With consumer confidence wavering, discretionary spending falling, and expectations rising, UK retailers are facing some of the most testing trading conditions in recent history.
The industry has come to recognise that digital loyalty isn’t just a ‘nice-to-have’, it’s an essential. Increasingly, mobile-first loyalty (when done right) is emerging as the frontline defence in protecting and growing market share for retailers looking to remain competitive in difficult times, writes Sarah Toms, Retail Growth Director, Apadmi.
At Apadmi, our latest Digital Customer Loyalty Report has revealed a decisive shift in mindset among senior retail leaders. A majority now see digital loyalty not as a secondary marketing tool, but as a critical pillar of their customer strategy. In fact, nearly two-thirds expect to increase their investment in mobile-first loyalty initiatives over the next 12 months, despite broader pressures on budgets.
This signals a new reality for the grocery sector: loyalty has evolved. It’s no longer just about collecting points or delivering seasonal vouchers. The industry has shifted towards smart, data-driven experiences that resonate emotionally and reward customers for their time, attention and repeat custom – not just their spend. These mobile experiences have the ability to bridge the in-store and online experiences; as our client at Poundland likes to say, “the app bridges our clicks and our bricks!” – aiding greater omnichannel integration.
Shifting focus from acquisition to retention
Economic headwinds are forcing a strategic pivot from focusing on acquisition to increasing focus on retention. As inflation and cost-of-living concerns continue to plague retailers, consumer loyalty can no longer be taken for granted.
For grocery retailers, this presents both a challenge and an opportunity. With acquisition costs rising across all channels, particularly digital, nurturing existing relationships offers better ROI. Retained customers spend more, cost less and are more likely to advocate; but their loyalty can’t be earned passively. Today’s consumers demand value, convenience, and increasingly, a sense of connection to your brand.
That’s why leading grocery brands are rethinking what loyalty really means to them, and their customers.
Redefining loyalty with mobile
Traditionally, loyalty schemes have relied on a straightforward value exchange of points for pounds spent via a plastic card, but today’s consumers expect much more. Our research has found that more than 60% of businesses already use personalisation to some extent, but see room for improvement, or plan to enhance it further. This shift is driving a wave of innovation, where mobile is the key driver of this enhanced level of personalisation, with the most effective mobile experiences blending functional benefits with emotional connection, creating a holistic experience that goes beyond the transactional. At its core, mobile loyalty is about recognition, relevance and relationship-building.
This is where mobile comes into its own. With the right technology in place, retailers can harness real-time data to create tailored experiences at scale; from personalised offers and app-based rewards, to location-based perks and gamified incentives. When done well, mobile loyalty becomes an extension of the brand experience itself.
Case study: Combining convenience and connection in customer routines with Co-op
A compelling example of mobile loyalty done right is the Co-op’s enhanced mobile app experience, developed in partnership with Apadmi. The Co-op already had a strong community ethos, but the challenge was to deepen engagement in a way that felt convenient, valuable and aligned with its ethical brand identity.
The result is a mobile-first loyalty proposition within a feature-rich app. Members can access exclusive deals that refresh on a weekly basis, track their rewards, enjoy seasonal gamification, and even select the local causes they want their purchases to support. Members are also able to get first in line for offline experiences via the app with tickets for Co-op Live. By putting power and purpose in customers’ hands, the app not only drives routine, but also reinforces emotional loyalty – a critical differentiator in a crowded market.
The results have been clear: deeper engagement, more frequent visits, and stronger customer advocacy. For Co-op, the product drives a 12:1 ROI on every pound invested in its initial development. It’s a reminder that loyalty is built beyond the checkout; it’s built across the full customer journey.
The risk of irrelevance
For those retailers still relying on legacy loyalty models, the message is clear: brands that don’t act fast to adopt mobile as a key driver of their retention strategy will be left behind. Inaction is a risk. In a sector as competitive as grocery, where switching costs are low and consumer choice is high, standing still means falling behind.
And consumers notice. In 2024, our research with over 1000 UK shoppers found that almost 1 in 5 customers would choose to shop elsewhere due to a poor mobile experience. Conversely, those who feel rewarded and recognised on a seamless mobile journey are more likely to stick around – even in tougher times.
With the right strategy, digital loyalty can become a powerful lever for growth. But it must be underpinned by insight, powered by technology, and designed around the real needs of customers, not just the needs of your business.
What’s next? Redefining the grocery experience with next-gen mobile
While many grocers are still optimising the fundamentals of their mobile loyalty proposition, the most forward-thinking brands are already exploring next-generation technologies that could transform how customers shop, where they shop, and who they choose to shop with.
At Apadmi, we’re exploring how emerging display tech, including consumer-grade augmented and mixed reality (AR/MR) and more accessible “light AR” integrations, will deliver smarter, more immersive grocery experiences that drive customer engagement and retention.
Imagine in-store navigation tools that use AR to guide shoppers to specific items on their list, highlight offers as they pass, or flag allergen or sustainability data in real time. Or virtual shopping assistants that offer tailored product swaps based on dietary preferences, previous purchases, or even what’s already in the customer’s fridge.
Other potential use cases include:
• Virtual store maps and aisle-by-aisle shopping guidance for quicker, more efficient trips
• Smart overlays on products that show price comparisons, loyalty benefits or eco-ratings
• Real-time virtual queuing systems to streamline checkout and manage in-store flow
• AI-powered meal planning tools that link ingredients to recipes, offers and personal dietary goals
• Augmented promotions that gamify loyalty, boost app usage, and increase basket size
This shift toward next-generation mobile is about making grocery shopping more personalised, efficient and rewarding. As digital expectations continue to rise, grocers that embrace these technologies early will be best placed to deepen loyalty.
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