Hyper-personalisation: The Holy Grail for loyalty programmes

The Trend	The Value	The Method	The Result
AI-driven data analysis enables highly personalised loyalty rewards.	64% of 18-24yo’s say personalised rewards are important.	Collect data via loyalty apps and promotions.	Improve trust and transparency.
Named “the Holy Grail” of advanced analytics in loyalty schemes, by EY.	71% expect brands to personalise the experience.	Analyse shopper behaviour and broader trends.	Strengthen customer connection.
	76% feel frustrated when this does not happen.	Offer personal prices, rewards and recommendations.	Drive lasting loyalty among younger consumers.

There’s no doubt that 2026 is the year of personalised loyalty. Already in recent months, we have looked at the emergence of Generation Z as a dominant demographic in UK retail.

Familiar with smartphones since birth, Gen Z spend confidently on luxuries and are heavily influenced by loyalty pricing, creating opportunities to drive sales by providing them with personalised perks.

Data-driven personalisation is made possible by intelligent platforms like Lodestone, MRM’s promotion management solution, which integrates customer information from loyalty apps, promos, prize draws and more.

How many people use loyalty apps?

The 2025 EY Loyalty Market Study found that over 80% of consumers of all ages were happy to install loyalty apps on their phone – and some engaged with those apps on a daily basis.[1]

Crucially, the study also found that consumers aged 18-24 – right at the heart of Gen Z – are most likely to consider personalised rewards “moderately to very important” (64% vs. 49% of all age groups).[2]

What is hyper-personalisation?

Hyper-personalisation uses technologies like AI to offer highly personalised customer experiences, based on analysis of the individual customer’s preferences and past behaviour.[3]

According to the EY report, this is “the Holy Grail” for companies who want to use advanced analytics to improve their personalised offers, as a way to drive better success in loyalty schemes.

EY added: “The ability to deliver the right reward to the right person through the right channel is more crucial than ever.”[4]

The next step towards hyper-personalised loyalty

In our article about data-driven discounting earlier this year, we saw how American Express found 83% of Gen Z shoppers want hyper-personalised loyalty rewards curated by AI.[5]

This echoes research by McKinsey, which found that three in four consumers switched products, stores or buying methods during the COVID-19 pandemic.[6]

“Personalisation matters more than ever, with COVID-19 and the surge in digital behaviours raising the bar,” McKinsey reported.[7]

Do shoppers expect personalised rewards?

Yes – and they’re frustrated when they don’t get the personalised experience they expect.

According to McKinsey:

71% of consumers expect personalised interactions with companies
76% of consumers are frustrated when that personalisation does not happen

The analyst declared AI-enabled personalisation “the next frontier of personalised marketing” and urged marketers to use analytics to identify and target microcommunities within their customer base.

“Brands and retailers can better connect with customers by using language that speaks to them and by providing communications that resonate and give consumers a reason to engage.”

– McKinsey Quarterly, 2025

Take the lead with loyalty programme hyper-personalisation

Hyper-personalisation is not just something consumers are looking for. It’s also something leading brands are offering to a far greater extent, as revealed in Capgemini Digital Transformation Institute’s Loyalty Deciphered report.[8]

Type of Personalisation	Leaders	Laggards	Gap
Product Recommendations	94%	65%	29%
Consumer’s Choice of Rewards	85%	54%	31%
Celebrating Landmark Moments	79%	48%	31%

The table above shows the extent of the gap, with around 30% more industry leaders offering personalised product picks, a choice of tailored loyalty rewards, or recognition of landmark events in the customer’s life.

Hyper-personalisation in ecommerce loyalty schemes

At the end of last year, we talked about how to incentivise loyalty in your ecommerce offering. Hyper-personalisation takes it to the next level, while catering for a generation that does not distinguish between digital and real-world retail, but sees them as parts of the same spectrum.

“As consumer expectations evolve, driven by technology, sustainability, and the demand for seamless, personal experiences, retailers must respond with agility and insight.

“The lines between digital and physical are disappearing, and the question is no longer whether to adopt AI, but how to deploy it strategically to unlock growth, adapt to thrive, and ultimately lead with purpose.”

– Capgemini, 2026 [9]

The time for early adoption is all but over. To avoid being left behind, bricks-and-mortar retailers and ecommerce operators alike should be looking to a platform like MRM’s Lodestone to seamlessly manage the wealth of customer data collected across loyalty schemes and promotional campaigns.

Why intelligent hyper-personalisation matters

The way you deliver hyper-personalisation can affect how it is perceived by your customers. In particular, you need to make sure that they feel comfortable with the degree to which you tailor their loyalty incentives.

A recent edition of the Advance Journal of Econometrics and Finance (AJEAF) featured a review of customer loyalty in online banking, which noted that “AI is emerging as a new construct that either dampens or amplifies the relationship between quality and loyalty”.[10]

The key factor is transparency, so that consumers understand why their experience has been personalised in terms of the benefits and not just for the sake of the technology.

Do people trust AI personalisation?

Consumer comfort with AI has fallen by 11% since 2024, according to research cited in the review.[11]

However, when delivered well, AI-powered personalisation can have the desired effect – as stated above, it’s all about transparency.

“When perceived as accurate and explainable, personalisation experiences have proven to boost trust, loyalty and perceived value; when perceived as inexplicable and intrusive, this has the opposite effect.

“The discovery of this important boundary condition – namely that personalisation does not automatically lead to loyalty, it depends on perceived transparency – is important.”

– AJEAF, 2026[12]

Putting hyper-personalisation together to boost loyalty

Remember EY’s three-step approach to finding the Holy Grail in AI-personalised loyalty programmes: The right reward to the right person through the right channel.[13]

EY said of 18 to 24-year-olds: “This age group is not merely interested in programmes that provide discounts and coupons; they are looking for deeper connections with brands they hold in high regard.”[14]

By providing meaningful interactions, underpinned by trust and transparency, you can secure lasting loyalty from Gen Z as they become the primary force in the UK retail economy.

Contact MRM today to discuss your loyalty programme, and how data collected via your app can help you to provide hyper-personalised perks to your most committed customers.