Retailers don’t spend billions of dollars building loyalty programs because loyalty gives them a warm, fuzzy feeling. Rather, it’s because loyalty has become the de facto operating system of modern retail.
That’s a big claim, and on the surface it sounds almost hyperbolic. After all, most consumers think of loyalty programs as a source of discounts, digital coupons, fuel rewards, and the occasional freebie.
But it’s something else entirely: data. And data – good, quality data – is one of the most valuable assets in the grocery business.
The global loyalty management market is now estimated at more than $5.6 billion and is projected to grow at a double-digit annual rate over the next several years; retailers, restaurants, airlines, and other consumer-facing businesses are investing heavily in customer engagement platforms.
Industry surveys have found that nearly seven in ten brands increased their investment in loyalty programs during the past several years as competition for customer data intensified.
After all, it’s as good as gold… transparent gold.
Loyalty Was the Missing Link
For decades or more, retailers knew what sold… but not necessarily who bought it. It wasn’t difficult to track product movement, category performance, or promotional results. What they almost always lacked was a clear understanding of the individual households making those purchases.
Loyalty programs changed all that. And, although the struggle to sort quality data from rubbish is still ongoing, AI-enabled systems are increasingly turning the tide toward good, solid data.
Every loyalty-card swipe, mobile-app login, clipped digital coupon, pharmacy transaction, and online order filled in another piece of the customer puzzle. Nowadays, many retailers can connect the overwhelming majority of transactions to identifiable households through loyalty accounts and digital engagement platforms.
That information has become so valuable that loyalty programs have moved beyond “another tool in the marketing toolbox” into “vital infrastructure” territory.
A retailer without meaningful first-party customer data is increasingly flying blind.
This helps explain the explosive growth of retail media networks. Retail media has become one of the fastest-growing segments of the advertising industry because retailers possess something traditional media companies often cannot: verified purchase data.
Brands don’t simply know whether a shopper saw an advertisement. In many cases, they can determine whether that shopper actually purchased the product afterward.
The economics are compelling. Walmart’s retail media business generated an estimated $4.8 billion in revenue during 2025, helping demonstrate why retailers across the industry are rushing to build their own advertising platforms. Industry analysts project retail media spending will continue expanding rapidly as brands shift more dollars toward measurable, purchase-based advertising.
Without loyalty data, none of that exists.
Yet advertising may not be the most important application of loyalty data.
Beyond Coupons and Fuel Rewards
As the Supermarket Guru Phil Lempert pointed out here just the other day, healthcare could be.
Phil described loyalty – correctly, I happen to think – as the “front door” of retail health. Reporting from the Nourishing Change conference in Des Moines, Iowa, Lempert observed that retailers increasingly view loyalty platforms as the foundation for broader wellness relationships with consumers.
That represents a profound shift.
Historically, a loyalty card helped shoppers save money on cereal, earn fuel rewards, or receive personalized coupons. Today, retailers are exploring ways to connect loyalty programs with pharmacy services, nutrition guidance, wellness screenings, healthy eating initiatives, and personalized health recommendations.
In other words, loyalty is becoming less about discounts and more about engagement.
The implications extend far beyond healthcare.
Retailers are increasingly competing on personalization. They want to recommend products, tailor promotions, anticipate shopping needs, improve customer retention, and create more relevant shopping experiences.
Not a single one of those goals is even remotely achievable without data – the kind of good data that a comprehensive loyalty program delivers.
It connects grocery purchases to pharmacy visits and digital engagement to in-store behavior. The loyalty program powers retail media campaigns, wellness initiatives, personalized offers, and customer relationship strategies.
What began as a marketing initiative has evolved into a strategic platform that touches nearly every aspect of modern retail. It’s like I said: infrastructure.
That’s why loyalty programs continue attracting investment even during periods of economic uncertainty. Retailers aren’t simply trying to encourage repeat visits. Rather, they’re building customer intelligence, enticing them to identify themselves every time they shop, no matter where.
