5 Practical Strategies for European Retail Loyalty Programs
Retail loyalty programs are everywhere, but many fall short of building real customer loyalty. That’s because they’re often designed around business KPIs, not how people actually think or feel. In reality, loyalty is emotional. To improve engagement and increase retention, retailers first need to understand the factors influencing consumer behavior. Here are 5 practical ways European retailers can apply behavioral science to create more engaging, effective loyalty programs, with local examples and expert insights to guide the way.
Why Loyalty Is Often More Emotional Than Logical
Customers don’t stick with brands simply because they’re the cheapest or most convenient. Loyalty is driven as much by emotion as by logic—and often more so.
As behavioral scientist Daniel Kahneman explains, most of our choices are made on autopilot—quickly, instinctively, without much analysis. That’s how loyalty works as well. We don’t overthink every shopping decision; we go with what feels right, familiar, or rewarding.
And yet, many retail loyalty programs are still built to serve business metrics—pushing spend, retention, or database growth—without truly considering what motivates people. And that means putting humans, not KPIs, at the center of your program. Understanding customer behavior and limitations, and creating opportunities that make the desired action easy to take.
How to do it? Below, you’ll find practical loyalty strategies on how to leverage psychology to boost customer engagement and drive better retention in retail.
5 Psychology-Based Tips To Bring To Your Loyalty Program
1. Build Loyalty on Trust and Transparency
Loyalty is similar to a friendship—it’s based on trust. When reward rules change without warning, promotions feel misleading, or the return policy suddenly shifts, that trust breaks. And once it’s broken, it’s hard to repair.
In retail, trust is not just about product quality, but also about consistent experiences, fair treatment, and clear communication. Shoppers want to feel the rules are fair, the value is real, and nothing is hiding in the fine print.
That sense of fairness is what keeps people coming back. A transparent program—one that’s easy to understand and doesn’t move the goalposts—builds confidence. And confident customers are loyal customers.
Real-World Example:
When Sephora updated its loyalty program, it communicated the changes in clear, phased updates that explained how the earn and reward mechanisms would evolve. By preparing customers and giving them time to adapt, the brand preserved trust, even while shifting core benefits.
Try This:
- Be upfront about program rules, especially expirations or tier downgrades.
- Offer signup perks that feel valuable, like free delivery or tier boosts.
- Reward customer reviews and feedback, not just purchases
2. Make Sure The Perceived Value is High
Customers don’t always go for the lowest price—they look for the best trade-off. That could be convenience, speed, service, shared values, or even how a purchase makes them feel. The key is to make them feel they’re getting more than they’re giving.
Loss aversion plays a major role here. According to the theory, we are more sensitive to losing something than to gaining something new. But be careful: once a benefit becomes expected, taking it away feels like a loss. Rather than relying on FOMO or removing rewards, focus on reinforcing value upfront and making it feel personal.
“FOMO aside, loss aversion is a powerful motivator—but only when tied to rewards customers truly value. It’s not about making them fear losing benefits, but about reinforcing how much they’ve already invested and what they’d miss by walking away.” —
Magdalena Pudełko, Business Development Manager at Comarch
Real-World Example:
IKEA Family is all about everyday value, offering its members perks such as member-only discounts on selected products, reduced prices on restaurant meals, and savings on delivery services. Add in an extra 15% value on furniture buyback, and members get the sense that they’re consistently getting more than they’re giving.
Try This:
- Replace expiring points with time-limited vouchers.
- Offer lifetime status or status matching for loyal, high-value customers.
- Avoid overusing scarcity tactics—first create value, then add in urgency.
3. Stay Consistent and Reliable Across Every Touchpoint
Loyalty doesn’t need fireworks; it needs reliability. When customers get the same great experience every time—whether they’re shopping online, in-store, or in-app—they begin to trust that the brand will deliver. That sense of consistency creates comfort, and in a world full of surprises, this is exactly what many people seek.
But when the experience feels fragmented or disjointed, it creates friction. Behavioral science calls this cognitive dissonance—the discomfort we feel when our expectations don’t match reality. And in loyalty programs, that’s a quick way to lose emotional connection.
“We seek consistent experiences across channels, online and offline. Yet customer service is often overlooked or over-automated. Meanwhile, it’s important to find balance. As the Klarna example shows, AI doesn’t deliver the same reliability that humans do. Make sure your customer service is seamlessly integrated into your loyalty program—customers will reach out more often than you think.”
Magdalena Pudełko, Business Development Manager at Comarch
Real-World Example:
Decathlon delivers a truly seamless loyalty experience across store, app, and email. When customers launch the app inside the store, it detects their location and highlights store-specific deals. With Scan & Pay, they can add items to their cart by scanning barcodes and check out directly in the app, skipping queues entirely. Members earn points not only for purchases, but also for product reviews and tracked workouts via Strava or Komoot, and enjoy 365-day returns regardless of where they shop.
Try This:
- Ensure consistency across all channels—both offline and online.
- Prioritize customer service and integrate it into your loyalty program.
- Don’t over-automate—balance automation with human support.
4. Reward More Than Just Spending
If you only reward purchases, you only get transactional loyalty. Long-term loyalty has to be built through recognition.
People are motivated by acknowledgment. A small sign that their actions matter can drive long-term engagement more effectively than discounts. The most impactful programs reward customers for behaviors that align with the brand’s values, not just its revenue goals.
Real-World Example:
H&M’s loyalty program rewards customers not just for purchases but for adopting sustainable behaviors. Members earn Conscious Points for actions like recycling clothes in-store, bringing reusable bags, and choosing climate-smart delivery options. These points convert into vouchers, making customers feel their eco-conscious choices are both valued and rewarded.
Try This:
- Reward actions like writing reviews, referring friends, or choosing sustainable options.
- Recognize tenure and consistency, not just spend volume.
- Make the reward feel personal.
5. Design for People, Not Just KPIs
As we already stated in the beginning, if you want people to engage in your loyalty program, you need to put them at the center.
People stay loyal because of how the brand makes them feel—understood, valued, or connected to something bigger than a discount. That’s the power of emotional loyalty. It’s built through shared values, thoughtful experiences, and moments of unexpected delight. Unlike transactional loyalty, it’s harder to fake—and much harder to break.
“The simple fact of understanding that I am the object of commercial practice, knowing the brand seeks to sell me its products, directly kills any attempt to create emotion. Even with more subtle commercial methods, I can still sense that someone wants to sell me something, and that immediately puts me off. I’d rather brands try to understand me, talk to me, and exchange opinions with me in a more neutral way.”
— Jessica Lavigne, CRM and Customer Loyalty Consultant at Comarch
Real-World Example:
Nike’s loyalty program doesn’t revolve around points—instead, it promotes experiences and a sense of community. Members can gain access to running challenges, training plans, exclusive offers, and even community events. Perks like free delivery and receiptless returns round out the experience, but it’s the emotional connection—feeling part of something bigger—that keeps members engaged.
Try This:
- Let customers earn rewards for sustainable or community-driven actions
- Use loyalty communications to reinforce shared values and identity
- Surprise top-tier members with unexpected perks—not just spend-based rewards
Leverage Psychology to Build Smarter Retail Loyalty
Loyalty doesn’t come from points alone—it comes from understanding people. When you build your retail loyalty program around real human behavior, you create something that feels intuitive, rewarding, and worth sticking with.
The insights in this article are just the starting point. The real challenge is turning behavioral science into a working loyalty strategy—and that’s where the right tools matter.
At Comarch, we help retailers design programs that reward more than just transactions. From personalized nudges to emotional triggers, tiered journeys, and gamified experiences, our platform helps bring behavioral insights to life.
Curious how it could work for your brand? Contact our loyalty experts.
