As economic volatility pressures Australian households and digital technology reshapes how people shop, traditional loyalty models are facing unprecedented disruption.
To unpack what this means for businesses, Mandy Gallie, Head of Sales for Asia Pacific (Vice President) of Customer Acquisition and Engagement at Mastercard, and Rachel Stinear, General Manager – Partnerships & Events at the Australian Loyalty Association (ALA), share their insights on building authentic trust, leveraging AI, and delivering immediate value.
Rebuilding trust in an automated world
Economic uncertainty and rapid technological change have eroded traditional consumer confidence. While brands aren’t universally losing trust, their relationships with consumers are being tested as decision-making shifts from human interactions to AI algorithms and digital agents.
“I wouldn’t say that trust has eroded for brands universally, but they are being tested and will only be further tested in the future as much decision-making moves from direct human responsibilities to AI versions of ourselves and the equivalent in brand agents,” explains Mandy Gallie.
This evolution is giving rise to agentic commerce, where personal AI agents handle online search and purchasing on behalf of consumers. In this environment, trust extends beyond product selection to ensuring secure, reliable execution.
“The whole online purchase process is fundamentally changing with regard to search and purchase. However, the concept of customer journey mapping should continue as it has with regards to managing a customer through their life with a brand e.g. new customer, lapsed customer, loyal customer and so on. Offers, promotions, education, brand advocacy events and in-store shopping experiences will all continue, perhaps becoming even more important.
“However” adds Gallie, “much of the heavy lifting in managing these customer journeys, the actual offer, the communications, the tracing of results, creating more complex life cycle journey mapping, will be done by ‘marketing agents’ who will free the marketer up to focus on the brand’s strategic plans”.
3 Pillars for loyalty in the age of AI
As automation mediates more customer touchpoints, marketers and loyalty practitioners must adapt their digital infrastructure and engagement strategies. Gallie outlines three core priorities:
- Ensure API readiness: Businesses must make product catalogs and loyalty details easily readable for AI agents via fast APIs using JSON code. Incorporating loyalty perks, such as tier advancements or bonus cashback, directly into these data feeds gives brands a competitive edge when agents compare options.
- Leverage CRM to power search: While website traffic may shrink, digital personalisation remains vital. AI agents will tap into CRM profiles to find relevant products faster, drastically cutting search times for specific consumer segments.
- Focus on pre- and post-purchase experiences: With purchasing largely automated, ongoing customer engagement moves to the pre- and post-purchase stages. Ratings, referrals, gamification, and rich in-store experiences shape brand preference, ensuring the consumer’s agent prioritises the brand during future automated searches.
Balancing hyper-personalisation with data privacy
Delivering hyper-personalised experiences requires deep transactional insight, yet privacy concerns remain paramount. Gallie comments, “This is where loyalty programs should prove their weight in gold to a brand. That’s because data permissions from consumers are sought upfront as part of program terms and conditions”.
“We know from the research we commission with the Australian Loyalty Association each year that consumers are happy to give loyalty programs access to such data as long as it is used well. If you are bombarding consumers too much, then they will tell you as conversion rates will drop off. To test and understand where this balance lies, personalisation software is highly recommended”.
To protect sensitive information, the industry is moving toward data vaults. Instead of exposing raw data like birthdates to third parties, trusted vaults verify specific conditions via simple binary responses (e.g., verifying if a customer is over 18 without disclosing their exact age).
Overcoming cost-of-living pressures with Immediate Value
Data from the Australian Loyalty Association reveals that 52% of Australian households are under significant budget pressure, driving a fundamental shift away from traditional, long-term ‘spend-and-earn’ point loyalty schemes.
“Value has become the new currency of loyalty,” says Rachel Stinear. “When 52% of households feel genuine budget pressure, customers don’t want to wait months to see the benefit of loyalty, they want to feel it every time they engage. Points still matter, but they’re no longer enough on their own. Members increasingly expect benefits they can use immediately, whether that’s personalised offers, member pricing, instant savings at checkout or exclusive benefits that genuinely reduce the cost of living”.
Ultimately, according to Stinear, successful loyalty programs should build ongoing value through tailored perks, partner access, and elevated experiences, ensuring members feel recognised, not just rewarded. “The strongest loyalty programs are moving beyond simple transaction-based rewards and creating an ongoing value exchange. That might include personalised offers, flexible rewards, exclusive partner benefits, priority access, complimentary services or experiences that make members feel recognised rather than simply rewarded”.
To bridge the gap between rising consumer expectations and tighter operational margins, businesses must move away from generic discounts toward hyper-targeted rewards:
- Instant gratification: Programs like Everyday Rewards provide immediate, tangible relief through member pricing, weekly savings, and dynamic offers at checkout.
- Non-financial recognition: Models like MECCA Beauty Loop cultivate emotional loyalty through exclusive experiences, early product access, and curated sampling rather than heavy discounting.
The road ahead
The fundamental objective of loyalty remains unchanged, building a fair, long-term value exchange between a brand and its customers. However, as autonomous agents, dynamic personalisation, and cost-of-living constraints redefine retail, the winning programs will be those that pair secure technological infrastructure with immediate, hyper-relevant value.
