Customer loyalty and community marketplaces

In today’s world where attention is scarce and competition fierce, loyalty has become crucial. But for those who succeed, the rewards can be significant.

Successful marketing teams know that winning a customer is only the beginning – keeping them is essential. This has never been truer given Google, Meta and Amazon’s collective grasp of digital marketing and the impact they have on the cost of winning new customers. On top of this, AI and agentic search are creating further inflationary pressures, as brands compete for reduced search space.

This changing backdrop makes loyalty more important than ever. The loyalty segment is broad and fast-moving, spanning everything from consumer facing closed-user marketplaces to B2B SaaS and agentic platforms. Different models have a common goal: enabling brands and retailers to drive greater engagement, frequency of spend, and share of wallet.

“Loyalty and engagement will only grow in importance,” stresses Tom Pemberton, Partner at Inflexion, which has tracked the loyalty space for many years. “Rising acquisition costs, the need for first-party data, and the desire for deeper emotional connections create a compelling case for investment – particularly in the context of AI-native solutions proliferating.” This can be seen in the firm’s investments in Blue Light Card and Mecenat, closed-user marketplaces serving frontline workers and students respectively. Brands were seeking alternatives to the “black box” of traditional digital advertising, and these platforms provided a highly engaged community with strong attribution (see box).

 Old models of segmented generic groups just don't cut it anymore.

This is because attracting new customers is more difficult and expensive than ever. For this reason, Peter suggests creating an app-based transacting environment which allows brands to cut performance media costs (namely Google) out of the ecosystem for returning customers. “This allows valued customers to be rewarded and thanked without repeated acquisition costs.  Closed user groups where members join a club do this particularly well,” he says. He speaks from vast experience, with leadership roles spanning Moneysupermarket, Just Eat, Visa and Blue Light Card to name a few.

The loyalty and engagement market is supported by a number of structural factors. Rising customer acquisition costs are incentivising brands to focus more on retention. A consumer-led focus on data privacy is elevating the importance of first-party data, which loyalty programmes generate naturally in a transparent and mutually beneficial way. Loyalty is increasingly recognised as emotional as well as transactional: consumers want to feel part of a community, to see their values reflected, and to belong to something more than a transaction. Closed-user groups are well placed to meet this demand, and so should continue to command a growing share of marketing budgets. These groups also provide a channel that is not being disrupted today by AI search as the exclusive nature of deals and membership creates its own ecosystem. 

Loyalty models are also becoming more sophisticated. Consumers increasingly expect brands to understand their preferences and tailor offers. Advances in AI and predictive analytics are enabling this personalisation at scale, helping brands segment more effectively and deliver relevant rewards in real time. Gamification is playing a role too, with features such as tiering, challenges and badges enhancing engagement. The most successful programmes balance personalisation with transparency on data use, building trust as well as relevance.

Loyalty means more than just discounting. Cashback, points, exclusive access and experiential rewards all feature in efforts to boost engagement. The most effective schemes are those that remain relevant, differentiated and integrated into the wider customer experience. A key challenge is reward or loyalty programme fatigue: if every brand offers similar incentives, consumers may lose interest and switch off. Creativity and alignment with brand values are therefore essential.

Loyalty programmes must demonstrate measurable impact, with brands requiring clear evidence that initiatives drive incremental spend, repeat purchases or new customer acquisition. Community marketplaces stand out here, with their ability to provide robust attribution and ROI. Retail media has become a complementary tool where there is audience value and trust, enabling brands to reach customers in a contextually relevant way while benefiting from the data generated by loyalty platforms. “We expect this interplay between retail media and loyalty to expand significantly,” Jack says.

Loyalty strategies are shaped by market context. In the US, retail media is more mature, while Europe often leads in innovation around privacy and data. For brands looking to scale internationally, understanding and adapting to these geographical differences is crucial.