Calling for a Revolution in Loyalty
Despite rapid innovation across industries, loyalty programs largely remain outdated, failing to deliver meaningful customer engagement or redemption success.
Over the last decade, technology has revolutionized operations in industries from logistics to finance, unlocking new efficiencies and value for both businesses and consumers. Yet, this wave of innovation has largely bypassed the loyalty ecosystem. Many retailers continue to rely on legacy platforms and outdated infrastructure, combined with a rigid mindset that resists transformation.
To remain competitive, it is no longer enough to simply maintain a loyalty program that just serves as a warm body. Retailers must reimagine their approach, both strategically and technologically.
Failures of the Current Loyalty Model
Loyalty programs still operate on the same foundational principles as they did 20 years ago: reward accumulation, point redemption, and periodic engagement. While these mechanics may have worked in the past, they now feel stale, disconnected, and inefficient in today’s hyper-personalized digital economy.
Despite the theoretical win-win model – offering value to both brands and consumers – most programs today fail to drive meaningful engagement or maximize redemption.
Missed Opportunities in the Red Ocean
From a brand’s perspective, low redemption rates signal lost chances to re-engage and reinforce customer loyalty. Points left unredeemed represent not only wasted budget but also failed brand touchpoints. Retailers should be making it easy, even fun and exciting, for customers to spend their rewards.
Instead, many programs are trapped in a “red ocean” of loyalty sameness. Consumers are bombarded with nearly identical offerings from different brands, making it nearly impossible to differentiate between programs. This oversaturation fosters opportunistic behaviour. Consumers jump from deal to deal rather than connecting to long-term brand relationships.
The Consumer’s POV
Consumer Expectations of Loyalty
In 2024, loyalty programs are expected to do more than reward – they’re seen as financial tools, personalization engines, and seamless digital experiences.
Life is expensive, and many households are navigating economic uncertainty. When budgets are tight, loyalty rewards can make a genuine difference. According to recent research by LoyaltyLion, 64% of UK consumers actively use loyalty programs to save on everyday purchases, reflecting the growing reliance on rewards to supplement spending during the cost-of-living crisis.
Even for members who aren’t financially constrained, there’s intrinsic value in getting something for free. The emotional reward – the thrill of a successful redemption – enhances the customer experience and reinforces engagement. In theory, loyalty programs have the perfect formula with perceived value, recurring touchpoints, and a psychological payoff.
The Gap Between Expectations and Reality
Yet meeting consumer expectations isn’t simple. Modern consumers have evolved through enjoying perfect, immediate, and omnivorous purchasing – and their expectations are higher than ever.
Today’s loyalty members expect ease of use, seamless digital access, and autonomy in how they redeem rewards. They want control, which means the ability to use their points on products and services that align with their lifestyle, not just within narrow brand ecosystems.
They also demand personalization. Offers and promotions should reflect real preferences, past behaviour, and purchasing habits. No one wants generic blasts. Redemption must be straightforward, accessible, and contextually relevant.
And right now, most programs fall short of all this.
The Brand’s POV
Brand Expectations of Loyalty
For brands, loyalty programs serve as a strategic tool to increase purchase frequency, basket size, and long-term customer value. And yet, proper execution remains a major barrier.
The driving force behind most brands’ investment in loyalty programs is clear – sustained customer engagement. Whether it’s encouraging more frequent purchases, larger basket sizes, higher customer satisfaction, or brand advocacy, loyalty programs are designed to keep customers coming back. And given the well-established fact that acquiring a new customer costs significantly more than retaining an existing one, loyalty becomes a cost-efficient growth lever.
Why Loyalty Delivers
Loyalty programs deliver value to brands because they encourage repeat purchases by incentivizing customers to accumulate and redeem points. This creates a natural loop. The more customers buy, the more value they unlock. This is a structure that directly influences both short-term revenue and long-term customer lifetime value (CLV).
Beyond behaviour reinforcement, loyalty platforms give retailers access to rich first-party data such as purchase history, buying frequency, preferred categories, and even engagement signals. This enables personalized marketing, micro-targeting, and data-driven business decisions. Many brands are now forming cross-brand partnerships, allowing customers to redeem points with third-party retailers – enhancing redemption flexibility and increasing program attractiveness.
Lagging Execution
However, most brands don’t specialize in loyalty technology. And because loyalty is not the core of the business, they often struggle with seamless integration and implementation. Without an easy-to-deploy, frictionless solution, even the most well-intentioned loyalty strategy can fall short.
Breathing New Life into Loyalty: The CoinBridge Paradigm
Bridging loyalty and payments is not just innovative – it’s actually effective, too, and increases engagement. When loyalty points can be spent like cash, consumers engage more frequently and more meaningfully. In fact:
- Consumers spend 15% more on average when they use Pay with Loyalty.
- 80% of shoppers want product recommendations based on past purchases, signalling strong interest in data-powered personalization.
Spending loyalty points like cash means no more browsing through limited catalogues or waiting for eligible offers which drives impulse and planned purchases. When customers receive personalized offers, rewards become more relevant creating value with emotional connections. These behaviours prove that when redemption is flexible and integrated into everyday payment journeys, customers are more likely to participate, spend, and stay loyal.
What Blocks the Bridge
Despite the proven benefits, adoption remains slow for several reasons.
Technology Gaps
Most existing loyalty tech is focused on earning and tracking points, not spending them. Redeeming points has been treated as a back-end problem, not a front-line opportunity. Even when modern solutions exist, they’re often invisible to retailers or seen as too complex to integrate.
Risk-Averse Mindsets
Many retailers are still shaped by legacy thinking. Even those interested in innovation tend to prefer incremental improvements over transformative change. New tech often triggers internal pushback, not because it lacks potential, but because it challenges entrenched systems and workflows.
Operational & Financial Bureaucracy
Even when a retailer wants to modernize, red tape can slow the momentum with:
- Financial compliance, like licensing, KYC, and regulatory requirements
- Merchant operations including settlements, reconciliations, and partner onboarding
Retail isn’t always aligned with financial services infrastructure. Tesco’s recent exit from retail banking is a move that underscores the strain of combining retail operations with financial regulation.
A Solution Revolution: Turning Loyalty into Spendable Currency
Breathing new life into the loyalty industry, the CoinBridge solution doesn’t just improve efficiencies within the current model – it fundamentally redefines it. By bridging the gap between loyalty and payments, CoinBridge turns loyalty assets into real, spendable money. Customers can access their points directly from loyalty apps via e-wallets and redeem them anywhere in the world over standard credit card rails. No QR codes, no voucher codes, just tap and pay.
This directly addresses consumer expectations. At a time when financial flexibility matters more than ever, CoinBridge offers customers real purchasing power, wherever they choose to shop. Instead of navigating limited in-app catalogues or endless offer pages, users can simply redeem their points anywhere – online or in-store – with the same ease as using a credit card. It’s loyalty redemption with zero friction and full freedom of choice.
For brands, CoinBridge breaks the mould. It increases member engagement by enabling redemption at more relevant touchpoints and unlocks new, out-of-brand customer data, which can be used for micro-targeting and personalized marketing strategies. More importantly, it eliminates the traditional roadblocks that come with expanding loyalty ecosystems, so there’s no need for new POS integrations, merchant contracts, or complex partnerships. CoinBridge handles the entire stack – regulatory licensing, transaction handling, merchant settlement, and technology infrastructure.
Brands simply integrate a lightweight SDK into their existing mobile app, and the result is instant – a loyalty proposition that now supports infinite redemption opportunities, globally. CoinBridge’s patented technology makes this possible, offering a seamless experience from implementation to payment execution. And with a significant portion of U.S. consumers indicating they would use loyalty assets to pay if this functionality existed, the market has clearly been waiting for a solution like this.
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