Retailers Are Selling Your Loyalty for a Pretty Penny, and It’s All Thanks to AI
**The loyalty dividend**: The average customer has around 12 loyalty cards in their wallet.
Loyalty programs were once just a way to thank customers for their repeat business. Now, they’ve become a lucrative source of first-party data for retailers, making them a prized asset for companies with artificial intelligence (AI) ambitions.
Traditionally, loyalty programs were about rewarding customers with points, discounts, or perks in exchange for their repeat business. But as third-party tracking methods have become less reliable – think Google’s impending changes to its ad ID, for instance – retailers are turning to their own customer data to fuel their marketing efforts.
That’s where loyalty programs come in. By analyzing purchase histories, preferences, and engagement signals, retailers can create highly detailed profiles of their customers. These profiles are incredibly valuable, allowing companies to tailor their marketing strategies to individual shoppers and boost sales in the process.
The data from loyalty programs is also more trustworthy than that from third-party sources, which are often plagued by inaccuracies and inconsistencies. As a result, retailers are increasingly relying on loyalty data to inform their marketing decisions, using it to identify high-value customers, anticipate demand, and optimize their advertising spend.
**What this means**: Retailers are getting better at using loyalty data to target customers with tailored marketing messages, which means consumers may see more personalized ads and offers in their feeds. If you’re part of a loyalty program, you can expect more relevant promotions and communications from your favorite retailers – even if you’re not actively shopping from them.
