January 14, 2026
Syda_Productions/Depositphotos.com
As Consumer Expectations Skyrocket, How Must Retailers Redefine Loyalty?
According to the 2026 Customer Loyalty Engagement Index put forth by Brand Keys — its twenty-eighth such annual measurement — a few striking bits of statistical data were put forth. Chief among these: A sea-change in the expectations put forth by today’s consumer, one which threatens to push retailers to be much more dynamic and responsive to day-to-day shopper desires.
“Consumer expectations jumped 32% year-over-year – the largest single-year increase since the survey’s inception in 1998. This surge in expectations has transformed the competitive terrain, with 40% of product and service categories identifying new #1 brands in their ability to meet evolving consumer demands,” a January 12 press release (via Western Grocer) noted.
Robert Passikoff, founder and president of Brand Keys, zeroed in on the emerging tensions between expectations and loyalty.
“Expectations are rising faster than brands are improving. Consumers want more from brands across every touchpoint, and they reward brands that deliver. Long-time loyalty leaders are being challenged by brands that better anticipate and deliver what matters most to consumers,” he said.
Other notable data points pulled from the CLEI included:
- Retention has never been more important: According to the numbers, retention costs are infinitesimal (at 17 to 25 times lower) than acquisition costs. This represents a 26% increase since 1997.
- Loyalty drives exponential profits: A mere 5% improvement in terms of brand or retailer loyalty can nearly double (up to 88%) lifetime profits per shopper.
- Marketing budgets can see increased efficiencies as loyalty grows: Something as little as a 2% improvement in loyalty can yield nearly a one-third (29%) reduction in marketing and operational costs.
“These dynamics are why loyalty’s correlation with market share remains so strong – 0.87. Loyal customers are six times more likely to engage, repurchase, and amplify brand messaging. The bottom line: loyalty moves markets,” Passikoff added.
Winners in Terms of Consumer Opinion (Brands and Retailer)
In terms of some of the more notable victors when discussing brands and retailers U.S. shoppers put atop the podium: Beer (Michelob Ultra for light, and Modelo for regular); Campbell’s when it comes to canned soup; Skechers in athletic footwear; Hyundai when it comes to automotive brands; Sephora and Maybelline, both leading the mass cosmetics segment; Ruger on the firearms side of things; Ben & Jerry’s took the crown in the ice cream category; Lysol was proclaimed the top choice in household cleaners; Amazon, perhaps unsurprisingly, took No. 1 in online retail; Whole Foods assumed the lead in natural food stores; Shell was the preferred gas company; T.J. Maxx led the pack in retail department stores, while Dollar General was tops on the discount store front; and Home Depot snagged the top pick on the home improvement store category.
And while nearly half of categories saw new top selections, indicating a great degree of disruption, certain long-standing winners retained their positions. These include Domino’s (pizza category leader for 22 years); Dunkin (out-of-home coffee, two decades); Hyundai (auto, 17 years); and Amazon (online retail, 15 years).
BrainTrust
Frank Margolis
Executive Director, Growth Marketing & Business Development, Toshiba Global Commerce Solutions
Peter Charness
Retail Strategy - UST Global
Jeff Sward
Founding Partner, Merchandising Metrics
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Discussion Questions
Do you believe that consumer expectations are at an all-time high, as the data suggests? Why or why not?
How can retailers best capture loyalty, given the proliferation of options available to U.S. consumers?
Which brands or retailers are currently doing a commendable job at capturing loyalty and retention? Conversely, which organizations are obviously failing?
Poll
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In a market where volume growth is flat to negative, retaining customers is more important than ever. Unfortunately, as consumers are shopping around more to find the best value, loyalty is more fleeting than ever. Balancing this equation is very difficult – but from all the data, those that do the best job are ensuring propositions are very aligned to consumer expectations rather than those who bribe through points or other loyalty mechanics.
Yes…a distinction that must always be kept in mind. Loyalty versus having been bribed with reward points. Loyalty can withstand some level of being bribed away…until……
There are enough loyalty points out there that one needs to pay attention.
Loyalty needs to be more than 5% off your bill – it needs to be experiential and elicit emotions and excitement! Exclusive member-only products, curated collections, a freebie on your birthday, and more – this is what makes loyalty feel personalized.
Consumer expectations are looking up, but many are still squeezing the pocketbook, finding the best possible price or price/item combo on any given shopping trip and purchase.
Offering retail discounts will still activate consumer trial, whereas giving the customer a discount to buy something in return is not loyalty – it’s simply an incentive. Capturing loyalty at retail comes from beating experience expectations, listening and acting, helping customers save time, removing hassle, providing insights to make decisions, and building a relationship.
Yes, consumer expectations are indeed at an all-time high due to several factors. The rapid advancement of technology has led to increased access to information and a demand for instant gratification. Additionally, the rise of social media has created a platform for consumers to easily share their experiences, further driving companies to meet higher standards.
Consumer expectations are set by the last innovation that they experience. If one Retailer offers them same day package delivery with a ribbon around it, that’s the new normal that everyone has to measure up to. Good service is a fast-moving target to attain.
Consumers can access more information than ever before they even make a purchase. It’s easy to compare products on price, features, and reviews in minutes, which can make the product itself less of a differentiator. What sets brands apart is what they offer beyond the transaction, whether that’s exclusive rewards, strong post-purchase service, flexible returns, or shipping benefits that give people a reason to return.
First, let’s talk about consumer expectations. They are higher for different reasons. One reason that can’t be ignored is due to the changing expectations in customer service/CX. A big reason the expectations are higher is that consumers no longer compare a retailer to its direct competitors. Their expectations are based on the best experience they have had from any retailer.
Loyalty is not the same as repeat business, although that’s a VERY GOOD thing – and a good start toward creating loyalty. There are many reasons customers come back: convenience, price, loyalty programs, and more. None of those can become true customer loyalty until there is an emotional connection that drives consumers to return because they “love” the brand, its employees, and the experience. Price becomes less relevant.
I do believe consumer expectations are at an all-time high, but not because customers are suddenly more demanding for the sake of it. Expectations rise when consumers are exposed to better experiences elsewhere. Digital-first brands, marketplaces, and even fintech and media platforms have reset what “good” looks like. When shoppers experience frictionless discovery, transparent pricing, fast fulfillment, and relevant recommendations from retail leaders, they naturally expect the same from every retailer they interact with. The gap that Brand Keys highlights is less about impatience and more about inconsistency across touchpoints.
Capturing loyalty today is not only about points and perks but also about relevance and trust. With rising costs, customers are being far more intentional about where they spend. Retailers that invest in strong customer data foundations, clean identity resolution, and practical personalization are better positioned to guide shoppers toward the right purchase at the right moment. A well-governed CDP is no longer a nice-to-have. It is table stakes for understanding intent, avoiding over-marketing, and delivering value without noise.
Retailers that will rely on blanket promotions, generic messaging, or inconsistent omni-channel experiences will visibly lose ground. Loyalty is no longer claimed. It is continuously earned through relevance, reliability, and respect for the customer’s wallet.
I do believe consumer expectations are at an all-time high, and that’s not surprising given how rapidly shopping experiences have evolved over the past decade. Today’s customers expect seamless interactions, transparent pricing, friction-free fulfillment, personalized relevance, and consistent value — all delivered with choices that span channels and formats. When expectations are shaped by real-time inventory visibility, same-day delivery, and hyper-targeted offers from leading players, anything less feels like a step backward rather than a neutral experience. In that sense, the data reflects a broader shift in baseline consumer tolerance: shoppers won’t just forgive friction because a brand has heritage or a familiar storefront anymore.
To capture loyalty in this environment, retailers need a tri-vector strategy grounded in (1) product offering that resonates, (2) value that feels fair and tangible, and (3) speed and convenience that minimize effort. This combination cuts across formats: value-seekers want price confidence, experience-driven shoppers want relevance and ease, and digitally fluent consumers want immediacy and personalization. Retailers that consistently deliver against all three axes are the ones building stickier relationships with customers, not just one-time transactions.
In the broader context today, Walmart, Amazon, and Costco are standout examples of this trifecta in action. Walmart pairs scale and assortment with evolving omnichannel execution; Amazon couples selection with fast fulfillment and tailored recommendations; and Costco’s membership model reinforces value perception with curated inventory and strong price positioning. These brands have built loyalty not on a single tactic but on consistently reinforcing reliability and convenience at every customer interaction.
Conversely, many luxury retailers — despite having highly affluent customer bases — have yet to fully leverage technology to elevate service and personalization at scale. Too often, luxury experiences remain siloed between digital and in-store channels, with inconsistent data integration, dated loyalty mechanics, and underutilized AI-enabled personalization. In a world where even prestige shoppers expect the same ease and relevance they get from mass-market leaders, luxury brands risk dilution of loyalty if they don’t modernize how they engage and serve customers across every touchpoint.
Is the customer raising their own bar of expectations, or is the market continually raising the bar by offering new competitive toys and tools and deals in the constant quest for customer acquisition and retention? Loyalty isn’t a done deal with the first purchase. It’s established over time with consistent performance in price, value, quality. Loyalty can certainly be tested by new market innovation, which is why brands and retailers are constantly challenged to evolve. A competitor is going to be raising the bar if you don’t do it before them.
Loyalty today is far more fragile than it used to be, and it has little to do with points or rewards. Customers want brands to get the basics right around convenience and they don’t stick around when that falls apart.
Loyalty today is built less on affinity and more on reliability. With so many options available, customers reward brands that behave consistently under pressure. Did the order arrive when promised? Was the checkout smooth? Was the return easy? That’s where loyalty is earned or lost.
Capturing loyalty now has less to do with messaging and more to do with execution at scale. Brands earn trust by delivering on basic promises over time. In a crowded market, people stay loyal to brands that make life easier and genuinely resonate with them.
Consumer expectations aren’t universally “higher”; they’re more fragmented. Shoppers now have full transparency into price, quality, and alternatives, so they behave rationally, not unreasonably. With store expansion slowing for most retailers, growth has to come from the customers they already have — bigger baskets and more frequent trips. That puts the focus on execution, not theatrics.
Loyalty today is earned through reliability and reduced friction, not points or emotional storytelling. The retailers winning are the ones who make every mission easier and more predictable, whether it’s a quick refill or a full stock‑up. When a brand consistently removes hassle and delivers what it promises, customers return. Everything else is optional.
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In a market where volume growth is flat to negative, retaining customers is more important than ever. Unfortunately, as consumers are shopping around more to find the best value, loyalty is more fleeting than ever. Balancing this equation is very difficult – but from all the data, those that do the best job are ensuring propositions are very aligned to consumer expectations rather than those who bribe through points or other loyalty mechanics.
Yes…a distinction that must always be kept in mind. Loyalty versus having been bribed with reward points. Loyalty can withstand some level of being bribed away…until……
There are enough loyalty points out there that one needs to pay attention.
Loyalty needs to be more than 5% off your bill – it needs to be experiential and elicit emotions and excitement! Exclusive member-only products, curated collections, a freebie on your birthday, and more – this is what makes loyalty feel personalized.
Consumer expectations are looking up, but many are still squeezing the pocketbook, finding the best possible price or price/item combo on any given shopping trip and purchase.
Offering retail discounts will still activate consumer trial, whereas giving the customer a discount to buy something in return is not loyalty – it’s simply an incentive. Capturing loyalty at retail comes from beating experience expectations, listening and acting, helping customers save time, removing hassle, providing insights to make decisions, and building a relationship.
Yes, consumer expectations are indeed at an all-time high due to several factors. The rapid advancement of technology has led to increased access to information and a demand for instant gratification. Additionally, the rise of social media has created a platform for consumers to easily share their experiences, further driving companies to meet higher standards.
Consumer expectations are set by the last innovation that they experience. If one Retailer offers them same day package delivery with a ribbon around it, that’s the new normal that everyone has to measure up to. Good service is a fast-moving target to attain.
Consumers can access more information than ever before they even make a purchase. It’s easy to compare products on price, features, and reviews in minutes, which can make the product itself less of a differentiator. What sets brands apart is what they offer beyond the transaction, whether that’s exclusive rewards, strong post-purchase service, flexible returns, or shipping benefits that give people a reason to return.
First, let’s talk about consumer expectations. They are higher for different reasons. One reason that can’t be ignored is due to the changing expectations in customer service/CX. A big reason the expectations are higher is that consumers no longer compare a retailer to its direct competitors. Their expectations are based on the best experience they have had from any retailer.
Loyalty is not the same as repeat business, although that’s a VERY GOOD thing – and a good start toward creating loyalty. There are many reasons customers come back: convenience, price, loyalty programs, and more. None of those can become true customer loyalty until there is an emotional connection that drives consumers to return because they “love” the brand, its employees, and the experience. Price becomes less relevant.
I do believe consumer expectations are at an all-time high, but not because customers are suddenly more demanding for the sake of it. Expectations rise when consumers are exposed to better experiences elsewhere. Digital-first brands, marketplaces, and even fintech and media platforms have reset what “good” looks like. When shoppers experience frictionless discovery, transparent pricing, fast fulfillment, and relevant recommendations from retail leaders, they naturally expect the same from every retailer they interact with. The gap that Brand Keys highlights is less about impatience and more about inconsistency across touchpoints.
Capturing loyalty today is not only about points and perks but also about relevance and trust. With rising costs, customers are being far more intentional about where they spend. Retailers that invest in strong customer data foundations, clean identity resolution, and practical personalization are better positioned to guide shoppers toward the right purchase at the right moment. A well-governed CDP is no longer a nice-to-have. It is table stakes for understanding intent, avoiding over-marketing, and delivering value without noise.
Retailers that will rely on blanket promotions, generic messaging, or inconsistent omni-channel experiences will visibly lose ground. Loyalty is no longer claimed. It is continuously earned through relevance, reliability, and respect for the customer’s wallet.
I do believe consumer expectations are at an all-time high, and that’s not surprising given how rapidly shopping experiences have evolved over the past decade. Today’s customers expect seamless interactions, transparent pricing, friction-free fulfillment, personalized relevance, and consistent value — all delivered with choices that span channels and formats. When expectations are shaped by real-time inventory visibility, same-day delivery, and hyper-targeted offers from leading players, anything less feels like a step backward rather than a neutral experience. In that sense, the data reflects a broader shift in baseline consumer tolerance: shoppers won’t just forgive friction because a brand has heritage or a familiar storefront anymore.
To capture loyalty in this environment, retailers need a tri-vector strategy grounded in (1) product offering that resonates, (2) value that feels fair and tangible, and (3) speed and convenience that minimize effort. This combination cuts across formats: value-seekers want price confidence, experience-driven shoppers want relevance and ease, and digitally fluent consumers want immediacy and personalization. Retailers that consistently deliver against all three axes are the ones building stickier relationships with customers, not just one-time transactions.
In the broader context today, Walmart, Amazon, and Costco are standout examples of this trifecta in action. Walmart pairs scale and assortment with evolving omnichannel execution; Amazon couples selection with fast fulfillment and tailored recommendations; and Costco’s membership model reinforces value perception with curated inventory and strong price positioning. These brands have built loyalty not on a single tactic but on consistently reinforcing reliability and convenience at every customer interaction.
Conversely, many luxury retailers — despite having highly affluent customer bases — have yet to fully leverage technology to elevate service and personalization at scale. Too often, luxury experiences remain siloed between digital and in-store channels, with inconsistent data integration, dated loyalty mechanics, and underutilized AI-enabled personalization. In a world where even prestige shoppers expect the same ease and relevance they get from mass-market leaders, luxury brands risk dilution of loyalty if they don’t modernize how they engage and serve customers across every touchpoint.
Is the customer raising their own bar of expectations, or is the market continually raising the bar by offering new competitive toys and tools and deals in the constant quest for customer acquisition and retention? Loyalty isn’t a done deal with the first purchase. It’s established over time with consistent performance in price, value, quality. Loyalty can certainly be tested by new market innovation, which is why brands and retailers are constantly challenged to evolve. A competitor is going to be raising the bar if you don’t do it before them.
Loyalty today is far more fragile than it used to be, and it has little to do with points or rewards. Customers want brands to get the basics right around convenience and they don’t stick around when that falls apart.
Loyalty today is built less on affinity and more on reliability. With so many options available, customers reward brands that behave consistently under pressure. Did the order arrive when promised? Was the checkout smooth? Was the return easy? That’s where loyalty is earned or lost.
Capturing loyalty now has less to do with messaging and more to do with execution at scale. Brands earn trust by delivering on basic promises over time. In a crowded market, people stay loyal to brands that make life easier and genuinely resonate with them.
Consumer expectations aren’t universally “higher”; they’re more fragmented. Shoppers now have full transparency into price, quality, and alternatives, so they behave rationally, not unreasonably. With store expansion slowing for most retailers, growth has to come from the customers they already have — bigger baskets and more frequent trips. That puts the focus on execution, not theatrics.
Loyalty today is earned through reliability and reduced friction, not points or emotional storytelling. The retailers winning are the ones who make every mission easier and more predictable, whether it’s a quick refill or a full stock‑up. When a brand consistently removes hassle and delivers what it promises, customers return. Everything else is optional.