Younger shoppers more likely to ditch poor loyalty schemes

HyperFinity has published research suggesting younger shoppers are more likely than older consumers to stop buying from a retailer because of its loyalty scheme. The findings are based on a survey of 2,000 UK consumers.

Among under-35s, 28% said they had stopped shopping with a retailer because of its loyalty programme, compared with 10% of over-65s. At the same time, 61% of under-35s said they felt more loyal to retailers than they did three years ago.

The figures suggest a gap between overall consumer sentiment and the performance of individual schemes. While younger shoppers reported stronger loyalty overall, they also appeared less willing to tolerate programmes they see as falling short.

The findings come from HyperFinity's Retail Loyalty Index Pulse report, produced with Bloomreach and Eagle Eye. The study surveyed UK consumers who belonged to at least one of the 51 loyalty programmes featured in the Retail Loyalty Index published earlier this year.

Generational divide

The age split was one of the clearest findings. Older consumers were far less likely to say they had abandoned a retailer because of its scheme, suggesting retailers face different expectations across customer groups.

That matters because loyalty programmes have become a common tool for retailers trying to keep customers coming back as competition for discretionary spending remains intense. The research indicates that younger consumers may place greater weight on whether rewards feel useful and relevant.

"Younger shoppers may feel more loyal to retailers, but that loyalty cannot be taken for granted. A scheme that offers generic rewards or fails to deliver on its promises can quickly undermine that relationship. There is no one-size-fits-all approach to loyalty - retailers need to understand what individual customers value and make sure the benefits they offer are relevant, worthwhile and deliverable," said Thomas Hill, Co-founder of HyperFinity.

AI and offers

The report also examined attitudes to personalisation and the use of AI in retail offers. It found 69% of shoppers were comfortable with AI being used to deliver more relevant deals.

However, enthusiasm for the technology itself appeared limited. Only 4.4% of respondents identified AI-powered recommendations as the retail trend they most wanted to see, suggesting shoppers focus more on outcomes than on the systems that produce them.

That distinction could be significant for retailers investing in digital marketing and loyalty tools. Consumers may accept more data-driven targeting, but the research suggests that does not automatically translate into interest in AI as a selling point.

"Personalisation is becoming an expectation rather than a reward in itself. Customers aren't concerned about the technology behind an offer; they want offers that are relevant, useful and worth acting on. AI can help retailers deliver that, but only if it improves the customer experience," said Hill.

Value pressure

The research also pointed to the role of household finances in shaping loyalty. Some 44% of shoppers said they would remain loyal to a retailer through rising household costs if the rewards on offer were worthwhile.

However, lower-income households were more likely to prioritise switching to a cheaper retailer. That suggests loyalty schemes may struggle to offset price sensitivity when consumers are under financial pressure unless the benefits offer clear value.

For retailers, the results underline the challenge of designing programmes that appeal across different age and income groups. Younger shoppers may be more engaged with loyalty in principle, but they also appear readier to walk away if a scheme disappoints. More price-conscious households, meanwhile, may still switch if cheaper options are available elsewhere.

The survey covered consumers enrolled in at least one major UK retail loyalty programme, giving the findings broad market coverage. The results suggest retailers face pressure not only to sign customers up, but to make rewards feel tangible enough to influence where people choose to shop.