Loyalty schemes drive data collection as cookies fade in the UK

Brands are seeking new ways to collect meaningful customer data as third-party cookies become less reliable and privacy expectations grow. Loyalty programmes are increasingly seen as an answer, offering a more transparent and rewarding route to first-party data collection in the United Kingdom's evolving digital landscape.

Privacy concerns

The use of cookies by online brands has come under greater scrutiny from consumers. A 2021 UK survey found that 61% of respondents routinely accepted all cookies when browsing, but sentiment is beginning to shift. By early 2023, more than 18% of UK respondents reported rejecting cookies each day. This change signals heightened consumer awareness and action regarding online privacy.

Loyalty as a data tool

Loyalty programmes, historically known for encouraging repeat custom, now serve a dual purpose. These schemes offer incentives such as points and exclusive perks in exchange for customer information, with shoppers voluntarily providing insight into preferences, profile details or shopping habits. This ensures compliance with emerging privacy laws and delivers data quality brands have struggled to attain from cookies alone.

Personalised marketing

The data provided through loyalty initiatives allows companies to segment their customers more effectively and tailor communications. Email, SMS and push messaging can be adapted to reflect reward balances, tier progress and specific engagement history. A customer new to a scheme can be welcomed with incentives, while a long-standing member could receive targeted offers for reaching the top tier.

This approach replaces generic mass messaging campaigns. The expectation of personalisation has become embedded among consumers, who now anticipate recognition of their preferences and engagement history from brands they interact with.

Tangible outcomes

In the beauty sector, The INKEY List has utilised a loyalty programme to provide rewards such as event invitations and early access to products. Top-tier members also gain access to exclusive events, including webinars with co-founders. The company states its loyalty scheme now contributes to 30% of its revenue, with active members demonstrating a lifetime value three times higher than that of non-members.

Evolving strategies

Brands are experimenting beyond standard point-based rewards. Quizzes, preference surveys and tiered incentives serve as entry points, while future initiatives could include gamification, social sharing rewards or AI-powered personalisation based on loyalty insights. These strategies seek to achieve deeper engagement rather than focusing solely on purchasing behaviour.

Balancing data and privacy

With the end of third-party cookies, brands are required to manage the balance between consumer privacy and the drive for personalisation. Loyalty programmes offer a route that consumers increasingly accept, provided the value exchange is clear and beneficial to both parties.

"Data collection doesn't have to be a battle between privacy and personalisation. It's time to reimagine loyalty programmes as both a reward system and a data strategy, and rather than focus on limitations of the post-cookie era, focus on delivering the kind of experiences customers actually want. And that's a win for everyone," said Charlie Casey, Chief Executive and Co-Founder, LoyaltyLion.