A Practical Guide To Retail Loyalty Programs

In the rapidly evolving retail landscape, loyalty programmes have shifted from optional perks to strategic cornerstones of customer-engagement and retention. Today, more than 90 % of consumers belong to at least one loyalty programme, and members of these programmes generate 12-18 % more revenue annually compared to non-members. Meanwhile the global loyalty-programme market is projected to hit approximately US $93.8 billion in 2025, growing at an annual rate of about 15.9 % and set to reach US $155.2 billion by 2029. (Research and Markets)

According to McKinsey, loyalty members are 60% more likely to choose a brand over competitors and 70% more likely to recommend it, making loyalty a decisive edge in an increasingly crowded marketplace.

In this blog, we’ll first explore the Top 10 Retail Loyalty Programs that are setting the global standard, from Starbucks Rewards and Sephora Beauty Insider to Nike Membership and Amazon Prime. Each of these programs demonstrates how creativity, personalization, and technology can turn casual shoppers into brand advocates.

Key takeaways

Quick comparison between top 10 retail loyalty programs in the world:

Top 10 retail loyalty programs

1. Starbucks Rewards

Frequently cited as one of the most successful loyalty programs, Starbucks Rewards drives roughly half of all spending in U.S. Starbucks stores. Members can earn points (“Stars”) with each purchase to redeem for free food and drinks. The program is deeply integrated into a mobile app, which streamlines mobile ordering and payment.

Key features:

• Mobile-centric design: The app allows for seamless ordering, payment, and tracking of rewards.
• Gamified engagement: Offers bonus Star challenges and personalized promotions to encourage frequent visits.
• Strategic partnerships: Allows members to earn extra Stars through partners like Marriott Bonvoy and Bank of America.

The Starbucks Rewards program is a highly successful model that drives customer frequency and spend.

• Over 75 million members globally.
• 57% of U.S. sales from loyalty members.
• Members spend 3x more per visit than non-members.
• Over $22 billion loaded onto Starbucks Cards and app.

(Source: Coffee Dasher)

Why it works: Its seamless, app-based experience and frequent engagement opportunities make earning rewards simple and satisfying for daily customers.

2. Sephora Beauty Insider

A tiered, points-based program, Sephora’s Beauty Insider boasts over 34 million members. Customers earn points for every dollar spent, which can be exchanged for product samples, exclusive experiences, and discounts. The program is credited with helping the retailer achieve 80% of its total sales from members.

Key features:

• Tiered rewards: Higher tiers offer bigger discounts, exclusive event invitations, and first access to new products.
• Personalization: Uses data to offer personalized perks, birthday gifts, and a “Rewards Bazaar”.

Sephora’s tiered program excels by focusing on emotional connection and community building, leading to high-value transactions.

• 80% of total sales come from loyalty members.
• 25% year-over-year revenue growth for LVMH’s retail division in 2023.
• High repeat-purchase rate among top-tier members.

(Source: SimiCart)

Why it works: The aspirational tiered structure motivates customers to spend more, while the diverse reward options appeal to beauty lovers.

3. Amazon Prime

A leading example of a paid loyalty program, Amazon Prime provides high-value benefits for its annual or monthly fee, including free and fast shipping, exclusive deals, and access to a vast library of streaming content. Its massive subscriber base makes it a top-tier loyalty program.

Key features:

• Bundled benefits: Includes access to Prime Video, Prime Music, exclusive deals, and other perks.
• Increased engagement: The annual fee incentivizes customers to shop on Amazon to maximize their investment.

Results:

• Over 200 million members globally.
• 185 million in the U.S. alone.
• Prime members spend $1,400 annually on average, compared to $600 for non-members.
• Prime Day 2024 generated $12.9 billion in sales.

(Source: Loyalty Live)

Why it works: The high perceived value of its bundled services encourages consistent engagement and reinforces customer loyalty.

4. Target Circle

Target’s free loyalty program offers personalized deals, member-exclusive sales, and a 1% earnings reward on every purchase. Members can also direct votes to local nonprofit organizations, aligning their shopping with community support.

Key features: 

• Free and easy to join.
• Personalized offers through app integration.
• Community engagement via nonprofit voting.

Results:

• In 2024, the program added 13 million new members, bringing the total to over 110 million members.
• During Q4 2024, over 25% growth in Same-Day Delivery (powered by Target Circle 360) was reported.
• Higher frequency and average order value among members.

(Source: Target Circle)

Why it works: It provides immediate, effortless savings for all members, with an upgraded option for their most loyal and high-spending customers.

5. Nike (NikePlus)

With over 100 million members, Nike’s loyalty program provides special access to exclusive products, expert advice, and unique experiences. The program helps drive member spending, with members reportedly spending three times more than non-members.

Key features:

• Exclusive access: Offers member-only products (“drops”), free shipping, and special offers.
• Community apps: Integrates with apps like SNKRS, Nike Run Club, and Nike Training Club to build community.

Results:

• Membership base: over 100 million members globally.
• Members who shop via Nike’s mobile apps spend about 3× more than non-members (or “guests”).
• NikePlus membership is central to Nike’s direct-to-consumer growth strategy, having contributed to a 35% growth in digital revenue in one year (per one source) as part of this strategy.

(Source: CDO Trends)

Why it works: It builds a powerful emotional connection by making members feel like part of a sports and fitness community, not just a customer base.

6. Adidas (adiClub)

The adiClub loyalty program is designed to reward members for interacting with the brand. Members earn points by purchasing items, participating in events, or using Adidas apps, which can be redeemed for exclusive promotions and products. Reports indicate that members buy 50% more often than non-members.

Key features:

• Multi-tier rewards system.
• Exclusive access to events and early product releases.
• Fitness-driven engagement through Adidas Running and Training apps.

Results:

• Direct consumer relationship: The program has been instrumental in building direct relationships with consumers, with the adiClub membership established in about 50 countries.
• Increased purchase frequency: Members are reported to buy 50% more often than non-members.
• Increased customer lifetime value: Members have a customer lifetime value that is two times higher than regular consumers.
• Revenue impact: The program contributed to a net sales increase of almost €3 million in one year.

(Source: Open Loyalty)

Why it works: It connects lifestyle and brand experience, rewarding every form of engagement, not just purchases.

7. IKEA Family

This is a free, value-based program with over 150 million global members. Benefits include special member prices on items, a free coffee or tea in many countries, and access to special in-store events and workshops.

Key features:

• Members-only pricing and discounts.
• Free coffee or tea at IKEA restaurants.
• Invitations to workshops and special events.

Results:

• Over 150 million members worldwide.
• Loyalty members drive 50% of IKEA’s global sales.
• 25% higher visit frequency among members.
• 30% larger basket size compared to non-members.

(Source: Loyalty Point)

Why it works: It makes customers feel part of the IKEA community while rewarding them with practical, everyday value.

8. My Bath & Body Works Rewards

This personal care retailer has created a successful, emotionally resonant loyalty program with a generous point system.

Key features:

• High point-to-dollar ratio for faster rewards
• Exclusive sales access and personalized offers
• Birthday gifts and limited-edition product previews

Results:

• Membership growth: 111.4 million members, 80% population coverage.
• Rapid growth: 500 billion points in 11 months.
• Members visit twice as often as casual shoppers.

(Source: Joy)

Why it works: Fast rewards and personalization make customers feel valued and emotionally attached to the brand.

9. H&M Membership

With a simple point system and strong digital integration, H&M’s program is a leading example of loyalty in fast fashion. It offers a comprehensive, digital-first experience that aligns with modern customer expectations.

Key features:

• Earn points for purchases and eco-friendly actions.
• Free shipping, early sale access, and birthday rewards.
• Sustainable fashion incentives like recycling programs.

Results:

• 120M+ global members.
• Repeat purchase rate increased by 28% among loyalty members.
• Over 20% of sales in some regions attributed to loyalty-driven incentives.

(Source: Joy)

Why it works: It aligns environmental consciousness with loyalty incentives, resonating with modern, eco-aware consumers.

10. Ulta Beauty Rewards

Similar to its competitor Sephora, Ulta’s program is a points-based system that allows members to accumulate rewards based on spending. Ulta offers frequent upgrades to the program to enhance the value proposition for its members.

Key features:

• Tiered status levels (Member, Platinum, Diamond).
• Points redeemable on any product or service.
• Frequent bonus events and early sale access.

Results: 

• Sales and revenue: The program drives more than 95% of the company’s total sales.
• Membership growth: The program has grown to over 44 million active members.
• Member spending: The highest-tier members, Diamond and Platinum, spend significantly more, with an average of $1,700 per person annually.
• Customer retention: The program demonstrates strong customer retention, especially among top-tier members.
• Increased transaction value: The program has contributed to an increase in both the number of transactions and the average order value.

(Source: Loyalty and Rewards Co)

Why it works: Its straightforward system is easy for customers to understand, and the high-value, flexible rewards drive repeat business.

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A Practical Guide to Building an Effective Retail Loyalty Program

Retailers don’t simply need to “catch the shopping craze” when customers return, they must build loyalty programs that reflect today’s customer behaviours, digital expectations and values.

Firstly, the retailer needs to know that how many types of Loyalty Programs can be applied to retail:

• Converting the spent amount to reward points for the customers: It is a conventional program that can be found in any retailer. The customers can use this reward point amount for exchanging goods or services of the retailer.
• Building the customer tier system: giving the better reward/endowment when the customers move up to higher tiers. That can stimulate the consumers to spend more money in order to upgrade their tiers and get more special offers.
• Combining with the third party loyalty program: allowing the customers to use the reward point for exchanging the goods or service of another retailer. This program helps the retailer can support each other to maintain customer loyalty.
• Providing the fee loyalty program: using e-commerce sites (like Amazon, Tiki, Lazada…) for providing free delivery times per month whenever a customer bought a customer package, that makes the customer feel they need to take the free offers which are brought by the package. Then they will keep buying more and more products on these e-commerce platforms.
• Bonuses for referring new customers: Connecting deeply with the consumers and their friends. It saves the cost of attracting new customers by the marketing tool, bringing this benefit to the current customers and increasing satisfaction.

To effectively implement the Retail Loyalty Programs, the enterprise has to build the Loyalty Programs and make the Loyalty Software, which was created on the Website and Mobile Platform. This blog introduces in more detail how to develop a Loyalty Mobile Application. Below is a list of 2 different common situations you may experience:

1. You don’t have any Loyalty Mobile Application

• Finding a suitable loyalty program to apply to is very essential. In addition, it must be based on your oriented development from your company resource.
• Choosing a reliable builder plays a vital role in building the Loyalty Mobile Application. Due to this platform has a complicated logic, and many business procedures must be maintained. Running a Loyalty Mobile App necessitates a high level of concentration and technical knowledge. The best approach is to seek advice from a software development company expert and carefully examine the product created by each builder in the preselected list.

Loyalty Mobile Application

• Developing the Loyalty Application Architecture. Typically, the builder would recommend it. On the other hand, it can be the fundamental solution in determining the loyalty programs you can use and which you cannot. In the survey stage, you may be asked to choose the flexible or inflexible method to develop your system. The flexible method means they will create the configuration form in your system and you can modify it anytime for changing the business process which is applied in your Loyalty Program. The inflexible method means they write the fixed condition in the code for categorizing your workflow. The rigid method is cheaper and takes less time than the flexible method. So using what method is based on your demand and the resources of your company.

2. You already have a Loyalty Mobile Application

• You need to analyze the existing data for identifying the next Loyalty Program you want to develop. Based on your current program running, you can use the data and Loyalty Application Architecture, then you must create a new feature. This leads to shorten the implementation cycle and work in tandem with the current software to improve its performance.
• Enhancing your Loyalty Application Architecture as much as possible. It is likely that the Loyalty Application Architecture you built in the past won’t work for the current approach. As a result, attempting to add more functionality to an existing framework could cause conflict or have a negative effect on device performance. Reviewing the whole structure and attempting to improve it will assist you in avoiding a business interruption.

Loyalty Application Architecture

• Developing the new function for implementing the new Loyalty Programs. In this stage, you must define the detailed program you want to develop. The owner of this new program has to visualize and forecast what function needs to be used by the delivery team and what business cases may happen. Careful preparation is useful to ensure your business is a smooth operation.
• Assessing the result and improving the Loyalty Mobile Application. In actual implementation, there are still certain new cases that cannot be anticipated and require your manual intervention to resolve. However, after overcoming them, you could gain more experience and know what are the mistakes and unfit logic so that you investigate and suggest the improvement solution for ensuring the identified cases won’t be repeated. This will catapult the growth of your business and retail loyalty programs into the future.

If retailers follow these practical strategies effectively, blending personalization, omnichannel experiences, and purpose-driven engagement, they can achieve the kind of customer loyalty seen in some of the world’s most successful brands. From global giants like Starbucks and Sephora to innovators such as Nike, Amazon, and H&M, the top retail loyalty programs show how smart design and technology can turn casual buyers into lifelong advocates.

Turning Loyalty into Long-Term Growth with Kyanon Digital

A well-crafted retail loyalty program isn’t just a marketing add-on, it’s a powerful growth engine that deepens customer relationships, increases repeat purchases, and builds brand advocacy. If executed strategically, your retail loyalty program can transform occasional buyers into lifelong advocates, fueling sustainable growth and keeping your brand top of mind in every shopping decision.

Ready to create a loyalty program that truly connects with your customers?

Explore the loyalty and rewards services at Kyanon Digital, a trusted digital transformation expert, to design and build a data-driven, customer-centric loyalty platform that delivers measurable business impact. Contact Kyanon Digital today to start your loyalty journey.