The Power of Customer Loyalty in Retail: Top Trends of 2023

August 7, 2023

The world of retail has undergone a significant transformation in the recent decade, and as of 2023, customer loyalty has become the lifeblood of retail businesses.


In today's highly competitive market, acquiring new customers is getting more expensive by the day, and retaining existing ones has become a crucial focus for retailers. According to recent studies, customer loyalty is now a top priority for 73% of businesses, and this trend is expected to grow even further in the years to come. 

Brands that can effectively build a loyal customer base are more likely to succeed. From personalized product recommendations to loyalty programs that will make customers want to shout their favourite brand name from the rooftops (well, not literally), retailers are jumping on every trend to keep customers coming back for more.


Customer loyalty trends are constantly evolving in the world of retail. In this article, we will look at the latest trends that are shaping the retail industry and explore strategies that retailers can employ to build long-term customer loyalty.

72% of global customers feel loyalty toward at least one brand

6 Customer Loyalty Trends to Keep an Eye on in 2023

In 2023, we can expect to see several trends shaping the way retailers approach customer loyalty. Let's take a closer look at some of the most significant trends that can leave a significant impact on the industry:

1. Power of personalization 

Personalization is taking over the retail industry as retailers are creating a more individualized and tailored shopping experience for customers. By leveraging data and technology, retailers are now able to offer highly customized shopping experiences to their customers. 

80% of shoppers are more likely to buy from a company that offers personalized experiences. By analyzing customer behavior and preferences, retailers can offer tailored recommendations, marketing messages, and product offerings that resonate with each shopper.

And it's not just about driving sales. Personalization is also humanizing the shopping experience, creating emotional connections between customers and retailers. This emotional connection is key to building brand loyalty and customer retention in a crowded market.

2. The emergence of phygital experiences

With the rise of e-commerce, traditional brick-and-mortar retailers have been forced to adapt or risk falling behind. But rather than altogether abandoning physical stores, retailers are finding new ways to integrate digital technology and create a seamless phygital (physical + digital) experience for customers. 

For example, Sephora has embraced technology to enhance the in-store shopping experience, offering features such as augmented reality mirrors and interactive touchscreens that allow customers to try on makeup virtually. 

Moreover, mobile apps are also becoming increasingly popular and the technology conveniently enables brands to fit their entire stores in the palms of their customer.

But it's not just about technology, brick-and-mortar stores continue to play a crucial role in driving sales and customer engagement. 

Studies show that 85% of shoppers prefer to touch and feel products before making a purchase. Most retailers offer the Buy Online Pickup In-Store (BOPIS) fulfillment option, and this trend is becoming increasingly popular among consumers. According to Shopify's data, 59% of consumers are interested in BOPIS-type shopping options.

Pro-tip: Using Shop2app’s Store pickup, you can save time and offer convenience to your clients. You can also simplify pickup scheduling using the time and date picker of Shop2App.

3. Data-driven loyalty programs

In recent years, data-driven loyalty programs have become increasingly popular among retailers. These programs use data analytics to gather information about customers' purchasing habits, preferences, and behaviors. 

Retailers can then use this data to personalize rewards, promotions, and communications, which can drive customer engagement, loyalty, and retention. In fact, in Yotpo’s report, over 83% of customers said that belonging to a loyalty program influences their decision to buy again from a brand.

It is expected that these data-driven loyalty programs will have a huge impact on the sales of the retail industry in the years to come. 

Moreover, retailers will likely focus on improving the transparency of their data collection and management practices as well to build trust with customers and ensure the customers’ privacy is maintained. 

4. More retailers are becoming DTC brands

In the current retail landscape, many traditional brick-and-mortar stores are adopting a direct-to-consumer (DTC) approach to reach customers more effectively and efficiently.

By selling directly to customers, brands can gain greater control over the customer experience and develop a more personal relationship with their audience. This can lead to increased trust and loyalty over time.

For example, In 2020, Birkenstock, the well-known sandal and footwear brand, launched its own DTC platform allowing customers to purchase directly from its website. This move was driven to better control the customer experience and collect valuable data to communicate product development and marketing efforts.

Also, DTC brands are like the trendsetters of the retail world. By becoming a DTC player, retailers have the freedom to experiment with new products, exclusive pricing, and product promotions. This way they can keep their customers on their toes and foster a sense of community among them.

5. Retailers are embracing subscriptions

With recession looming on the horizon, retailers today are more invested in retaining their customers and inducing repeat purchases. Subscriptions have become an increasingly popular way to do just that. 

Subscription-based models allow retailers to establish long-term relationships with their customers. By signing up for a subscription, customers commit to regularly purchasing products from the retailer. This commitment helps retailers build a loyal customer base and ensures repeat business. 

Subscriptions also allow retailers to collect valuable customer data based on their buying  habits, which can be used to personalize the customer experience and increase loyalty.

Moreover, selling subscriptions can help retailers win not only the hearts but also the minds of their customers. With subscriptions, retailers have the power to maintain a constant presence in their customers' lives by regularly delivering products to their doorstep. This fosters a consistent and long-lasting relationship between retailers and their customers. 

Learn all about implementing subscriptions and current trends in this blog

6. Modern customers are more conscious 

Consumers are becoming increasingly aware of the impact of their purchasing decisions which is why they are looking for retailers who take an active part in promoting sustainable practices and inclusivity. 88% of customers are more loyal to businesses that support social or environmental issues.

Retail companies that prioritize sustainability or inclusivity are more likely to attract and retain customers who give importance to these values. This could include initiatives such as using eco-friendly packaging, creating cruelty-free products, or simply offering more shades and tones to cater to customers of all skin tones. 

For example, ModCloth, an online clothing retailer, has built its brand around offering a wide range of sizes and styles to cater to customers of all shapes and sizes. Such inclusive product offerings can generate revenue growth of up to 8% above their industry average.

In an era where consumers have more options than ever before, loyalty is no longer guaranteed. Consumers have the power to choose which retailers they support based on their values. Both sustainability and inclusivity are emerging as the key factors in those choices.

Customer Loyalty Matters More Than Ever

The current trends are revolutionizing the way retailers approach customer loyalty. With the power of data analytics, retailers can analyze customer behavior, purchase history, and preferences to tailor their offerings, create personalized experiences, and anticipate customer needs. 

In a nutshell, retailers are analyzing customers’ every move to create a shopping experience that builds customer loyalty. 

Now, that we know what’s expected out of 2023, Why wait to start implementing new strategies? As the saying goes, "don't put off until tomorrow what you can do today". Let's dive right in and start creating a loyalty program for your business.

How to implement a loyalty program in your business?

Loyalty programs play a huge role in building customer loyalty for retailers by offering rewards and incentives to customers who keep coming back for more.

And let's be honest, who doesn't love feeling exclusive and valued? That's exactly what loyalty programs do for customers – they make them feel like they're part of a special club. It's like getting VIP treatment every time you shop.

With a loyalty program in place, retailers can not only keep customers coming back for more but also gain valuable insights into their shopping habits and preferences. And with that kind of knowledge, retailers can create a shopping experience that's tailor-made for each and every customer. Talk about a win-win!

So, if you're a retailer and you're not offering a loyalty program, you're missing out on a huge opportunity to build strong relationships with your customers. 

Without any further ado, let’s get you started. In this part of the blog, we will explain the fundamental steps in detail to implement a successful loyalty program in your business. So, keep your pen and notepad ready. 

Step 1: Determine Your Goals

What do you want to achieve with your loyalty program? Is it to increase repeat purchases, reward your most loyal customers, or attract new customers? Defining your goals will help you develop a loyalty program that is tailored to your business needs and goals.

Step 2: Choose a Type of Loyalty Program

Next, we must understand the types of loyalty programs that you can implement in your business. There are several types of loyalty programs to consider, including point-based programs, tiered programs, cashback programs, and coalition programs. 

Each has its advantage and disadvantage (discussed later), so it's important to choose the type that best fits your business and your customers' preferences.

Types of Loyalty programs

Types of loyalty program

1. Point-Based Programs:

Point-based programs are among the most popular types of loyalty programs. In this, customers earn points for every purchase they make, which they can then redeem for rewards.


  • It encourages repeat purchases and engagement.
  • Rewards can be tailored to specific customer segments.
  • The points can be redeemed for a variety of rewards.


  • It can be complex to manage and track points.
  • Redeeming rewards can be time-consuming for customers.
  • It may not provide enough value to incentivize loyalty.

Gymshark, a fitness apparel brand, offers a loyalty program called "Gymshark Conditioning." Customers earn points for every purchase they make, and can then redeem those points for discounts on future purchases, exclusive offers, and early access to new product releases.

2. Tiered Programs:

Under this, customers are divided into tiers based on their level of spending or engagement, with each tier offering progressively better rewards.


  • Such a program encourages customers to increase spending and loyalty.
  • Rewards loyal customers with exclusive benefits.
  • It also allows the segmentation of customers based on their value.


  • Communication of the benefits of each tier can be difficult.
  • High rewards for higher tiers can be expensive.
  • It can create dissatisfaction among lower-tier customers.

The Sill, a plant delivery company that offers a wide range of indoor plants and accessories, has a tiered loyalty program called "The Sill Society" that allows customers to earn benefits based on their total spending on the site. The program has three tiers - green, silver, and gold.

3. Cashback Programs:

In cashback programs, customers earn cashback or discounts on future purchases based on the amount they spend.


  • Cashbacks provide an immediate benefit to customers.
  • It encourages more spending for more cashback.
  • This can be easily understood and communicated to customers.


  • This may not incentivize long-term loyalty.
  • High cashback rates can be expensive.
  • It may attract price-sensitive customers who aren't loyal.

Rakuten, an online marketplace, offers a cashback program where customers earn a percentage of their purchase amount back as cash. Customers can then redeem that cash for gift cards or a PayPal deposit.

4. Coalition Programs:

Several businesses partner to offer a joint loyalty program, allowing customers to earn and redeem rewards across multiple brands.


  • This provides a wide range of rewards and options.
  • It allows for cross-promotion and partnership opportunities.
  • It can attract customers who may not have been loyal to a single brand.


  • It can be complex to manage multiple partnerships and rewards.
  • This may dilute the brand identity.
  • This may not provide enough value to customers to incentivize loyalty.

Air Miles, a loyalty program in Canada, is a coalition program that allows customers to earn and redeem rewards across multiple brands, including Shell, Sobeys, and Rona. Customers earn Air Miles for purchases at any of the participating brands, and can then redeem those miles for rewards like travel, merchandise, and discounts.

Step 3: Decide on Rewards

After deciding upon the type of program, you need to decide the rewards you wish to offer. Rewards are what incentivize customers to participate in your loyalty program. They can include discounts, free products or services, exclusive offers, and more. 

When choosing rewards, consider what your customers value and what will motivate them to continue engaging with your business.

Step 4: Create a budget

Setting a budget for your loyalty program is an important step in the development process. It's important to consider the costs associated with program development, such as rewards, software, and marketing, as well as ongoing maintenance and management costs. 

By setting a realistic budget, you can ensure that your loyalty program is financially sustainable and will deliver a positive return on investment for your business.

Step 5: Set Up a System for Tracking Points or Rewards

You'll need a way to track and manage customers' points or rewards, whether that's through a loyalty app, a card-based system, or any other method. 

If you’re a Shopify owner, several Shopify apps can help you implement a loyalty program on your store. Here are a few popular options:

Smile: This app lets you set up a rewards program and loyalty points system for your customers. You can also offer referral bonuses and other incentives to help grow your customer base.

LoyaltyLion: With this app, you can create a customized loyalty program that rewards customers for making purchases, leaving reviews, and engaging with your brand on social media.

S Loyalty: This app lets you create a loyalty program with customizable points and rewards. You can also offer exclusive discounts and bonuses to your most loyal customers. This app offers a variety of loyalty program options, including points-based systems, referral programs, and gift card incentives. It also integrates with several other marketing tools, like email campaigns and social media ads.

Stamped: Stamped is another popular Shopify app that can help you implement a loyalty program on your store. With Stamped, you can reward customers for leaving reviews, making purchases, and referring friends to your store.

Each of these apps has its unique feature and pricing plans, so it's worth checking them out to see which one best fits your store's needs.

Shop2app integrates with both and to help your mobile app shoppers take advantage of your loyalty programs.


Step 6: Promote Your Loyalty Program

Once you have developed your loyalty program, it's time to implement it and promote it to your customers. Use various marketing channels, such as email, social media, and in-store sign-ups, to communicate the benefits of your program and encourage customers to join.

By implementing a loyalty program that is well-suited to your business and your customers' preferences, you can build stronger relationships with your customers and drive repeat business.

ROI of customer loyalty = Better business growth 

In 2018, MVMT launched its loyalty program called "MVMT Rewards" which incentivizes customers to make purchases and refer their friends to the store.

Since launching its loyalty program, MVMT has seen impressive results. They reported a 29% increase in repeat purchase rate among members of their loyalty program compared to non-members. In addition, members of the program had a 40% higher average order value than non-members. MVMT has also been successful in using its loyalty program to drive referrals. They reported that members of their program were 3.4 times more likely to refer a friend to the store compared to non-members. In short, the loyalty program did wonders for their business growth.  If you want to become the next MVMT or a bigger player, remember that building customer loyalty is an ongoing process that requires ongoing attention and investment. By making your customers feel valued and appreciated, you can create a lasting connection that will benefit both your business and your customers. So, take the time to build a loyal customer base that will support your business for years to come. 

A mobile app is a great start if you want to build customer loyalty that outshines your competition. Use Shop2app to turn your Shopify store into a mobile app and revolutionize your shopping experience.

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