Why Now Is the Time for Retailers to Embrace Gamified Loyalty Strategies
Jeff Baskin, Chief Revenue Officer at Eagle Eye
Despite growing evidence of its impact, gamification remains an underutilized strategy among U.S. grocers, representing a missed opportunity to strengthen loyalty, drive digital engagement, and capture more first-party data. While retailers pour billions into traditional promotional strategies, they’re overlooking a powerful tool that competitors across the Atlantic are already using to build deeper customer relationships and improve profitability.
Even with recent and resurgent pricing pressures putting more emphasis on value and discounts, consumers still expect personalized experiences that offer more than a swipe-and-go interaction, particularly in the context of the retail loyalty programs they belong to. They want to feel recognized, engaged, and rewarded for their loyalty in ways that extend beyond basic member-only discounts or points accumulation. Gamification addresses this need by creating interactive experiences that make routine shopping feel more rewarding and purposeful.
Engagement Builds Differentiation in Competitive Retail Markets
Consumers have access to more shopping options than ever before. They can choose from traditional supermarkets, warehouse clubs, discount chains, online retailers, and specialty stores. In this crowded marketplace, retailers must find ways to stand out, as competing on price alone is no longer enough. Gamification creates emotional connections that transcend price competition by tapping into shoppers’ intrinsic motivations and setting the stage for deeper engagement.
The psychology behind gamification draws on fundamental human motivations: achievement, progress, and recognition. When shoppers complete challenges, earn badges, or progress through tiers, they develop a sense of accomplishment that creates positive associations with the brand. This active engagement builds stronger customer relationships than traditional loyalty programs that merely offer points for purchases.
From Discounts to Data: Using Behavior to Drive Better Results
Behavior-based incentives do more than keep consumers actively engaged. They also reveal shopper preferences, enabling smarter, more targeted promotions and better ROI. Traditional discounting strategies often lack precision, offering blanket promotions that may not resonate with individual customers or encourage specific behaviors that benefit the retailer.
Gamified promotions allow retailers to design challenges that guide customers toward desired actions while gathering valuable data about their preferences and shopping patterns. For example, a challenge that rewards customers for trying new products in a specific category not only drives sales but also provides insights into consumer willingness to experiment.
This data-driven approach enables retailers to move beyond generic promotional strategies toward personalized engagement that delivers measurable results. Rather than offering the same discount to all customers, retailers can create targeted challenges that speak to individual shopping behaviors and preferences, leading to higher engagement rates and improved return on promotional investment.
Gamification In Action
Examples like Tesco’s award-winning Clubcard Challenges show that personalized gamification is scalable, measurable, and ready to deliver real competitive advantage. These implementations demonstrate that gamification isn’t just a theoretical concept but a practical strategy that major retailers are successfully deploying.
Launched last May, Tesco’s Clubcard Challenges initiative is one of the largest applications of gamified loyalty in the UK grocery sector to date, targeting up to 10 million Clubcard members with individually tailored challenges that unlock rewards based on spending behavior. The program creates personalized missions for customers, such as “Try 5 new products this month” or “Shop for fresh produce 3 times,” with rewards tied to completion.
The proposition also presents an opportunity to unlock net new CPG funds by commercializing access to suppliers, enabling them to create gamified challenges that directly align with their brand and wider category objectives. The AI-powered platform not only automates and scales the delivery of these multi-step, branded challenges to the right customers but also provides CPGs with real-time performance tracking and attribution analysis. Suppliers can expect a strong return on investment – up to 4:1 incremental sales to reward earned – by funding challenges that only reward incremental spending.
The success of Clubcard Challenges is spurring a wider shift in loyalty strategy among both UK and North American grocers: using advanced AI and gamification to drive high-impact campaigns that not only engage customers but deliver tangible commercial returns. Combined with the increased incentive for CPG-funded rewards and the potential for using AI to achieve greater personalization in retail media advertising, new grocery loyalty strategies are demonstrating their value to both retailers and their vendors. Early results from these implementations show increased customer engagement, higher basket sizes, and improved retention rates compared to traditional promotional approaches.
In-store tech like Instacart’s Caper Carts, showcased at NRF 2024, also show potential for tech-enabled engagement. The smart shopping carts incorporate gamified elements that guide customers through personalized challenges and offers while they shop, creating an interactive experience that bridges digital and physical retail environments.
Grocers like Albertsons, Walmart, and Save Mart have also introduced game-inspired features, from mobile app challenges to in-store scavenger hunts, aimed at increasing digital engagement and loyalty and demonstrating that whether a national chain or regional player, gamification can be successfully adopted and scaled across different retail formats.
Bringing Gamification Into Focus
Gamification represents a proven strategy for building customer loyalty, increasing engagement, and driving profitable growth in today’s competitive retail environment. U.S. retailers who continue to rely solely on traditional promotional strategies risk falling behind competitors who recognize the power of behavioral psychology and personalized engagement.
The technology infrastructure needed to implement gamified promotions already exists, and successful case studies from both domestic and international retailers provide clear blueprints for implementation. All that’s left is for a critical mass of U.S. retailers to recognize the value gamification can add to modern loyalty strategies—not just to move beyond transactional relationships, but to deliver the emotional engagement today’s consumers expect. With the right approach, gamification can create these deeper connections while generating rich customer data and stronger outcomes across loyalty, sales, and engagement.
Author bio:
Jeff Baskin is a seasoned senior executive leader with over 20 years of experience in the technology sector, specializing in grocery, convenience, restaurant, and big-box retail industries. Jeff’s expertise lies in omni-channel strategies and the full spectrum of digital retail ecosystems, including eCommerce, loyalty programs, mobile platforms, digital marketing, and marketplaces. He has created partnerships with some of the world’s largest retailers to optimize the customer experience, in-store operations, digital programs, and streamline supply chain solutions.