Shoppers participating in retail loyalty programmes are handing over valuable personal data while ultimately benefiting retail companies more than themselves, according to recent academic research. Edith Cowan University professor of marketing and service science Sanjit Roy stated that customers frequently lack the time to run a mental cost-benefit analysis at the register, leaving them vulnerable to automated prompts that reinforce continuous card-scanning habits.
The Global Growth of Retail Rewards Markets
The global loyalty market is expected to surge in value from US$17.38 billion (NZD$29.49 billion) in 2026 to US$51.65 billion (NZD$87.63 billion) by 2034, according to projections cited by Edith Cowan University professor of marketing and service science Sanjit Roy. Meanwhile, established schemes like the Woolworths Everyday Rewards programme in New Zealand give shoppers a $15 voucher for every 2000 points accumulated.
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Why Shoppers Lose Out on Everyday Transactions
Retailers hold the upper hand in every loyalty transaction because consumers trade personal data for minimal financial return, according to research produced by Edith Cowan University professor of marketing and service science Sanjit Roy. Based on findings from a study of 800 supermarket customers, Roy noted that shoppers routinely earn one point for every dollar spent, requiring thousands of points before unlocking minor discounts. Roy pointed out that customers must ask whether handing over continuous purchase history is truly worth it when standard promotions fail to reflect genuine tailored savings.
Consumer NZ has previously issued warnings regarding these tracking practices, cautioning that supermarkets could potentially leverage loyalty data to bump up prices in regions or locations where they identify customers are willing to pay more. Because retailers automate prompts at self-service checkouts and manned tills alike, shoppers rarely pause to evaluate the exchange of their personal information.
How AI and Data-Driven Retailers Target Consumers
Retailers possess all the technological tools necessary to examine and analyze consumer buying patterns in an AI-enabled economy, according to Edith Cowan University professor of marketing and service science Sanjit Roy. Every time a shopper scans a loyalty card, the transaction records specific item types and quantities. Roy stated that companies can easily do much more with this data than they currently do, suggesting that shops should shift away from delayed voucher systems toward instant gratification. For example, if a retailer tracks that a young parent regularly buys nappies, predictive algorithms could instantly trigger a targeted discount precisely when the customer is likely running low, rather than forcing them to wait for 2000 standard points.
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