The seamless omnichannel loyalty experience is the holy grail of modern marketing, promising higher customer lifetime value, reduced acquisition costs, and stronger brand loyalty. According to McKinsey, around 60 to 70 percent of consumers research and shop both in stores and online. Yet, many retail companies still struggle to become truly 'omnichannel-ready.'Â
Most loyalty programs still operate in silos, unable to recognize their most valuable customers across mobile apps, websites, and physical stores. Given that shopping is expected to become fully 'phygital'âa seamlessly interconnected physical and digital experienceâretailers are in a race to keep up.
This disconnect isn't just a missed opportunity â it's actively driving away customers who expect their points, rewards, and status to follow them seamlessly across every brand touchpoint.Â
So, how can retailers bridge this critical gap between customer expectations and operational reality while building a truly connected loyalty program that works everywhere their customers are?
One of the biggest frustrations for customers is when digital loyalty programs donât sync with in-store purchases, or when you call customer service and they donât have the latest updates to help you. It really highlights how far behind some retailers are in meeting customer expectations.
A perfect example is when you sign up for a brand's newsletter and get promised a discount, but then realize itâs only valid for online purchases and not in-store. Itâs such a clear sign that many organizations still havenât fully embraced omnichannel strategies.Â
âĹukasz SĹoniewski, CEO at Omnivy, on the webinar "Retail loyalty program unlock the potential of omnichannel experience."Â
He points out that only a fraction of companies have successfully implemented an effective omnichannel experience, leaving the majority stuck in a multi-channel model where different channels remain siloed.
These everyday frustrations highlight a broader retailer omnichannel loyalty challenge: while customers effortlessly switch between channels, most loyalty programs still operate in isolation. This disconnect represents more than just missed opportunities â effective omnichannel loyalty programs go beyond offering a polished customer experience.
âModern loyalty programs serve as the backbone of customer-centric retail strategy. They act as a powerful engine for collecting and unifying customer data across all touchpoints, from in-store visits to mobile app interactions.Â
ââThis comprehensive view enables retailers to deliver personalized experiences that feel natural and consistent, regardless of where the interaction takes place.
âĹukasz SĹoniewskiÂ
Omnichannel loyalty programs become central hubs for promotional strategies and customer engagement. They serve dual roles: centralizing promotional logic across all marketing channels while actively encouraging customers to engage with the brand through multiple touchpoints.Â
This organic connection creates a cycle where deeper customer engagement leads to valuable data and insights, enabling even more personalized experience.
Traditional and omnichannel loyalty programs represent two distinct approaches to customer retention and engagement, each reflecting the technological and consumer behavior landscapes of their respective eras.
Traditional loyalty programs operate through a straightforward, single-channel approach, typically employing basic point collection systems and offer generic rewards that aren't tailored to individual customers. The limited scope of these programs results in minimal data collection and restricted customer insights, with rewards typically only redeemable within the single environment.
Omnichannel loyalty programs have evolved to meet the demands of today's interconnected consumer landscape. They create an integrated experience across multiple touchpoints, including in-store, online, mobile apps, and social media platforms. Rather than relying on physical cards, they utilize digital loyalty cards and sophisticated apps that track customer interactions across all sales channels.Â
Traditional loyalty programs, while simple to implement and understand, create a fragmented experience limited primarily to single-channel interactions. They generate basic transactional data but offer limited valuable insights into customer behavior and preferences. Omnichannel programs, however, create a seamless experience across all customer touchpoints, enabling customers to earn and redeem rewards through whatever channel they prefer. This flexibility aligns with modern consumer expectations for convenience and accessibility.
From a business perspective, omnichannel loyalty programs typically drive higher engagement and customer lifetime value compared to traditional single-channel programs. The ability to collect and analyze comprehensive customer data enables businesses to make more informed decisions about product offerings, marketing strategies, and customer engagement initiatives.Â
An omnichannel strategy offers significant benefits for both customers and companies in retail, ultimately leading to improved user experiences (UX) that translate into higher return on investment (ROI).Â
Increased convenience
Omnichannel loyalty programs streamline the customer journey, allowing users to transition seamlessly between online and offline channels. Well-executed omnichannel means customers can start shopping on one platform (e.g., browsing a mobile app) and continue or complete their purchase in-store, significantly enhancing convenience and reducing friction.
âConsistent recognition
Customers are recognized as loyalty program members across multiple channels, ensuring that their status and benefits are consistently available, whether they shop online or in-store.Â
âPersonalized experience
Omnichannel retail loyalty programs leverage customer data to provide personalized experiences. When retailers tailor offers based on past customer behaviors and preferences, customers are more likely to engage further.Â
âEnhanced revenue growth
Providing multiple touchpoints increases the likelihood of purchases as customers have more options for completing transactions.
âImproved customer loyalty
A well-executed omnichannel loyalty program fosters stronger customer loyalty. When customers receive a seamless omnichannel experienceâwhere offers and tailored rewards are accessible across all platformsâthey are more likely to return and recommend the brand to others.
âData-driven insights
Omnichannel loyalty programs facilitate the collection of high-quality data across various channels, enabling companies to make informed decisions regarding marketing strategies and product offerings. This comprehensive understanding of customer behavior enhances operational efficiency and effectiveness.
âCentralized promotional strategies
Implementing a unified loyalty engine allows companies to centralize their promotional strategies across all channels. This concentration reduces inconsistencies in offers and ensures that all teams operate under the same guidelines.
âCost efficiency
By consolidating promotional efforts through a single loyalty system, companies can reduce the time required to set up campaigns â from weeks to days â while also minimizing errors associated with managing multiple systems.
Implementing a comprehensive omnichannel strategy requires significant investments in technology, data integration, and organizational alignment, which can be challenging for many companies. Here are the most common challenges companies face when implementing omnichannel loyalty programs in retail.
Retailers often have separate teams for each channel (e.g., in-store, e-commerce, mobile), each with its own KPIs and goals.
This structure can undermine the development of a cohesive omnichannel strategy. With multiple teams collecting and using customer data, confusion frequently arises over which department owns and manages this information, leading to inconsistent messaging.
Many retailers, especially those with a long history of physical stores, have outdated point-of-sale systems that are difficult to integrate with newer digital platforms. These legacy systems rely on rigid monolithic architecture and donât communicate well with modern systems, which are often microservices-based and interact through APIs.Â
To address these challenges, adopting a modern, flexible, API-first, and headless loyalty engine can help retailers seamlessly bridge the gap, allowing for easy integration with existing systems and enabling a smoother, more personalized shopping experience across both physical and digital channels.
While many retailers struggle to provide seamless omnichannel loyalty experiences, leading brands recognize that the importance of robust omnichannel loyalty programs has never been greater, and the investment in best-of-breed loyalty solutions is fully justified.Â
Here we explore the top five omnichannel retail loyalty programs that excel in delivering cohesive, rewarding experiences for their customers, showcasing the innovative strategies and technologies that make them stand out in a competitive market.
Sephora's loyalty allows members to initiate their shopping journey online and effortlessly continue it in-store. Their loyalty status is recognized across all platforms, ensuring a consistent experience regardless of where customers shop.Â
The program effectively harnesses social media to foster a vibrant community around their products, enhancing customer engagement.
Sephora employs augmented reality for online product trials and offers in-store mobile scanning for product reviews and community opinions, creating a cohesive shopping experience.Â
Members enjoy flexible options for using their points, including charitable donations, which further enriches their engagement across both digital and physical channels.
The program covers the following channels:
Read more: Sephora's Beauty Insider: The gold standard in loyalty programs.
Starbucks Rewards exemplifies an omnichannel loyalty program that harmonizes digital and in-store experiences seamlessly. Members can earn and redeem "Stars" through purchases made via the mobile app, website, social media or in-store, ensuring a consistent experience across all platforms.Â
The program offers personalized rewards, such as free drinks and exclusive discounts, that encourage customers to make repeat visits.
The Starbucks mobile app enhances this omnichannel experience by allowing customers to order ahead, pay seamlessly, and track their rewards in real-time.Â
With gamification elements like Bonus Star Challenges and Double Star Days integrated into the app, customers remain engaged across both digital and physical touchpoints, driving loyalty and frequent visits.
âStarbucks' omnichannel loyalty program covers the following key channels:
Read more:Â Inside the Starbucks Rewards program: A complete diagnosis.
Target's Circle loyalty program is a prime example of an omnichannel loyalty program that enhances customer engagement across multiple marketing channels.Â
Members earn 1% back on every purchase, whether shopping online (through the website or mobile app) or in-store (curbside pickup included), creating a unified rewards system. The program integrates seamlessly with Target's mobile app, where users can access personalized deals tailored to their customer behavior.
By connecting digital offers with physical shopping experiences, Target ensures that customers enjoy a cohesive journey across all platforms.Â
Exclusive benefits like early access to sales and birthday rewards further enhance customer satisfaction, driving customer retention and satisfaction.
âThe program covers the following channels:
â
Costa Coffee's loyalty program bridges digital and physical interactions. Customers can effortlessly initiate coffee orders through the app while on the go, saving time during busy hours.Â
The app provides access to order history and favorite drinks and tailors personalized loyalty benefits based on previous customer engagement.
With the ability to apply rewards and pay directly through the app, customers can simply pick up their orders in-store, bypassing long queues entirely.Â
Integrating digital convenience with physical store efficiency creates a streamlined and time-saving experience for loyal customers, enhancing their overall satisfaction.
âThe program covers the following channels:
Read more: Coffee loyalty programs: 10 successful examples.
The North Face's XPLR Pass showcases an innovative omnichannel loyalty program that rewards members for both purchases and non-purchase activities across various platforms.Â
Customers earn points not only by shopping but also by exploring national parks or referring friends, creating a holistic engagement strategy.
The mobile app enhances this omnichannel experience by allowing members to check in at parks to collect points while also providing personalized gear recommendations based on their activities.Â
Members enjoy exclusive access to sales and limited edition products, reinforcing the connection between digital engagement and in-store benefits, ultimately fostering a strong sense of community among loyal customers.
âThe key channels covered by the program include:
Delivering a seamless omnichannel loyalty experiences is no longer optionalâitâs essential. Retailers must rise to the challenge of unifying loyalty programs across digital and physical channels to ensure that customers feel recognized and rewarded wherever they engage with the brand.
Disconnected channels, whether due to unsynced rewards or inconsistent promotional strategies, not only frustrate customers but also leave significant value untapped. For retailers aiming to bridge the gap between customer expectations and operational reality, the path forward is clear.Â
By adopting modern, API-first loyalty engines and implementing key strategiesâsuch as seamless data collection, unified promotions, and personalized experiencesâretailers can unlock the full potential of omnichannel loyalty strategies and position themselves for long-term success in an increasingly connected world.
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