UK Retail Loyalty: A Comprehensive 2026 Guide to Engagement Tactics

Here’s how UK retailers keep members engaged as loyalty weakens.

The cost of living has been on the rise for another consecutive year, making loyalty a major savings engine for millions of customers. Households rely on shopping and loyalty apps to relieve their weekly budgets, expecting more than just discounts.

// In the UK, 97% of shoppers are members of at least one supermarket loyalty scheme, with an average of three memberships.

With a demand this strong, the standards for loyalty solutions are higher than ever. Without additional motivation to stick around, customers switch between programs, causing true loyalty to decline in 2025 for the first time in five years.

From here, we’ll review the current state of UK retail loyalty, grounded in industry research and recent market moves toward increased engagement.

Loyalty Today: Growing across Verticals and beyond Transactions

In the UK, loyalty is expanding its map from grocery shopping to most app verticals.

The fashion industry is a great example. After coming out of the Covid era on top, fashion retailers have seen sales decline year after year. More often than not, customers prefer marketplaces and resellers to original brands’ shops. Margin pressure pushes fashion businesses to adopt some tricks from the grocery loyalty: weekly member prices, early access memberships and a clean “free-to-join” pitch.

But it’s not just fashion. PayPal is launching its first-ever UK loyalty programme, adding points into its ecosystem, while Wasabi rolled out its first loyalty app for food-to-go. Paired with Club New Look, these firsts show loyalty spreading beyond grocery into everyday categories where UK shoppers already spend time. Daily rewards and weekly challenges smooth demand between drops, sales, and other busy times. 

Latest Shift: From Transactional Loyalty to Emotional Engagement

UK programmes are widely shifting from purely transactional loyalty to experiences, mentioned just above, and emotional engagement. Discounts still open the door to the programme, but the relationship now lives in what happens between those.

The industry is calling this out directly: loyalty is moving past pure transactions toward trust and personal relevance as the foundation. Customer experience indexes continuously specify that customers are sticking to brands that make them feel appreciated, valued, and happy.

// UK surveys show: younger shoppers still value savings, but they’re more likely to join when programmes offer experience-based rewards.

Purely transactional loyalty pays for spending, so everyone spends to get paid. That’s not only emotionless, but costly for customers because the only path to value is to buy more. Not to mention, it’s costly for retailers too: those double-digit, member-only discounts on rotating offers tighten margins fast.

There’s a better balanced loyalty mantra emerging in the UK: reward engagement, not just spending. Programmes are starting to recognise time, attention, and participation: the behaviours that signal future value. Think simple, always-on activities inside the app, light challenges that can be completed in a session, or partner interactions that provide extra value but don’t require a checkout.

Must-Have Features of UK Retail Loyalty in 2026

For sectors that live on sporadic engagement – and it’s retail, QSR, fintech and telecom among others – loyalty becomes the always-on engagement engine between campaigns. Here’s some universal directions that work across industries:

Innovation Is Necessary 

The UK shows fatigue with same-old points and a push for fresher ideas. 

// 70% of the UK’s loyalty programmes admit the lack of a unique selling point. Customers share the same opinion, with 45% of them feeling that loyalty schemes offer similar benefits. 

High competition drives programme owners to seek out the “new” that would help them stand out. The brief is to bring the edge but keep it simple: memorable mechanics shoppers are attracted to, UX without a how-to, and measurable lifts. 

Experiential Perks for a Premium Feel

Savings get customers in, but what makes them stay in 2026 is experiences that feel special. 

John Lewis is trialling a VIP lounge for My John Lewis members. Inside: free drinks, massages and snacks, designed to pull customers back into the shop. This way, a routine grocery shopping experience becomes something memorable and worth sharing. The retailer goes as far as calling their lounges a ‘third space’.

Waitrose has employed a “treats” strategy, giving away up to three treats a month to customers depending on their spending. Another smart approach here: low-friction, high-frequency recognition that meets shoppers where they already are, building a rhythm of small gains that becomes a habit.

When benefits look the same across rivals, emotional experiences help create perceived surplus beyond raw discount. 

Gamification as the Default

Open Loyalty’s 2025 trends point in one direction: gamification (43%) and experience-based rewards (42%) are set to have the biggest impact on loyalty in the next 2–3 years. 

For UK retailers, that means including missions with simple goals, visible progress, and small, frequent wins to keep engagement warm between promotions and reduce the need for deeper discounts.

We’re already seeing this in the market. Asda Rewards Missions brought engaging in-store tasks that help members build Cashpots faster with coupons and points. This case is now being mirrored by rivals, showing that gamified mechanics in the app flow work at grocery scale. 

// The benchmark is sitting at playable, personalized, always-on experiences that turn the loyalty programme into a daily habit and prove their value in hard KPIs.

You also see games moving mainstream with the same burst-engagement strategy in QSR and delivery apps. Brands use lightweight, in-app play to drive habit-formation between orders. Take KFC’s Arcade and McDonald’s Monopoly promotions with app tie-ins. 

Member-only Pricing Stays Core

It still works because it’s instant and legible right at the shelf. Shoppers see a clear ‘member vs. non-member’ price benefit, tap their app or scan at checkout, and feel the saving immediately. 

// An average discount for loyalty programme members across 50,000 UK supermarkets is 17-25%.

However, when every rival has yellow tags and app banners, member pricing alone becomes less distinctive and more expensive to sustain. The next step is to make those prices the entry point to a broader value loop rather than the whole story. 

Tie visible shelf cuts to personalised with AI, app-led offers that adapt to behaviour. Add rhythm with simple, recurring experiences and goals that bring people back even between promotions. 

Loyalty Programs Come Together

Partnerships turn single-retailer schemes used sporadically into an everyday engagement and savings for consumers. When members can earn and spend across categories and activities, there’s a reason to open the app daily. Today they earn points for a grocery run, tomorrow for playing partner mobile games, and the day after they use their rewards for the flight.

The UK’s biggest coalition to date is Nectar, which covers transaction- and engagement-based rewards from Sainsbury’s, Argos, British Airways, and more. Creating an ecosystem instead of a single scheme, allows Nectar to integrate itself tightly in customers’ daily routines. 

A key partner of Nectar, Avios gives its 13m members access to 2,000+ partners to earn and spend (think big brands like Uber, HelloFresh, and more). That’s a global loyalty currency you can convert. Users earn points on the daily from some brands, then redeem them with others across flights, hotels, and car hires worldwide. A portable currency raises perceived value, which boosts joins, app opens, and retention. 

Personalisation to Be Included

Personalisation is the quiet engine behind all big players. Boots Advantage, M&S Sparks, and their peers orchestrate timely and relevant targeted bonuses: category boosters when you’re active, reactivation signals when you churn, and so on.

// Data shows: 80% of businesses track an average of 38% increase in consumer spending when experiences are personalised

Under the hood, all of them use AI and machine learning. Models predict what customers are most likely to buy next, score their propensity to respond, and select the next best offer instead of flooding them with everything. At this point, only a few brands excel in personalisation, so providing truly personalised experiences based on strong ML models could be a powerful differentiation and retention factor.

This way, customers open the app expecting something immediate, relevant value they’re excited to receive. Not a long list of half-relevant benefits they’ll skim and close.

Always-on over Campaign-only

Campaigns spike traffic, but members need a reason to return even when there’s no big promo or discount: weekly check-ins, streaks, and opportunities to earn rewards beyond the purchase. 

We see a rise in market leaders layering in interactive, bite-size in-app experiences between promotions. Like themed weeks with simple micro-goals, they need to be mobile-native and always on, so the experience fills the quiet periods with something enjoyable to do.

The best programmes make the rhythm obvious on the screen, simple to qualify, and instant to recognise when you’ve made progress. Like Tesco’s Clubcard Challenges which runs rolling, personalised goals over certain periods. That rhythm compounds into more app opens and steadier baskets.

Then, There’s Arcade. All the Must-Haves in One Solution.

Arcade is our answer to where UK loyalty is heading. Arcade sits natively in any mobile rewards app as a friendly gaming space where members earn your points just by playing popular mobile games from personalised selections (the pool covers 80% of the Play Store). No purchase required to generate extra value. It’s simple, fun, always on.

// 25M people in the UK play mobile games regularly. 39% play for 1–2 hours daily. Arcade taps into an existing behaviour and converts it into highly valued points; no new habit required.

The engagement cycle goes: Open app → find Arcade → pick a game → play → earn → redeem → repeat. 

Why We’re Confident It Works

Arcade isn’t a concept. It’s already live with major global programmes (e.g., PAYBACK in Germany, Fetch in the US, Meliuz in Brazil; each a market leader in their respective regions). For these and other programmes, rewarded mobile gaming drives daily engagement, repeat opens, and measurable value across very different markets. 

Shoppers and mobile gamers are largely the same people. They already open their phones multiple times a day and play in short bursts. Candy Crush alone reaches every 1 in 20 adults in the UK. The next step is getting them rewarded for this habit with points of your app. Earning this way feels natural, not novel; so adoption is fast, and engagement is habit-forming.

Arcade is a fun savings engine. As the cost of living rises, Arcade gives customers an always-available way to create value. Rewards are paced in short increments, so earning feels effortless and continuous.

Security & brand safety. You keep control over the game catalogue, aligning content to your brand. adjoe’s anti-fraud and security teams protect integrity end-to-end, so members earn fairly and partners can trust the data.

Personalisation integrated. Dedicated ML models curate game picks to each user’s taste from an extensive catalogue of popular games (spanning ~80% of Play Store), so the experience stays fresh and relevant even as preferences change.

Always-on experiences. With always available short sessions and instant recognition, Arcade creates an engagement rhythm that compounds into more app opens, steadier purchases, and cleaner first-party signals to personalise the next session.

Cross-vertical fit. Works for grocery just as well as for fashion, banking, utility, and more.

What Changes when Arcade Is On

Behaviour. More daily opens, higher offer discovery, shorter time-to-next-purchase; because there’s always something enjoyable to do that earns real value redeemable inside your app.

Economics. Less pressure to escalate discounts. Points are funded by the games (not your margin), and you earn meaningful ad revenue from the installed titles; so engagement adds to your revenue instead of eroding it.

TL;DR

• Cost-of-living pressure turned loyalty into a mobile-first savings engine. With near-universal adoption, the bar now is higher: loyalty now wins with AI-driven personalisation, relevant partnerships, and emotional connection rather than points alone. 
• Member-only pricing still matters, but it needs cadence and partner reach to stay distinctive. UK leaders are shifting beyond purely transactional value to reward attention and participation between shops.
• Our answer is Arcade: a native, brand-safe module that makes your app a daily habit by rewarding members with your points for playing curated mobile games (ML-personalised from a vast catalogue). Earnings are immediate in small increments, always on, and work across verticals. Result: more daily opens and faster repeat purchases; plus economics that reduce discount pressure because points are funded by games and you earn ad revenue.