Loyalty pricing is a growing trend, with retailers like Tesco and Boots leading the way in offering personalised discounts to loyalty cardholders.

According to the Competition and Markets Authority (CMA), loyalty-only prices accounted for nearly a quarter of all UK supermarket sales last year, worth over £5 billion.

According to the CMA, loyalty pricing isn’t a rip off and. It concluded these schemes offer genuine savings for consumers.

Loyalty pricing isn’t the same as dynamic pricing. Loyalty prices are generally targeted to individual customers (especially online), whereas dynamic pricing refers to price changes based on supply and demand.

Loyalty pricing is a massive benefit to consumers, as they get deals on products that are relevant to them. What’s not to like?

For loyalty programmes to be effective, they must be accessible to everyone, including those who may not have a smartphone or want to use an app.

Loyalty pricing can be used to drive traffic customers to a store (e.g. member offers on Baileys at Christmas) or to cross sell them products they wouldn’t normally buy.

Many loyalty prices are supplier funded, meaning that brands pay retailers to put their products on promotion for specific customers, in exchange for data.

Loyalty pricing is a win-win(-win). It helps suppliers gain new customers; allows retailers to capture more of a customer’s spending, and gives consumers better value.

The future of loyalty is likely to be dominated by personalised, supplier-funded offers that are tailored to an individual’s shopping habits.