Retailers in Australia, New Zealand, and the wider Asia-Pacific region are at a pivotal moment in how they engage with customers. Loyalty programs – which have been increasingly powerful components of marketing strategies – are quickly becoming retail’s most powerful engine for customer engagement and business growth.
In 2024 the trend was clear: shoppers were demanding more convenience, value, immediacy and recognition beyond the traditional loyalty proposition of points linked to overall spend. In 2025, these expectations have not slowed down. We continue to witness a shift towards more personalised experiences that recognise and reward individual shopping behaviour, while leveraging sophisticated technology, data, and AI to do so.
With new waves of rapid technology changes and fresh economic and political pressures, the trends outlined in this article are generally optimistic. How are these trends re-imagining the retail loyalty space?
AI, Personalisation and Retail Media
There’s no denying that AI has shaken up the retail space. After years of discussion around its potential, retailers can now measure returns on AI investments. In fact, retailers in Europe like Tesco and Carrefour are already there, using predictive AI to enhance personalised marketing.
Early adopters have shown that AI can process vast amounts of customer data to predict shopping patterns, automate personalised offers, and create more engaging shopping experiences. Having said that, execution is critical, as even great data is ineffective without actionable strategies.
Retailers are not only moving from pilot programs to scaling personalisation to all customers, but are also focused on improving first-party data collection, data quality and how well that data flows through the organisation.
There is, however, one key obstacle in the way of collecting high-quality data and engaging new customers on digital channels. Currently, most retailers only connect with a small fraction of their customer base through apps and websites. If only one-in-20 customers are on the app, most customers are in the dark about the benefits of a powerful, personalised reward program, and retailers are missing a lot of potential to enrich the models driving those programs.
This digital engagement challenge represents a significant opportunity in the retail media space. Retail media is playing a key role in recruiting shoppers into digital loyalty programs. Furthermore, PwC estimates that the retail media category in Australia will hit $2.6 billion by 2026, driven by retailers who successfully connect their loyalty programs with media networks to create more personal shopping experiences.
One example of success in this area is Woolworths’ Disney Worlds of Wonder collector card campaign, which effectively bridged online and in-store experiences through targeted data use.
Cost of Living, Coalition Comeback and Build vs Buy Loyalty Solutions
Cost-of-living pressures continue to affect consumer behaviour, and retailers are adapting their loyalty strategies. According to McKinsey, more than 60 percent of APAC consumers say the primary motivation for switching brands or retailers is the pursuit of better value.
This focus on value is driving innovation in program design, particularly in the APAC region where coalition loyalty programs are expected to be reimagined and make a comeback. These multi-brand programs, enhanced by modern technology, offer customers more ways to earn and use rewards while helping retailers share costs and data insights.
The model was shaken across ANZ in 2024 when it was announced that Flybuys New Zealand would close. The pure-play loyalty provider attributed the closure partly due to the underlying technologies now being so readily available that businesses can easily develop their own proprietary loyalty programs.
Whether companies build their own solution in-house or outsource development to a third party is another hot debate. The right choice will depend on the scale and infrastructure of a company. However, many are seeing the value in buying a loyalty platform from an expert, loyalty-focused specialist platform.
Seven Key Loyalty Trends in ANZ
As we approach the halfway mark of 2025, let’s revisit the trends forecast at the end of last year and see how they are shaping the loyalty and retail landscape:
- 2025 marked the year early adopters began measuring the ROI of their AI investments.
- More retailers moved from AI-driven personalisation pilots to fully scaled programs for all customers.
- Retailers boosted digital loyalty sign-ups in physical stores through staff incentives, sign-up bonuses, and retail media.
- Retail media saw significant growth, with retailers leveraging it to connect digital loyalty programs and drive in-store personalisation.
- Retailers adapted loyalty strategies to cost-of-living pressures by delivering value-driven promotions and recommendations.
- Reimagined coalition loyalty programs began re-emerging across the Asia-Pacific region.
- The build vs buy debate continued, with expert loyalty platform developers securing deals with major brands.
For retailers across Australia and New Zealand, the path forward is clear. Success will depend on their ability to harness data, personalisation and AI while addressing the digital engagement gap.
Those who can deliver value through targeted offers, embrace retail media opportunities and build flexible loyalty programs will be best positioned to turn customer engagement into sustainable growth in the years ahead.
This is an adapted article from Eagle Eye’s eBook, Loyalty’s Next Chapter: The Forces Reshaping Retail in 2025. Check out the full publication by clicking this link.
