Consumer loyalty in 2025—why data transparency matters more than discounts

The word “reckoning” has reverberated through retail circles for decades. In the late ’90s, the rise of e-commerce threatened brick-and-mortar stores, with Amazon’s emergence in 1994 considered a watershed moment. In 2020, the COVID pandemic turned the industry on its head. As the New Year celebrations subside, a new challenge looms—namely, consumers’ shifting expectations. For years, the relationship between retailers and consumers has been a well-trodden path. In exchange for nominal discounts, consumers willingly shared basic personal information—date of birth, email addresses, phone numbers. Retailers called it loyalty, and consumers saw it as a logical trade. But this transactional status quo is a relic of the past. Commerce and retail media players accustomed to balancing the customer experience with the advertiser experience find themselves at a critical juncture. Stricter regulations, coupled with growing consumer awareness, mean customer experience must now be prioritized in service of the advertiser experience. No matter how much revenue media networks are currently generating, in reality, this is a drop in the ocean compared to the overall revenue risk of a lost customer. NextGen Marketing Summit Join us for a crash course on Gen Z, DTC marketing and the creator economy Register today As calls for accountability grow louder, it’s clear the “deals-for-data” model is nearing redundancy. Continued access to consumers’ personal information hinges on retailers’ ability to innovate and rethink how they deliver value–both to consumers and advertisers. To Taylor Swift, this isn’t something that retailers can simply shake off. What are customers in the market for? Retail media networks and advertising revenue have long thrived in the marketplace of consumer data. According to PwC, retailers that collect and effectively leverage this information can experience an uplift in contribution margins of up to 5%. Historically, obtaining this data was a straightforward exercise, thanks to passive opt-ins and low consumer awareness. However, the bar for consent has risen considerably in recent years. Across the pond, new regulations such as the EU’s GDPR have improved data collection standards. While the California Consumer Privacy Act represents a step in the right direction, much of the U.S. remains a data “Wild West.” We continuously hear players say, "Permissibility won’t be a problem” which sounds like a problem. To complicate matters further, opting out has become easier than ever, evidenced by the fact that almost 60% of U.S. consumers regularly opt out of mailing lists. So, while it may be easy to get customers to opt in via a multipage updated terms scroll, with one wrong move it’s even easier for them to opt out. A quarter of global consumers unsubscribe from digital marketing comms every week. No longer can retailers rely on 10% discounts to reel in first-time customers and secure their everlasting loyalty. This year marks a turning point in the consumer-retailer relationship. Consumers demand respect and are not afraid to challenge brands before sharing their personal information. As they become increasingly savvy about how their data is used, the effectiveness of irrelevant email bombardments dwindles. Personalization closes the deal Time is consumers’ most valuable resource. If retailers want to earn their loyalty and their data, they must prioritize delivering seamless, personalized experiences. The key to unlocking trust starts with minimizing friction and creating genuine value—be it through enhanced convenience or relevance. Consider significant, infrequent investments such as redecorating a home or outfitting a nursery. Consumers in these scenarios often lack the necessary information to make fully informed decisions. This opens the door for retailers to shift the focus of the experience from simply selling a product to providing an educational and meaningful experience. By staying in touch long-term, retailers can prolong that relationship with consumers: A home renovation retailer could make an educated guess about the products required for the next stage of the project. Even in today’s digital-first world, retailers would be wise to remember the power of the sales associate—especially when their capabilities are augmented by technology. A beauty aisle can go from intimidating to a VIP experience. Take Sephora, with its status as a personalization icon cemented by enabling consumers to seamlessly navigate between physical and digital experiences. Gen Z Career Forum Get practical advice on launching your career and excelling in the industry Register today Sephora’s in-store advisors use a “clienteling” app (essentially a CRM system) to view customers’ historical interactions, including browsing habits and pre-selected skin tone. This is the brand’s way of redefining the value exchange, as it streamlines the online-to-store experience while consistently recommending products perfectly tailored to the individual’s needs. Restocking the (strategy) shelves For retailers, the challenge ahead lies in striking the right balance with their communications. Tomorrow there will be even more places to get increasingly competitive deals (Rakuten, Honey, your bank, your payment apps and more). No retailer wants that to be their primary reason for loyalty. Instead, they want to define value that is ownable to your brand: trusted advice, ease of experience, anticipatory recommendations, a bit of fun—there are plenty of options beyond 10% off for your creative palate to make yours. Inundate consumers with too many messages and the drop-off rate increases. Too few messages and your brand risks fading into obscurity. This is where transparency becomes the ultimate differentiator in building trust. Empower your consumers; allow their unique preferences to dictate how often you communicate with them, and via which channel. A 2022 study found that 83% of UK consumers want to choose if they receive comms via email or direct mail. However, transparency isn’t just about providing sufficient choice. This is part of a wider educational process that requires clarity about what the data exchange means for both parties. Retailers shouldn’t be afraid of spelling out the basics—how they’re going to use data, and how long they’re going to keep it. More importantly, there shouldn’t be any issues in justifying why the relationship should extend beyond the initial moment of purchase. Looking to the future, retailers should remember one fundamental truth: Success is no longer reserved for those stocking the best products. It’s the businesses that regularly deliver moments that surprise and delight that are best placed to transform consumers from window shoppers to brand stalwarts. Read Ad Age’s Best of 2024 stories here

Consumer loyalty in 2025—why data transparency matters more than discounts

Featured Stories