Many grocery and convenience store loyalty programs have existed for years, starting out as card-based programs that have adapted to the digital age by becoming app-based reward models. These programs have evolved as customer expectations have changed, due in no small part to the arrival of a new generation of consumers.
One thing that’s become clear to brands in the space is that their perception of delivering value to their customers must become more innovative. While shoppers will always appreciate a good deal, value today needs to go beyond just offering discounts.
In this Supplier Perspectives, leaders from Braze, Capillary Technologies, and FIS share how personalization has become crucial to driving loyalty, the way loyalty programs are being powered by customer data, the role AI is playing in delivering value, and what’s needed to meet the expectations of younger generations.
Contributors
- Meredith Mitchell, Head of Retail and E-Commerce Industry Marketing, Braze
- Rod Diaz, Director of Strategic Solutions Sales, Capillary Technologies
- Mladen Vladic, Head of product management, Payment Networks, FIS
From Transactions to Relationships: How Personalization Is Redefining Loyalty
As elevated inflation continues to challenge individuals and their pocketbooks, it’s created ongoing value sensitivity among consumers. This is putting pressure on brands to rethink and elevate their loyalty programs to meet the changing expectations that their customers have when it comes to value.
“The brands winning in this environment have fundamentally reframed what value actually means to their customers,” said Meredith Mitchell, Head of Retail and E-Commerce Industry Marketing at Braze. “Value is no longer synonymous with the lowest price; it is a combination of relevance, convenience, and recognition.”
Mitchell notes that the most forward-thinking grocery and convenience brands have made a deliberate shift from transactional loyalty to a loyalty relationship, “where the brand demonstrates it genuinely understands the customer,” she said.
Rod Diaz, Director of Strategic Solutions Sales at Capillary Technologies, points out that “price remains an important factor” in where customers choose to shop, but they are no longer looking for just discounts. Instead, they want brands to understand their individual needs, preferences, and shopping behaviors in a way that goes beyond transactional savings.
“We’re seeing retailers leverage customer data to create highly personalized experiences that make shoppers feel both recognized and understood,” Diaz said. “Rather than delivering the same promotion to everyone, brands are using unified customer data platforms and AI-powered tools to surface relevant rewards, recommendations, and experiences based on individual purchase patterns.”
Modern Loyalty Starts with Unified Data and Frictionless Engagement
According to Mladen Vladic, Head of Product Management, Payment Networks at FIS, many of the loyalty programs for grocery and convenience chains were built during the era when earning points and waiting for a statement credit was the norm. While they served their purpose at the time, today’s customers are demanding something much more modern.
“Traditional card-linked offers still require cardholders to activate offers, and rewards often arrive days after the purchase,” Vladic said. “That separation between action and reward works against the immediacy consumers now expect.”
He points to the way FIS Smart Basket operates, where savings are applied automatically, requiring no activation, no codes, and no extra steps.
“Modernizing means removing friction at every step,” Vladic said. “Real-time loyalty redemption lets cardholders use their earned rewards directly within the authorization flow, rather than waiting for delayed gratification.”
Diaz notes that data is powering the loyalty transformation for brands, allowing them to connect customer interactions across both digital and physical channels to create a complete, unified view of each shopper. The retailers that succeed will be those who remove friction and make every interaction feel timely, relevant, and valuable, he adds.
“At Capillary, our Customer Data Platform gives brands that single view—enabling them to engage shoppers in more meaningful ways at every stage of the journey, with relevance and timing that point-based programs simply can't match,” Diaz said.
He adds that soon customers won’t see loyalty as a separate program but will “simply experience a brand that consistently anticipates their needs and rewards them in ways that feel natural and personal.”
The Shift from Mass Marketing to Real-Time Personalization Through AI
In addition to unified customer data, another crucial tool that many brands are turning to in order to ramp up their personalization initiatives is AI. Although companies are moving at different speeds in implementing it, it’s clear that the technology has gone from experimental to essential, and the brands treating it as strategic infrastructure are the ones who will win, according to Mitchell.
“AI's most immediate impact on loyalty and engagement is operational: it dramatically compresses the time between insight and execution,” she said. “Tasks that once required technical resources, like building a behavioral segment, drafting and testing message variants, and determining the optimal send time for an individual customer, can now be completed in minutes.”
She sees retail media networks representing perhaps the most significant structural shift.
“Grocers are monetizing their first-party data by transforming digital platforms into advertising ecosystems, allowing CPG brands to reach shoppers with precision at the point of purchase intent,” Mitchell said.
Diaz expects to see AI continue to evolve from simply predicting customer behavior to actively orchestrating personalized customer journeys in real time. The retailers that successfully combine AI, predictive analytics, and customer data will be able to create experiences that feel increasingly intuitive and personalized, strengthening both engagement and lifetime value, he said.
Meanwhile, Vladic said that the biggest shift that FIS sees happening through AI is a move from transaction-level signals to basket-level intelligence, which is changing how loyalty and personalization can work in grocery and convenience retail.
“When you know what's in someone's basket, not just where they shopped or how much they spent, you can deliver offers that are genuinely relevant,” he said.
Customers Don’t See Channels—They See One Brand
One of the most important factors that goes into how brands create a frictionless experience for customers is delivering the same experience across all the channels in which they shop. To do this, retailers are investing heavily in unified customer data platforms that create a single view of the customer across every touchpoint, allowing brands to maintain consistency in promotions, pricing, inventory visibility, rewards, and personalization regardless of where the interaction occurs, according to Diaz.
“Today’s consumers don’t think in terms of channels,” he said. “They simply expect brands to recognize them and serve them consistently, regardless of whether they’re shopping in-store, browsing a mobile app, placing a delivery order, or using curbside pickup.”
Although the world “omnichannel” has been in the retail vocabulary for over a decade, Mitchell sees most brands still being in the early stages of delivering it. And the retailers who are doing this are the ones solving the data infrastructure problem first, she notes.
“Customer data collected at the point of sale does not talk to the mobile app, which does not talk to the third-party delivery platform, which does not talk to the loyalty program,” Mitchell said. “The result is a customer who feels like a stranger every time they switch channels, even if they have been shopping with that brand for years.”
From Rewarding Purchases to Anticipating Needs
As customer data becomes increasingly important to how brands create more effective loyalty programs, customers have become more willing to share their data if they get tangible value in return, according to Diaz. However, the bar for “tangible value” keeps rising because consumers have “been trained by the best digital experiences in the world to expect brands to know them, and grocery is still catching up,” he adds.
“The next evolution of loyalty will involve predictive purchasing and proactive shopping experiences,” Diaz said. “Retailers already possess a tremendous amount of behavioral data, and AI is making it possible to act on that data more effectively than ever.”
Vladic sees three consumer trends taking shape in the grocery business: the growing openness among consumers to use autonomous shopping, the rise of agent-mediated shopping, and the shift from static rewards to real-time, basket-aware incentives, as consumers increasingly expect value at the moment of purchase.
“More than half of consumers already show willingness to let AI optimize their deals, payment choices and purchases,” Vladic said. “Younger shoppers, particularly Gen Z, treat payment choice as part of the savings decision, noticing payment-linked rewards at five times the rate of older generations. It'll expand, and brands that aren't building for it now are building for yesterday.”
As Consumer Expectations Rise, Loyalty Must Become More Intelligent
Mitchell sees the personalization expectation gap widening, noting how Gen Z and younger millennials have been shaped by platforms with built-in personalization features. She points to platforms such as Netflix, Spotify, and TikTok as helping to shape an entire generation’s expectations for relevance to be a default feature, rather than a premium one.
Because many loyalty programs in the grocery industry were built for a different era—before the internet was widely used, much less AI—brands can sometimes find themselves playing catch-up to meet the expectations of the modern consumer. But by utilizing customer data and embracing new technologies like AI, brands can build loyalty programs personalized to each consumer’s shopping habits across every channel that they shop.
As consumers increasingly place greater importance on personalization, brands know that delivering value no longer means just offering the lowest price; it’s demonstrating that they truly know their customers.