Rewards Attract, Experience Retains
Your Customer’s New Gatekeeper
No Standard Playbooks
Building for the New Era of Loyalty
Your brand is being filtered out. A seismic shift is fundamentally changing how consumers relate to loyalty, and most brands aren’t built for it.
More than half of AI users have already turned to an AI assistant to help them decide where to shop, what to buy, or which brand to use. And among all respondents, nearly 1 in 3 have gone a step further: deliberately opening an AI assistant — ChatGPT, Gemini, Copilot, and a growing field of others — and telling it which brands to favor above all others. It is a deliberate hardcoding of their preferences directly into the algorithms that will shape every future recommendation they receive. Brands that haven't been chosen won't just lose, they won't even be considered; removed from the equation before the decision-making process begins.
And consumers aren't stopping there. Fifty-six percent are now comfortable with AI filtering their brand communications entirely, actively inviting an algorithm to decide what's worth their attention. That means AI isn't just influencing decisions, it's becoming the filter between your brand and your customer.
have told an AI assistant to favor certain brands over others
Welcome to the Preference Economy.
Across 3,000 consumers surveyed in the United States and United Kingdom, one finding was unambiguous: “Preference Setters” are proliferating across every demographic and they’re not waiting to be marketed to. They’re engineering their own commercial reality, with a growth trajectory that makes the urgency clear: 24% of consumers say they'll be regularly setting AI brand preferences within the next year, and another 21% within a few years. Combined with a 30% "maybe" cohort, the realistic addressable market for AI-native loyalty is north of 70% within three years.
None of this emerged in a vacuum. The Preference Economy accelerates a problem that was already eroding the foundation of traditional loyalty: indifference. The average consumer is enrolled in four to six loyalty programs, but active participation varies. A meaningful cohort — disproportionately older, but present across every segment — doesn't engage with any of them. They’ve disappeared, operating as ghost members and illustrating that the brand never felt personal enough to matter.
Given this reality, the brands that will define the next era of loyalty will earn a place in their customers' preferences before the algorithm decides they're irrelevant. That window is open right now, but the data make it clear it won't be for long. The Preference Economy won’t reward hesitation.
Rewards
Attract, Experience
Retains
The data reveal a paradox sitting at the heart of modern loyalty marketing, and it’s costing brands more than they realize.
When we gave 3,000 consumers a choice between two companies — Company A, with better rewards but a clunky experience, or Company B, with worse rewards but a seamless one — 53% chose Company B. Only 24% chose Company A. They picked the brand with inferior rewards. And yet, when those same consumers were asked to design their ideal loyalty program, 40% ranked “generous rewards worth earning” as their #1 feature. This is the central paradox of loyalty marketing: Consumers want rewards, but, when forced to choose, they pick experience.
No cohort illustrates this more sharply than consumers aged 25–34. This group is the most intensely engaged loyalty segment, participating in more programs, more frequently, and more meaningfully than any other cohort. They are also the most likely to leave. Sixty-one percent have already abandoned a brand they were loyal to because a competitor offered a better experience, even when that competitor had a worse rewards program. And they’re not alone: 57% of 35–44-year-olds have done the same, making the 25–44 demographic collectively the most volatile audience. Part of what’s driving this is a generational relationship with time itself: 56% of 18–24-year-olds cite time savings as a primary driver of loyalty, a figure that declines almost perfectly linearly with age, dropping to just 19% among consumers aged 65 and older. For Gen Z and millennials, frictionless isn’t a feature; it’s an expectation. Nearly 3 in 10 would be relieved if rewards were replaced with better experiences entirely.
of 25-34 have abandoned a brand they were loyal to for a better experience
When consumers were asked what actually drives their loyalty, no single factor dominated. The quality of the experience topped the list, with rewards a close second, followed by trusting the brand, feeling like the brand knows them, believing in what the brand stands for, and feeling connected with others who share their interests or values. The experience-forward, AI-ready preference-economy consumer is a mid-career professional with disposable income, multiple AI apps, and zero tolerance for a clunky redemption interface.
This challenges a common assumption that the youngest consumers are leading the charge away from traditional rewards toward experience. The data show otherwise. Young adults (18-24) are actually the most rewards-loyal demographic. Recall that only 24% of all consumers chose Company A, the rewards-first option. Among 18–24-year-olds, that figure climbs to 39%, the highest of any age group. For this cohort, rewards still carry genuine pull. The shift is happening one rung up the life-stage ladder (ages 25-34), among consumers with more spending power, higher expectations, and less patience for friction. Yet even here, the paradox holds: That same 18–24 cohort — the most rewards-loyal by choice — is also the most likely to cite time savings (56%) as the reason they'd switch to a competitor with a worse rewards program. They value rewards until friction makes them not worth it.
The through-line across all of it is this: Rewards get consumers in the door, but experience determines whether they stay. Brands that treat those two things as separate work streams, optimizing one at the expense of the other, will keep losing their best customers to whoever figured out how to do both.
Your Customer’s New Gatekeeper
The desire for frictionless experience isn't just a preference, it's a catalyst. And nothing removes friction quite like AI. That dynamic is already playing out at scale: More than half of those surveyed have used AI for help with a shopping decision in the past three months alone. Among those, nearly a third say they trust the AI recommendations a lot, often acting on them directly. When looking at all survey respondents — not just AI users — 47% trust AI at least somewhat as a starting point for brand and product research, and 16% trust it enough to act on its purchase recommendations without further deliberation. The consumer hasn't abandoned decision-making, they've delegated it.
What makes this particularly significant is where AI sits in the consumer's world relative to other data-sharing touchpoints. Consumers are actually more comfortable with AI learning their brand preferences than they are with website cookies or social media tracking, which are channels brands have built entire strategies around. Nearly a quarter of respondents were completely comfortable with AI learning their preferences, compared to 20% for cookies and just 17% for social media. The permission base for the Preference Economy is larger than most brands assume. The obstacle isn't consumer discomfort, it's brand readiness.
That readiness gap becomes even more striking when you consider what consumers say they're willing to do. After being introduced to the concept, 62% said they would share their brand preferences directly with an AI assistant, and only 17% actively refused. When asked about concerns with sharing brand preferences with AI, the data reveal that resistance is far more generational than it is categorical. Privacy concerns are concentrated among older cohorts, with consumers aged 65+ over-indexing across nearly every concern category. Among 25–34-year-olds — the most loyalty-active, highest-switching, most AI-ready segment in the study — 27% have no concerns at all. And among the youngest consumers surveyed, the most common response wasn't hesitation or resistance; it was that they simply hadn't thought about it yet. That's an audience waiting for brands to invite them in.
are comfortable with AI managing their brand communications entirely
More than half of consumers (56%) are now comfortable with AI managing their brand communications entirely, deciding on their behalf what is worth their attention. Among 25–34- and 35–44-year-olds — consumers who we have already established are at the center of the Preference Economy — about 1 in 3 would actually prefer this. For brands, the implication is a fundamental shift in what loyalty actually needs to accomplish: the question is no longer whether you’re being considered but whether your customers are loyal enough to make sure you’re not getting filtered out.
These findings illustrate that the brands that haven’t been encoded as a preference won’t be rejected outright. They’ll simply be deprioritized, summarized, and eventually invisible. Though earning a customer’s genuine preference is still the goal, what’s new is that their preference now gets expressed somewhere it never did before: in the instructions they give their AI. That's only more reason to invest in building loyalty deliberately.
Underlying all of it is a more fundamental requirement: first-party data. Brands that haven’t built a rich, consolidated view of their customers will find personalization aspirational rather than operational. They won’t have the right information to meaningfully feed the AI systems increasingly making decisions on their customers’ behalf.
No Standard Playbooks
Even as the loyalty landscape shifts, the data make clear that what works in one industry won’t apply directly to another. This survey explored nuances across QSR, clothing & retail, travel, and financial services, and the strategic priorities shift in ways that matter. One truth holds across all of them: Brands that lean on generic playbooks without a clear strategic foundation will leave real value on the table. Below is a sampling of what the research reveals by category.
QSR
The loyalty opportunity isn't more rewards, it's fewer barriers to using them.
What it means for brands: Three priorities rose to the top when consumers described what would meaningfully improve their loyalty experience. More than half (53%) want rewards that don't expire. Nearly as many, 52%, want faster and easier ways to redeem them. And 40% want offers that are personalized to what they actually buy. For brands, that's a clear brief: Use data to surface the right offer at the right moment and make redemption so seamless it never becomes a reason to disengage.
CLOTHING & RETAIL
Consumers stay because the brand reflects who they are. But the biggest risk isn't losing core customers, it's never being found by new ones.
What it means for brands: Existing loyalists are habitual enough that they don't need AI to remind them, considering 37% of respondents shop at certain brands because they genuinely prefer them. But new consumers are using AI for discovery, which means brands that aren't optimizing for AI-driven discoverability are quietly losing the acquisition battle before it even begins. That means they need to think beyond traditional SEO and understand how their value proposition, reviews, and content are being interpreted by AI systems.
TRAVEL
Recognition is the highest-ROI loyalty intervention, but nearly a quarter of loyalty members have never experienced it.
What it means for brands: A front-desk agent who knows your name, an app that remembers your preferences, a service interaction that makes you feel like a person rather than a booking number. These moments outperform bonus points offers in driving lasting loyalty.
FINANCIAL SERVICES
Twelve percent stay simply because switching is hard. But with 50% having already switched or seriously considered it for a better experience, that barrier is more fragile than it looks.
What it means for brands: Passive retention is not a loyalty strategy. Earn genuine preference by getting rewards value, trust, and digital experience right, with an increasing emphasis on the latter as more of the relationship moves online.
Building for the New Era of Loyalty
The rules governing loyalty — how it's built, how it's lost, and how it's maintained — are changing faster than most brand strategies can absorb. The brands that will win are the ones that understand the full picture of the modern consumers’ relationship to loyalty and build accordingly:
Investing in experience is a critical, immediate need. At least 53% of consumers choose a better experience over a better rewards program when forced to decide. That's a revealed preference, not a stated one — and it's the one that should be driving your loyalty investment. Make the app work. Make redemption effortless. Make the customer feel known. As evidenced by the power of customer recognition in the travel space, for instance, you don’t spur brand love and incrementality with points; you do so by recognizing the customer and making them feel special. These are the primary drivers of retention for the consumers most likely to switch and most likely to take others with them when they do. That also means measuring it; emotional resonance earns you a preference, and you can’t protect what you’re not tracking.
The Preference Economy won’t wait. Build accordingly. You are now marketing to two audiences simultaneously: your customer and your customer’s AI. Getting encoded as a preferred brand isn’t a soft win — it’s as strategic as acquisition and as critical as retention. The 42% who know they can set preferences but haven’t are highly addressable. They don’t need education; they need a reason and a moment. And the consumers who have already set preferences are just as important, because preferences aren’t permanent. If your brand isn’t actively earning its place in that consideration set, another one will.
Build for your customer, not the category average. Brands will lose customers if loyalty isn’t built around the specific friction points, motivations, and expectations of the consumers they’re trying to keep. Too many programs suffer from disconnected mechanics and misaligned incentives that don’t hold together across segments. The fix is consolidating your understanding of the consumer into a single view, making precision possible: the right engagement, the right moment, the right market. Generic program design gets generic results. In the Preference Economy, brands must earn a specific consumer’s preference, not a demographic average.
The underlying structure of the market is shifting. With AI, consumers are building a new intermediary layer between themselves and brands, and it’s already making recommendations, filtering messages, and encoding preferences for a growing share of your customers. The brands that earn their place in that layer will have a structural advantage that compounds over time. The ones that don’t won’t just fall behind — they’ll be filtered out.
Share On LinkedIn
GALE is a Business Agency.
We bring business strategy to brand storytelling to drive enterprise value.
Learn More
Rewards Attract, Experience Retains
Your Customer’s New Gatekeeper
No Standard Playbooks
Building for the New Era of Loyalty
Your brand is being filtered out. A seismic shift is fundamentally changing how consumers relate to loyalty, and most brands aren’t built for it.
More than half of AI users have already turned to an AI assistant to help them decide where to shop, what to buy, or which brand to use. And among all respondents, nearly 1 in 3 have gone a step further: deliberately opening an AI assistant — ChatGPT, Gemini, Copilot, and a growing field of others — and telling it which brands to favor above all others. It is a deliberate hardcoding of their preferences directly into the algorithms that will shape every future recommendation they receive. Brands that haven't been chosen won't just lose, they won't even be considered; removed from the equation before the decision-making process begins.
And consumers aren't stopping there. Fifty-six percent are now comfortable with AI filtering their brand communications entirely, actively inviting an algorithm to decide what's worth their attention. That means AI isn't just influencing decisions, it's becoming the filter between your brand and your customer.
have told an AI assistant to favor certain brands over others
Welcome to the Preference Economy.
Across 3,000 consumers surveyed in the United States and United Kingdom, one finding was unambiguous: “Preference Setters” are proliferating across every demographic and they’re not waiting to be marketed to. They’re engineering their own commercial reality, with a growth trajectory that makes the urgency clear: 24% of consumers say they'll be regularly setting AI brand preferences within the next year, and another 21% within a few years. Combined with a 30% "maybe" cohort, the realistic addressable market for AI-native loyalty is north of 70% within three years.
None of this emerged in a vacuum. The Preference Economy accelerates a problem that was already eroding the foundation of traditional loyalty: indifference. The average consumer is enrolled in four to six loyalty programs, but active participation varies. A meaningful cohort — disproportionately older, but present across every segment — doesn't engage with any of them. They’ve disappeared, operating as ghost members and illustrating that the brand never felt personal enough to matter.
Given this reality, the brands that will define the next era of loyalty will earn a place in their customers' preferences before the algorithm decides they're irrelevant. That window is open right now, but the data make it clear it won't be for long. The Preference Economy won’t reward hesitation.
Rewards
Attract, Experience
Retains
The data reveal a paradox sitting at the heart of modern loyalty marketing, and it’s costing brands more than they realize.
When we gave 3,000 consumers a choice between two companies — Company A, with better rewards but a clunky experience, or Company B, with worse rewards but a seamless one — 53% chose Company B. Only 24% chose Company A. They picked the brand with inferior rewards. And yet, when those same consumers were asked to design their ideal loyalty program, 40% ranked “generous rewards worth earning” as their #1 feature. This is the central paradox of loyalty marketing: Consumers want rewards, but, when forced to choose, they pick experience.
No cohort illustrates this more sharply than consumers aged 25–34. This group is the most intensely engaged loyalty segment, participating in more programs, more frequently, and more meaningfully than any other cohort. They are also the most likely to leave. Sixty-one percent have already abandoned a brand they were loyal to because a competitor offered a better experience, even when that competitor had a worse rewards program. And they’re not alone: 57% of 35–44-year-olds have done the same, making the 25–44 demographic collectively the most volatile audience. Part of what’s driving this is a generational relationship with time itself: 56% of 18–24-year-olds cite time savings as a primary driver of loyalty, a figure that declines almost perfectly linearly with age, dropping to just 19% among consumers aged 65 and older. For Gen Z and millennials, frictionless isn’t a feature; it’s an expectation. Nearly 3 in 10 would be relieved if rewards were replaced with better experiences entirely.
of 25-34 have abandoned a brand they were loyal to for a better experience
When consumers were asked what actually drives their loyalty, no single factor dominated. The quality of the experience topped the list, with rewards a close second, followed by trusting the brand, feeling like the brand knows them, believing in what the brand stands for, and feeling connected with others who share their interests or values. The experience-forward, AI-ready preference-economy consumer is a mid-career professional with disposable income, multiple AI apps, and zero tolerance for a clunky redemption interface.
This challenges a common assumption that the youngest consumers are leading the charge away from traditional rewards toward experience. The data show otherwise. Young adults (18-24) are actually the most rewards-loyal demographic. Recall that only 24% of all consumers chose Company A, the rewards-first option. Among 18–24-year-olds, that figure climbs to 39%, the highest of any age group. For this cohort, rewards still carry genuine pull. The shift is happening one rung up the life-stage ladder (ages 25-34), among consumers with more spending power, higher expectations, and less patience for friction. Yet even here, the paradox holds: That same 18–24 cohort — the most rewards-loyal by choice — is also the most likely to cite time savings (56%) as the reason they'd switch to a competitor with a worse rewards program. They value rewards until friction makes them not worth it.
The through-line across all of it is this: Rewards get consumers in the door, but experience determines whether they stay. Brands that treat those two things as separate work streams, optimizing one at the expense of the other, will keep losing their best customers to whoever figured out how to do both.
YourCustomer’sNew Gatekeeper
The desire for frictionless experience isn't just a preference, it's a catalyst. And nothing removes friction quite like AI. That dynamic is already playing out at scale: More than half of those surveyed have used AI for help with a shopping decision in the past three months alone. Among those, nearly a third say they trust the AI recommendations a lot, often acting on them directly. When looking at all survey respondents — not just AI users — 47% trust AI at least somewhat as a starting point for brand and product research, and 16% trust it enough to act on its purchase recommendations without further deliberation. The consumer hasn't abandoned decision-making, they've delegated it.
What makes this particularly significant is where AI sits in the consumer's world relative to other data-sharing touchpoints. Consumers are actually more comfortable with AI learning their brand preferences than they are with website cookies or social media tracking, which are channels brands have built entire strategies around. Nearly a quarter of respondents were completely comfortable with AI learning their preferences, compared to 20% for cookies and just 17% for social media. The permission base for the Preference Economy is larger than most brands assume. The obstacle isn't consumer discomfort, it's brand readiness.
That readiness gap becomes even more striking when you consider what consumers say they're willing to do. After being introduced to the concept, 62% said they would share their brand preferences directly with an AI assistant, and only 17% actively refused. When asked about concerns with sharing brand preferences with AI, the data reveal that resistance is far more generational than it is categorical. Privacy concerns are concentrated among older cohorts, with consumers aged 65+ over-indexing across nearly every concern category. Among 25–34-year-olds — the most loyalty-active, highest-switching, most AI-ready segment in the study — 27% have no concerns at all. And among the youngest consumers surveyed, the most common response wasn't hesitation or resistance; it was that they simply hadn't thought about it yet. That's an audience waiting for brands to invite them in.
are comfortable with AI managing their brand communications entirely
More than half of consumers (56%) are now comfortable with AI managing their brand communications entirely, deciding on their behalf what is worth their attention. Among 25–34- and 35–44-year-olds — consumers who we have already established are at the center of the Preference Economy — about 1 in 3 would actually prefer this. For brands, the implication is a fundamental shift in what loyalty actually needs to accomplish: the question is no longer whether you’re being considered but whether your customers are loyal enough to make sure you’re not getting filtered out.
These findings illustrate that the brands that haven’t been encoded as a preference won’t be rejected outright. They’ll simply be deprioritized, summarized, and eventually invisible. Though earning a customer’s genuine preference is still the goal, what’s new is that their preference now gets expressed somewhere it never did before: in the instructions they give their AI. That's only more reason to invest in building loyalty deliberately.
Underlying all of it is a more fundamental requirement: first-party data. Brands that haven’t built a rich, consolidated view of their customers will find personalization aspirational rather than operational. They won’t have the right information to meaningfully feed the AI systems increasingly making decisions on their customers’ behalf.
No
Standard Playbooks
Even as the loyalty landscape shifts, the data make clear that what works in one industry won’t apply directly to another. This survey explored nuances across QSR, clothing & retail, travel, and financial services, and the strategic priorities shift in ways that matter. One truth holds across all of them: Brands that lean on generic playbooks without a clear strategic foundation will leave real value on the table. Below is a sampling of what the research reveals by category.
QSR
The loyalty opportunity isn't more rewards, it's fewer barriers to using them.
What it means for brands: Three priorities rose to the top when consumers described what would meaningfully improve their loyalty experience. More than half (53%) want rewards that don't expire. Nearly as many, 52%, want faster and easier ways to redeem them. And 40% want offers that are personalized to what they actually buy. For brands, that's a clear brief: Use data to surface the right offer at the right moment and make redemption so seamless it never becomes a reason to disengage.
CLOTHING & RETAIL
Consumers stay because the brand reflects who they are. But the biggest risk isn't losing core customers, it's never being found by new ones.
What it means for brands: Existing loyalists are habitual enough that they don't need AI to remind them, considering 37% of respondents shop at certain brands because they genuinely prefer them. But new consumers are using AI for discovery, which means brands that aren't optimizing for AI-driven discoverability are quietly losing the acquisition battle before it even begins. That means they need to think beyond traditional SEO and understand how their value proposition, reviews, and content are being interpreted by AI systems.
TRAVEL
Recognition is the highest-ROI loyalty intervention, but nearly a quarter of loyalty members have never experienced it.
What it means for brands: A front-desk agent who knows your name, an app that remembers your preferences, a service interaction that makes you feel like a person rather than a booking number. These moments outperform bonus points offers in driving lasting loyalty.
FINANCIAL SERVICES
Twelve percent stay simply because switching is hard. But with 50% having already switched or seriously considered it for a better experience, that barrier is more fragile than it looks.
What it means for brands: Passive retention is not a loyalty strategy. Earn genuine preference by getting rewards value, trust, and digital experience right, with an increasing emphasis on the latter as more of the relationship moves online.
Building for
the New Era
of Loyalty
The rules governing loyalty — how it's built, how it's lost, and how it's maintained — are changing faster than most brand strategies can absorb. The brands that will win are the ones that understand the full picture of the modern consumers’ relationship to loyalty and build accordingly:
Investing in experience is a critical, immediate need. At least 53% of consumers choose a better experience over a better rewards program when forced to decide. That's a revealed preference, not a stated one — and it's the one that should be driving your loyalty investment. Make the app work. Make redemption effortless. Make the customer feel known. As evidenced by the power of customer recognition in the travel space, for instance, you don’t spur brand love and incrementality with points; you do so by recognizing the customer and making them feel special. These are the primary drivers of retention for the consumers most likely to switch and most likely to take others with them when they do. That also means measuring it; emotional resonance earns you a preference, and you can’t protect what you’re not tracking.
The Preference Economy won’t wait. Build accordingly. You are now marketing to two audiences simultaneously: your customer and your customer’s AI. Getting encoded as a preferred brand isn’t a soft win — it’s as strategic as acquisition and as critical as retention. The 42% who know they can set preferences but haven’t are highly addressable. They don’t need education; they need a reason and a moment. And the consumers who have already set preferences are just as important, because preferences aren’t permanent. If your brand isn’t actively earning its place in that consideration set, another one will.
Build for your customer, not the category average. Brands will lose customers if loyalty isn’t built around the specific friction points, motivations, and expectations of the consumers they’re trying to keep. Too many programs suffer from disconnected mechanics and misaligned incentives that don’t hold together across segments. The fix is consolidating your understanding of the consumer into a single view, making precision possible: the right engagement, the right moment, the right market. Generic program design gets generic results. In the Preference Economy, brands must earn a specific consumer’s preference, not a demographic average.
The underlying structure of the market is shifting. With AI, consumers are building a new intermediary layer between themselves and brands, and it’s already making recommendations, filtering messages, and encoding preferences for a growing share of your customers. The brands that earn their place in that layer will have a structural advantage that compounds over time. The ones that don’t won’t just fall behind — they’ll be filtered out.
Share On LinkedIn
GALE is a Business Agency.
We bring business strategy to brand storytelling to drive enterprise value.
Learn More
Rewards Attract, Experience Retains
Your Customer’s New Gatekeeper
No Standard Playbooks
Building for the New Era of Loyalty
Your brand is being filtered out. A seismic shift is fundamentally changing how consumers relate to loyalty, and most brands aren’t built for it.
More than half of AI users have already turned to an AI assistant to help them decide where to shop, what to buy, or which brand to use. And among all respondents, nearly 1 in 3 have gone a step further: deliberately opening an AI assistant — ChatGPT, Gemini, Copilot, and a growing field of others — and telling it which brands to favor above all others. It is a deliberate hardcoding of their preferences directly into the algorithms that will shape every future recommendation they receive. Brands that haven't been chosen won't just lose, they won't even be considered; removed from the equation before the decision-making process begins.
And consumers aren't stopping there. Fifty-six percent are now comfortable with AI filtering their brand communications entirely, actively inviting an algorithm to decide what's worth their attention. That means AI isn't just influencing decisions, it's becoming the filter between your brand and your customer.
have told an AI assistant to favor certain brands over others
Welcome to the Preference Economy.
Across 3,000 consumers surveyed in the United States and United Kingdom, one finding was unambiguous: “Preference Setters” are proliferating across every demographic and they’re not waiting to be marketed to. They’re engineering their own commercial reality, with a growth trajectory that makes the urgency clear: 24% of consumers say they'll be regularly setting AI brand preferences within the next year, and another 21% within a few years. Combined with a 30% "maybe" cohort, the realistic addressable market for AI-native loyalty is north of 70% within three years.
None of this emerged in a vacuum. The Preference Economy accelerates a problem that was already eroding the foundation of traditional loyalty: indifference. The average consumer is enrolled in four to six loyalty programs, but active participation varies. A meaningful cohort — disproportionately older, but present across every segment — doesn't engage with any of them. They’ve disappeared, operating as ghost members and illustrating that the brand never felt personal enough to matter.
Given this reality, the brands that will define the next era of loyalty will earn a place in their customers' preferences before the algorithm decides they're irrelevant. That window is open right now, but the data make it clear it won't be for long. The Preference Economy won’t reward hesitation.
Rewards
Attract, Experience
Retains
The data reveal a paradox sitting at the heart of modern loyalty marketing, and it’s costing brands more than they realize.
When we gave 3,000 consumers a choice between two companies — Company A, with better rewards but a clunky experience, or Company B, with worse rewards but a seamless one — 53% chose Company B. Only 24% chose Company A. They picked the brand with inferior rewards. And yet, when those same consumers were asked to design their ideal loyalty program, 40% ranked “generous rewards worth earning” as their #1 feature. This is the central paradox of loyalty marketing: Consumers want rewards, but, when forced to choose, they pick experience.
No cohort illustrates this more sharply than consumers aged 25–34. This group is the most intensely engaged loyalty segment, participating in more programs, more frequently, and more meaningfully than any other cohort. They are also the most likely to leave. Sixty-one percent have already abandoned a brand they were loyal to because a competitor offered a better experience, even when that competitor had a worse rewards program. And they’re not alone: 57% of 35–44-year-olds have done the same, making the 25–44 demographic collectively the most volatile audience. Part of what’s driving this is a generational relationship with time itself: 56% of 18–24-year-olds cite time savings as a primary driver of loyalty, a figure that declines almost perfectly linearly with age, dropping to just 19% among consumers aged 65 and older. For Gen Z and millennials, frictionless isn’t a feature; it’s an expectation. Nearly 3 in 10 would be relieved if rewards were replaced with better experiences entirely.
of 25-34 have abandoned a brand they were loyal to for a better experience
When consumers were asked what actually drives their loyalty, no single factor dominated. The quality of the experience topped the list, with rewards a close second, followed by trusting the brand, feeling like the brand knows them, believing in what the brand stands for, and feeling connected with others who share their interests or values. The experience-forward, AI-ready preference-economy consumer is a mid-career professional with disposable income, multiple AI apps, and zero tolerance for a clunky redemption interface.
This challenges a common assumption that the youngest consumers are leading the charge away from traditional rewards toward experience. The data show otherwise. Young adults (18-24) are actually the most rewards-loyal demographic. Recall that only 24% of all consumers chose Company A, the rewards-first option. Among 18–24-year-olds, that figure climbs to 39%, the highest of any age group. For this cohort, rewards still carry genuine pull. The shift is happening one rung up the life-stage ladder (ages 25-34), among consumers with more spending power, higher expectations, and less patience for friction. Yet even here, the paradox holds: That same 18–24 cohort — the most rewards-loyal by choice — is also the most likely to cite time savings (56%) as the reason they'd switch to a competitor with a worse rewards program. They value rewards until friction makes them not worth it.
The through-line across all of it is this: Rewards get consumers in the door, but experience determines whether they stay. Brands that treat those two things as separate work streams, optimizing one at the expense of the other, will keep losing their best customers to whoever figured out how to do both.
Your
Customer’sNew Gatekeeper
The desire for frictionless experience isn't just a preference, it's a catalyst. And nothing removes friction quite like AI. That dynamic is already playing out at scale: More than half of those surveyed have used AI for help with a shopping decision in the past three months alone. Among those, nearly a third say they trust the AI recommendations a lot, often acting on them directly. When looking at all survey respondents — not just AI users — 47% trust AI at least somewhat as a starting point for brand and product research, and 16% trust it enough to act on its purchase recommendations without further deliberation. The consumer hasn't abandoned decision-making, they've delegated it.
What makes this particularly significant is where AI sits in the consumer's world relative to other data-sharing touchpoints. Consumers are actually more comfortable with AI learning their brand preferences than they are with website cookies or social media tracking, which are channels brands have built entire strategies around. Nearly a quarter of respondents were completely comfortable with AI learning their preferences, compared to 20% for cookies and just 17% for social media. The permission base for the Preference Economy is larger than most brands assume. The obstacle isn't consumer discomfort, it's brand readiness.
That readiness gap becomes even more striking when you consider what consumers say they're willing to do. After being introduced to the concept, 62% said they would share their brand preferences directly with an AI assistant, and only 17% actively refused. When asked about concerns with sharing brand preferences with AI, the data reveal that resistance is far more generational than it is categorical. Privacy concerns are concentrated among older cohorts, with consumers aged 65+ over-indexing across nearly every concern category. Among 25–34-year-olds — the most loyalty-active, highest-switching, most AI-ready segment in the study — 27% have no concerns at all. And among the youngest consumers surveyed, the most common response wasn't hesitation or resistance; it was that they simply hadn't thought about it yet. That's an audience waiting for brands to invite them in.
are comfortable with AI managing their brand communications entirely
More than half of consumers (56%) are now comfortable with AI managing their brand communications entirely, deciding on their behalf what is worth their attention. Among 25–34- and 35–44-year-olds — consumers who we have already established are at the center of the Preference Economy — about 1 in 3 would actually prefer this. For brands, the implication is a fundamental shift in what loyalty actually needs to accomplish: the question is no longer whether you’re being considered but whether your customers are loyal enough to make sure you’re not getting filtered out.
These findings illustrate that the brands that haven’t been encoded as a preference won’t be rejected outright. They’ll simply be deprioritized, summarized, and eventually invisible. Though earning a customer’s genuine preference is still the goal, what’s new is that their preference now gets expressed somewhere it never did before: in the instructions they give their AI. That's only more reason to invest in building loyalty deliberately.
Underlying all of it is a more fundamental requirement: first-party data. Brands that haven’t built a rich, consolidated view of their customers will find personalization aspirational rather than operational. They won’t have the right information to meaningfully feed the AI systems increasingly making decisions on their customers’ behalf.
No
Standard
Playbooks
Even as the loyalty landscape shifts, the data make clear that what works in one industry won’t apply directly to another. This survey explored nuances across QSR, clothing & retail, travel, and financial services, and the strategic priorities shift in ways that matter. One truth holds across all of them: Brands that lean on generic playbooks without a clear strategic foundation will leave real value on the table. Below is a sampling of what the research reveals by category.
QSR
The loyalty opportunity isn't more rewards, it's fewer barriers to using them.
What it means for brands: Three priorities rose to the top when consumers described what would meaningfully improve their loyalty experience. More than half (53%) want rewards that don't expire. Nearly as many, 52%, want faster and easier ways to redeem them. And 40% want offers that are personalized to what they actually buy. For brands, that's a clear brief: Use data to surface the right offer at the right moment and make redemption so seamless it never becomes a reason to disengage.
CLOTHING & RETAIL
Consumers stay because the brand reflects who they are. But the biggest risk isn't losing core customers, it's never being found by new ones.
What it means for brands: Existing loyalists are habitual enough that they don't need AI to remind them, considering 37% of respondents shop at certain brands because they genuinely prefer them. But new consumers are using AI for discovery, which means brands that aren't optimizing for AI-driven discoverability are quietly losing the acquisition battle before it even begins. That means they need to think beyond traditional SEO and understand how their value proposition, reviews, and content are being interpreted by AI systems.
TRAVEL
Recognition is the highest-ROI loyalty intervention, but nearly a quarter of loyalty members have never experienced it.
What it means for brands: A front-desk agent who knows your name, an app that remembers your preferences, a service interaction that makes you feel like a person rather than a booking number. These moments outperform bonus points offers in driving lasting loyalty.
FINANCIAL SERVICES
Twelve percent stay simply because switching is hard. But with 50% having already switched or seriously considered it for a better experience, that barrier is more fragile than it looks.
What it means for brands: Passive retention is not a loyalty strategy. Earn genuine preference by getting rewards value, trust, and digital experience right, with an increasing emphasis on the latter as more of the relationship moves online.
Building for
the New Eraof Loyalty
The rules governing loyalty — how it’s built, how it’s lost, and how it’s maintained — are changing faster than most brand strategies can absorb. The brands that will win are the ones that understand the full picture of the modern consumers’ relationship to loyalty and build accordingly:
Investing in experience is a critical, immediate need. At least 53% of consumers choose a better experience over a better rewards program when forced to decide. That's a revealed preference, not a stated one — and it's the one that should be driving your loyalty investment. Make the app work. Make redemption effortless. Make the customer feel known. As evidenced by the power of customer recognition in the travel space, for instance, you don’t spur brand love and incrementality with points; you do so by recognizing the customer and making them feel special. These are the primary drivers of retention for the consumers most likely to switch and most likely to take others with them when they do. That also means measuring it; emotional resonance earns you a preference, and you can’t protect what you’re not tracking.
The Preference Economy won’t wait. Build accordingly. You are now marketing to two audiences simultaneously: your customer and your customer’s AI. Getting encoded as a preferred brand isn’t a soft win — it’s as strategic as acquisition and as critical as retention. The 42% who know they can set preferences but haven’t are highly addressable. They don’t need education; they need a reason and a moment. And the consumers who have already set preferences are just as important, because preferences aren’t permanent. If your brand isn’t actively earning its place in that consideration set, another one will.
Build for your customer, not the category average. Brands will lose customers if loyalty isn’t built around the specific friction points, motivations, and expectations of the consumers they’re trying to keep. Too many programs suffer from disconnected mechanics and misaligned incentives that don’t hold together across segments. The fix is consolidating your understanding of the consumer into a single view, making precision possible: the right engagement, the right moment, the right market. Generic program design gets generic results. In the Preference Economy, brands must earn a specific consumer’s preference, not a demographic average.
The underlying structure of the market is shifting. With AI, consumers are building a new intermediary layer between themselves and brands, and it’s already making recommendations, filtering messages, and encoding preferences for a growing share of your customers. The brands that earn their place in that layer will have a structural advantage that compounds over time. The ones that don’t won’t just fall behind — they’ll be filtered out.
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