United States loyalty and rewards program industry outlook in 2023

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Loyalty programs are experiencing a strong uptick in adoption amid the rising cost of living and surging inflation in the United States. An increasing number of consumers are demanding loyalty programs from their retailers, grocers, and other businesses, thereby resulting in many new and revamped program launches in H2 2022. The trend is projected to further continue in H1 2023, as macroeconomic challenges continue to affect consumer budget and spending. Furthermore, innovation in the segment is also driving industry growth, as businesses are integrating their loyalty programs with NFTs in the United States. 

Starbucks opens up its innovative NFT-powered loyalty program for members in the United States

Loyalty programs have been long seen as a value-added service for consumers while driving revenue per customer for businesses. However, innovation has been lacking in the segment for years. With the advancement in technology, firms are integrating loyalty programs with non-fungible tokens, which further enhances loyalty and rewards program capabilities.

• In December 2022, Starbucks opened up its NFT-powered loyalty program, Starbucks Odyssey, for the first set of members in the United States. Under the program, the firm has launched a new platform where members can interact with different activities, Journeys, and earn digital collectibles, Stamps, for completing them. These collectibles, basically NFTs, allow members to unlock special experiences and benefits.

While the firm had launched the program for only limited members, it has not made the number clear. However, the firm announced that it had received an overwhelming response from its members. Over the next three to four years, PayNXT360 expects more businesses to launch NFT-powered loyalty programs for their customers in the country.

Grocers are launching loyalty programs amid growing demand from shoppers in the United States

Amid rising product prices and surging inflation, consumers are demanding loyalty and rewards programs for their grocers in the United States. This has resulted in many launching the service in 2022 and gaining widespread adoption.

• In October 2022, The Fresh Market, a grocery store chain based in the United States, announced that the brand had amassed more than 1 million members for its loyalty program, which was launched in March 2022. The loyalty program does offer points. Instead, it provides members with lower product prices on specified items, along with free items periodically.

The loyalty program has become a big consideration for Americans to choose the grocer that they would want to shop from in the country. Consequently, more and more grocers are expected to launch such programs. Over the summer, Kroger, one of the leading grocers in the country, also announced the launch of its Boost program. Walmart already has its loyalty program, Walmart+, which the firm launched in 2020.

Retailers are launching and revamping their loyalty programs to offer more value to their customers

In the United States, more and more retailers are seeking to leverage the growing popularity of loyalty programs among consumers. As a result, a growing number of new programs have been launched, while some are also revamping their programs to offer more value to their shoppers.

• In November 2022, Marks and Spencer announced the launch of a revamped loyalty program Sparks to its millions of members in the global market. Along with the United States, the firm launched the program in India and other 24 more markets worldwide. The program aims to deliver a more personalized loyalty program to its global members.
• In August 2022, Bath & Body, another retailer in the United States, announced the launch of its loyalty program across the country. According to the firm, members of the loyalty program spend much higher compared to other customers. Furthermore, the retention rate is also higher for the retailer. The program is available for both online and in-store shoppers.

From the short to medium-term perspective, PayNXT360 expects more global and domestic retailers operating in the United States to launch loyalty programs. With declining consumer spending, amid rising inflation and product prices, consumers are expected to adopt loyalty and rewards programs in increasing numbers. This will keep supporting the growth of the overall industry in the United States.

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