rewards are overtaking discounts. What's more memorable, a $5 discount or an exclusive workshop with the brand's founder? Nike runs "Member Days" and exclusive product drops tied to engagement history. Sephora built an entire online beauty community around their Beauty Insider program. One global fashion retailer reported a 33% boost in high-tier retention by rewarding customers for attending runway livestreams, sharing outfits on Instagram, and completing sustainability pledges (Kognitiv/Antavo).

Zero-party data is the new currency. With third-party cookies dying and privacy regulations tightening, loyalty programs have become one of the most effective tools for collecting data customers willingly share. 90.7% of loyalty program owners now use loyalty data in pricing and promotions (Antavo GCLR, 2026). But the smart ones are going further, feeding that data into merchandising, product development, and customer service.

The Platform Landscape in 2026

If you're evaluating loyalty platforms right now, the market has matured significantly.

Smile.io is still the easiest on-ramp. Over 100,000 businesses use it (Smile.io). You can launch a template-based program in under an hour. Points, referrals, VIP tiers. Free plan for up to 200 monthly orders. Those Canadians who ran a half marathon in the desert built something that lowers the barrier for everyone.

If you're all-in on Shopify, look at Rivo. Built exclusively for Shopify and Shopify Plus, serving 9,000+ brands including HexClad Cookware Ridge, and Dr. Squatch (Rivo). Their claim to fame is performance. Theme app extensions that load under 100ms. HexClad generated $450,000 in referral revenue in their first 90 days, a 92x ROI (Rivo case study). They're 100% bootstrapped, zero VC, which tells you something about the business model.

Yotpo's play is bundling. Reviews, UGC, SMS marketing, and loyalty in a single platform. A customer gets points for uploading a photo review, and that photo feeds into your site gallery. That cross-module connection is hard to replicate with standalone tools.

LoyaltyLion takes the opposite approach. 100% focused on loyalty. No reviews, no SMS, just a deep, data-driven loyalty engine. They support Shopify, BigCommerce and Adobe Commerce which makes them versatile across platforms.

At the enterprise level, Antavo AI Loyalty Cloud and Open Loyalty are worth evaluating. Antavo's "Timi AI" brings agentic AI to loyalty management. No-code builders for earning logic, tiers, reward catalogs, and campaign workflows. Omnichannel support including in-store, loyalty kiosks, and physical card solutions. Multi-country, multi-currency, multi-brand coalition programs. Their client list includes KFC, SKIMS, and Benefit Cosmetics. Open Loyalty takes an API-first approach and publishes the widely-cited annual Loyalty Program Trends report.

For Magento and Adobe Commerce merchants specifically, your options have expanded. Antavo, LoyaltyLion, Zinrelo, Open Loyalty, and bLoyal all support Adobe Commerce. Zinrelo is worth a look for B2B loyalty with predictive churn modeling and AI-driven segmentation. They also integrate with VTEX, Salesforce Commerce Cloud, and Oracle Netsuite.

A note on the broader market. G2's 2026 rankings for loyalty management software include Salesforce Marketing Cloud, SAP Emarsys, Impact.com, LoyaltyLion, Smile.io, Kangaroo Rewards, and BON Loyalty among their top-rated platforms. Some of the names on G2's list (Xoxoday, AdvantageClub.ai, Snappy) are more focused on employee recognition than eCommerce loyalty, so know what you're looking at when you browse those lists. BON Loyalty is worth a look if you want a user-friendly interface with strong rewards customization. Kangaroo Rewards brings solid omnichannel capabilities. And SAP Emarsys offers advanced data-driven marketing tied to loyalty, which makes sense if you're already in the SAP ecosystem.

Before you compare feature lists, ask one question: does it talk to Klaviyo? Does it talk to your POS? If your loyalty platform can't see what your email platform sees, you're going to spend the next year duct-taping data together. I've watched brands do this. It's painful.

Loyalty as an Engagement Hub

The best loyalty programs in 2026 aren't just rewarding purchases. They're rewarding engagement.

Writing reviews. Sharing on social media. Referring friends. Completing challenges. Attending events. Volunteering. Living the brand's values.

This isn't a nice-to-have anymore. Emotionally connected customers demonstrate 306% higher lifetime value (Motista, 2018). Read that number again. Three hundred and six percent.

The gamification market is expected to reach $48.72 billion by 2029 (Mordor Intelligence), and the reason is simple. Tiers, challenges, and status levels drive behavior. When customers see a path to a higher level, they engage more.

But the brands doing this best aren't just gamifying for the sake of it. They're building community. They're creating belonging. They're making their loyalty program the front door to a relationship, not just a transaction tracker.

71% of British adults expect loyalty programs to promote sustainable causes (Mando-Connect/YouGov). Brands like Costa Coffee, Madewell, and REI are embedding sustainability rewards. Points for using reusable cups. Credit for recycling old products. Recognition for choosing lower-impact shipping.

KEEN Corps. The Example Worth Studying

This brings me to KEEN, the outdoor footwear brand out of Portland. In September 2021, they launched KEEN Corps, described as the world's first volunteerism-based loyalty program (KEEN/Points of Light). The name was inspired by the Civilian Conservation Corps of the 1930s.

In KEEN Corps, volunteering one hour earns you 25 points. Donating one dollar earns you 25 points. Spending ten dollars earns you 25 points.

They made community impact equal to revenue. The math actually works that way.

Their tier names tell you everything about the brand's personality. KEEN. KEENer. KEENest. The top tier gets you onto an exclusive product tester team. Not just discounts. Access.

The early results were strong. Within two months of launch, 11,000+ members with 5% weekly growth. Over 6,600 volunteer hours logged. $75,000 in KEEN Effect grants pledged to nonprofits (KEEN/Points of Light, 2021). 100% of donated dollars go to organizations making the outdoors and trades more accessible.

KEEN is a family-owned, values-led brand. They're not giving points for purchases and calling it a day. They're using their loyalty program as a community organizing tool. And their customers are showing up. Literally showing up. To volunteer.

That's not a rebate system. That's loyalty.

What This Means for Your Brand

If you don't have a loyalty program yet, just pick one and launch it this week. Seriously. A Smile.io free plan takes 45 minutes to set up. You'll learn more from running a basic program for 90 days than from six months of evaluating platforms.

If you already have a program, ask yourself when you last logged in and looked at the data. Most brands set up their loyalty program and forget about it. The points accumulate, the discounts go out, and nobody is paying attention to what customers are actually doing with the program.

The brands winning at loyalty right now are the ones treating their program like a product, not a feature. They're A/B testing reward structures. They're feeding loyalty data into merchandising decisions. They're asking customers what they want and then building it.

And they're thinking about what they actually stand for. KEEN rewards volunteering because they genuinely care about the outdoors. That's not a marketing play. That's who they are. Your customers can tell the difference.

The hard part is not the technology. Every platform I listed above can do the technical work. The hard part is deciding what your brand actually stands for, and then building a program around that instead of copying what everyone else is doing.

Join Us at eTail

I'm at eTail™ Palm Springs this week, and the timing of this article is intentional. Today at 2:40 PM PST, Sam Buckingham from KEEN is doing a fireside chat on Track 1. "Loyalty in the Palm of Their Hand: Maximizing Engagement Through Apps, Cards, and Beyond." He's going to dig into building loyalty triggers at different points of the customer journey and allowing customers to access programs in different ways.

If you're here at the conference, come join us. If you're not, I'll share the key takeaways in a future post.

The brands that figure out loyalty in this next era won't be the ones with the biggest points multipliers. They'll be the ones that give their customers something worth being loyal to.

Disclaimer: I'm not endorsing any specific loyalty platform mentioned in this article. I have no financial relationship with any of them. This is simply a look at where the loyalty space is heading and the platforms I'm seeing in the market.

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