Ninety-three per cent of Australians belong to at least one loyalty program, according to the 2026 For Love or Money research from The Point of Loyalty. But only half of them are active in all the programs they’ve joined. That gap between membership and meaningful engagement tells you something important: having a card in someone’s digital wallet doesn’t mean you have their loyalty.
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The same research shows that 63 per cent of members believe programs have enough data to tailor relevant offers, yet fewer than two in five actually experience that personalisation. That gap is where loyalty goes to die. The old model—collect points, wait, redeem—no longer matches what Australian consumers expect. They want immediacy, relevance, and value that works across multiple parts of their lives. Here’s what you actually need to know.
The Four Things That Matter Now in Australian Loyalty
What this adds up to is a shift from loyalty as a transaction to loyalty as an experience. The term that captures this shift is the loyalty ecosystem.
What I tend to notice is that businesses still treat loyalty as a program they run, rather than an experience they design. That distinction matters more now than it did five years ago. If you want to see how the digital side of this shift is playing out, it’s worth looking at how customer experience strategies are evolving for a digital-first Australia.
What Happens When You Stick With the Old Model
The cost of ignoring this shift shows up in hard numbers. Sixteen per cent of nonparticipants now say “it takes too long to earn rewards” is their reason for opting out—up two percentage points since 2022, according to McKinsey’s December 2025 Asia–Pacific Consumer Sentiment Survey. That’s a small number in isolation, but it points to a deeper impatience.
Grocery program usage at nearly every visit has slipped five percentage points since 2022. Meanwhile, nearly a quarter of customers are unaware that loyalty programs exist for specific brands. That’s not a marketing problem—it’s a relevance problem. If a program doesn’t surface naturally in someone’s shopping experience, they won’t remember to use it.
The gap between top-quartile and bottom-quartile programs has widened since 2022. Members of the best programs are roughly twice as likely to increase purchase frequency and 79 per cent more likely to recommend the brand compared to members of the weakest programs. That divergence means the middle ground is shrinking. Programs that don’t improve will fall further behind, not just stay where they are.
Four Gaps That Are Killing Loyalty Programs Today
The Data-Personalisation Disconnect
Brands are collecting more data than ever, but it’s not translating into better experiences. Sixty-three per cent of members believe programs have the volume of data to tailor offers, yet only 40 per cent say they often or always receive personalised and relevant offers. That 23-point gap erodes trust. Members notice when a brand knows their buying history but sends generic discounts. The fix isn’t more data—it’s better use of what you already have.
Ignoring the Gen Z Shift
Gen Z active participation dropped from 48 per cent in 2025 to 40 per cent in 2026, according to the For Love or Money research. That’s the steepest year-on-year decline among any age group. Gen Z prioritises experiences over monetary rewards and is more likely to support brands with sustainability commitments, as KPMG’s Australian Retail Outlook 2026 notes. If your program still treats every member the same, you’ll lose this cohort before they reach their peak spending years.
Slow Rewards Kill Engagement
Sixteen per cent of nonparticipants say earning rewards takes too long, and that figure is rising. The same impatience affects existing members. Programs that require months of purchases before a meaningful reward becomes available train people to forget about the program between transactions. Immediate, small rewards—a discount on the next shop, a free item after three visits—outperform delayed gratification in almost every category.
Operating in a Silo
Australian consumers increasingly prefer programs that integrate across partners. The willingness to use points across different brands rose five percentage points since 2022. Grocery programs that connect with airline partners, fuel discounts, and health insurance see higher engagement and awareness—over 90 per cent for the largest programs. A standalone program with no partner integration feels like a dead end. If you’re designing a new program, or revamping an old one, getting professional advice on business structure and compliance can help you avoid costly missteps before you launch.
Building the New Loyalty Engine: What Actually Works
The research points to a clear direction: move from a points-based transaction model to an ecosystem that delivers personalised, immediate value across multiple touchpoints. Here’s what that means in practice.
Flip the Value Proposition
Instead of “earn points and redeem later,” design for “get value now.” Subscription programs like Everyday Extra and Amazon Prime lead satisfaction scores because the benefit is immediate—free delivery, exclusive pricing, instant discounts. The data shows subscription programs score 8 to 15 percentage points higher in satisfaction than traditional equivalents. That doesn’t mean every business needs a paid tier, but it does mean the core mechanic should deliver something useful on every visit, not just once a year.
Use AI to Close the Personalisation Gap
Seventy-four per cent of Australians are now aware of at least one way AI can enhance a loyalty program, up from 66 per cent in 2025. But only 23 per cent are comfortable with an AI agent managing their purchase journey. The opportunity lies in using AI for behind-the-scenes personalisation—curating offers, predicting what a member will want next, and surfacing the right partner deals—without making the technology itself the focus. Tools like AI-powered marketing platforms can help automate this level of personalisation without requiring a full in-house data team.
Build Real Partner Ecosystems
The most successful Australian programs connect across sectors. One major grocery loyalty program links with more than 20 partner brands across retail, travel, and financial services. Another has deepened its ecosystem through airline points conversion, health insurance, and fuel partnerships. The table below shows how the old and new approaches compare across key dimensions.
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| Dimension | Old Loyalty Model | New Loyalty Ecosystem |
|---|---|---|
| Value delivery | Points earned over time, delayed redemption | Immediate everyday value, instant rewards |
| Personalisation | Segmented groups, one-size-fits-all offers | AI-driven, individual-level relevance |
| Member engagement | Passive, transactional, infrequent | Active, experiential, continuous |
| Partner integration | Limited or no cross-brand connections | Multi-sector ecosystem with seamless points use |
| Technology backbone | Basic transaction tracking, static rules | Predictive analytics, AI, mobile-first experience |
Design for Clarity First
The For Love or Money research identifies relevance, ease of understanding, and clarity around rules as top drivers of program satisfaction. Complicated tier structures, blackout dates, and points that expire too quickly all push members away. The programs that score highest on the Loyalty Program Experience Index—Flybuys, Everyday Rewards, McDonald’s My Macca’s Rewards—are all simple to understand and use. If a member can’t explain your program in one sentence, it’s too complicated. For businesses looking to integrate loyalty with their broader ecommerce operations, an ecommerce platform that supports multichannel loyalty features can simplify the technical side considerably.
Prepare for the AI-Enabled Future
McKinsey’s research points to four strategic shifts: move from static segmentation to dynamic AI-enabled insight engines; from static tracking to personalised experiences; from siloed programs to integrated ecosystems; and design for clarity and visible everyday value. Case examples include Delta Air Lines’ AI-powered Concierge assistant in its Fly Delta app and Sephora’s use of AI and machine learning to curate offers. These aren’t futuristic concepts—they’re operating now. The next big ideas in Australian business are already being shaped by this kind of technology integration.
Frequently Asked Questions
Are paid subscription loyalty programs worth it for small businesses? ▾
How do I know if my current loyalty program is underperforming? ▾
Can small businesses compete with Flybuys and Everyday Rewards? ▾
What’s the minimum data I need to start personalising offers? ▾
How concerned should I be about AI trust issues with customers? ▾
What’s the ideal number of partners for a loyalty ecosystem? ▾
Loyalty Without the Program Thinking
The most important finding from this research is that loyalty is no longer a program you run—it’s a byproduct of the experience you deliver every day. The brands pulling ahead are those that treat every interaction as a chance to deliver immediate, personalised value, not as another step toward a future reward. The data is clear: Australian consumers will switch behaviours, try new brands, and pay for subscriptions that actually make their lives easier. The ones that don’t adapt will find their membership numbers looking healthy while their engagement numbers tell a different story.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Consumer Behaviour in Australia: Trends You Need to Know.
Sources and Further Reading
Building a Brand That Aussies Trust: Authenticity in the Digital Age — Explores how trust and peer recommendations are reshaping brand relationships in Australia, directly relevant to the loyalty ecosystem shift.
Building a Resilient Business: Lessons from Australia’s Recent Challenges — Covers the operational discipline and adaptability that underpin successful loyalty and customer retention strategies.
McKinsey & Company (2025). Australian consumer loyalty: Rapid change calls for rapid solutions. 🔗
The Point of Loyalty (2026). 2026 For Love or Money Research: The 14th Australian Edition. 🔗
KPMG Australia (2026). Australian Retail Outlook 2026. 🔗
