Retail loyalty programs in Canada are entering a period of rapid transformation as both economic pressures and rising consumer expectations reshape how shoppers engage with brands. A new national study from Deloitte Canada, authored by Ridhima Gupta, Director in Deloitte’s Strategy, Risk, and Transactions group, finds that loyalty is becoming one of the most important competitive levers in retail. It also highlights a widening gap between the retailers that excel in loyalty and those that are struggling to keep up.

In an interview with Retail Insider, Gupta said Canadians’ enthusiasm for loyalty has been building for decades and shows no signs of slowing. “We’ve always said Canadians are loyalty obsessed,” she explained. “It started with the big coalitions when you could get Air Miles and the like. Everyone had cards and was swiping their cards. 

Canadians are also point supporters, so they love points and they love collecting their points and saving them.”

Her comments reinforce Deloitte’s findings that Canada leads the world in loyalty participation, with more than 95 percent of Canadians enrolled in at least one program. As inflation continues to pressure household budgets, loyalty has shifted from a nice-to-have to a central part of how Canadians shop, save, and determine which brands win their business.

A Market Defined by High Expectations

Deloitte’s research found that 70 percent of customers say they will spend more with brands that offer strong loyalty rewards, a trend that becomes even more pronounced during the holiday season. With many shoppers seeking more value for every dollar spent, loyalty programs help determine not only where consumers shop but how much they spend when they are there.

Gupta believes economic conditions are accelerating this shift. “Canadians are hurting and the dollar isn’t going as far as we all want it to,” she said. “Loyalty is more often than not looked at as a way to help and to actually get more value from these organizations that we’re all so highly engaged with.”

This connection between economic pressure and the desire for value helps explain why retail loyalty programs in Canada are evolving so quickly. Consumers expect more than simple earn-and-redeem mechanics. They want personalization, exclusive access, and new ways to engage with their favourite retailers, which in turn requires retailers to sharpen the value proposition of their programs.

Leaders and Laggards in a High-Performance Market

One of the central findings in Deloitte’s report is the significant divide between loyalty leaders and those at the beginning of their loyalty journey. Only 25 percent of Canadian retailers are considered leaders, while 44 percent are considered lagging.

For Gupta, the difference often begins with whether retailers have a program at all. “There were a number of organizations, over 40 percent, where they’re at very early stages in their loyalty journey,” she said. “That is very challenging because all the good things that we know exist for organizations when it comes to having loyalty, business value, and customer value, they’re not able to access that.”

Among retailers that are already established in loyalty, Gupta sees common characteristics that define leadership. “The first is being clear on value proposition and the purpose of the program,” she said. “It’s very clear in terms of who the program is trying to touch and what customer segment it serves, where they’re trying to retain customers or acquire customers. Everything that’s part of the program ladders up to that.”

Leaders also make early and ongoing investments in people, processes, and technology. Many high-performing programs, according to Deloitte, are now powered by customer data platforms and artificial intelligence to reduce friction, improve personalization, and deliver tailored experiences at scale. This focus on advanced data capability is one of the defining characteristics of the programs that outperform.

The Push Toward Personalization and AI

Personalization has become one of the most important expectations for consumers, yet the Deloitte study finds that only 45 percent of brands currently offer personalized loyalty experiences. More than 70 percent of customers expect it.

Gupta believes AI will play a key role in elevating the next generation of retail loyalty programs in Canada. “Some of the leaders today are really focused on personalization and AI technology,” she said. “CDPs, customer data platforms, and AI are some of the leading capabilities that we’re seeing those programs really lean into.”

She added that personalization must be balanced carefully with privacy. “Consumer expectations are increasing around personalization, but their awareness of how their data is being used is increasing at almost the same rate,” she noted. She emphasized the importance of consulting AI and privacy experts to ensure that personalization is delivered in an ethical and secure way.

Keeping Loyalty Fresh and Engaging

For Gupta, one of the most important points in the Deloitte report is that loyalty programs must continuously evolve to stay relevant. “The Canadian consumer expects something new and exciting,” she said. “You can’t let your loyalty offering get stale.”

This focus on freshness has driven a wave of experimentation across the sector. Programs are introducing new features, new layers of gamification, and new ways for customers to play within the system. Gupta said the most engaged consumers are actively looking for ways to navigate programs creatively, which puts pressure on retailers to maintain the novelty of their offerings.

The importance of constant innovation has also helped drive the rise in new types of partnerships and business models. As retailers search for ways to expand the value of their programs, they are entering into alliances that improve earn-and-redeem potential or open the door to new experiences.

Partnerships That Resonate With Canadian Shoppers

The Deloitte report highlights three categories of partnerships that continue to resonate most strongly with Canadians. “The ones that provide everyday value to consumers will always be in demand,” Gupta said. She emphasized that customers are particularly excited about partnerships that allow them to earn points more broadly and use them in multiple ways across a larger ecosystem.

The second type centres on exclusive experiences. “When partnerships provide experiences that the consumer would not otherwise have, that is very compelling,” she said. This includes concert tickets, travel experiences, and other high-value offerings that shoppers perceive as special or rare.

The third partnership category is values-based. Gupta has seen a notable rise in collaborations rooted in shared brand or national values. “There has been a movement of Canadian organizations coming together,” she said. “I think we will continue to see more values-based partnerships, whether it’s for causes that we really care about or values we are accustomed to.”

These diverse partnership strategies illustrate how retail loyalty programs in Canada are increasingly built around emotional and experiential value rather than strictly transactional rewards.

Measuring ROI in a Complex Loyalty Landscape

One of the challenges highlighted in Deloitte’s study is the difficulty many retailers face when measuring the return on investment of their loyalty programs. Gupta said leading brands start with clear objectives. “Loyalty can do multiple things for a business. It can improve customer retention. It can improve brand resonance. It can get customers to behave differently,” she explained.

Because these objectives vary, so do the associated KPIs. Strong programs build measurement frameworks at the very beginning, incorporating metrics such as customer lifetime value, channel shift, cost efficiencies, and brand lift. Without a clear objective and dedicated KPIs, retailers struggle to understand the program’s performance.

Gupta said the retailers that excel in measurement are those that know precisely what they want to achieve and design their programs around those goals.

Looking Ahead to 2026 and Beyond

As the interview concluded, Gupta said that activity in the loyalty space continues to ramp up. “There is a tremendous amount of interest from organizations in continuing to put loyalty out there,” she said. “There is a ton of activity taking place around innovation of existing programs and partnerships.”

She expects this momentum to accelerate in the coming year. “The game is continuously evolving,” she said. “A big part of loyalty has always been personalization, and I am excited to see how AI will enable organizations to personalize on a one-to-one level and get even smarter with their promotional spend. There is a huge convergence between loyalty and retail media, and I’m excited to see how those things come together.”

Gupta emphasized that retailers should think about loyalty in the broadest sense. “Loyalty is an outcome,” she said. She added that because Canadians are so deeply engaged with loyalty, some of the most exciting innovation happening globally is emerging in the Canadian market. “I find that inspiring, and I hope retailers continue on their journey so we continue to lead on a global scale.”

More from Retail Insider:

• Loyalty trends: Study on what Canadian shoppers want
• Canada’s top 10 loyalty programs and new usage trends