Loyalty as the Retail Media Backbone

A version of this article was published to my column at The Drum on May 12, 2026. You can read the original post here: loyalty data is becoming retail media's strongest defense.

A couple of weeks back I sat on a retail media panel at Loyalty Connect in Atlanta, surrounded by people who've been designing, launching, and fixing loyalty programs for decades. I was the odd one out — most of my work sits one layer above loyalty, in retail media.

But the two are inseparable. Loyalty data is the behavioral signal that powers audience creation, and the match key that makes closed-loop measurement work.

What I left thinking about, though, was something else. As AI compresses the shopping journey and threatens the on-site surfaces where RMNs earn their highest margins, the loyalty program is becoming the thing that keeps shoppers in a retailer's ecosystem at all. The data layer underneath. The emotional layer on top.

The data foundation

Christine Foster, group vice president of commercial strategy and operations at Kroger Precision Marketing, made this concrete on a livestream I hosted recently. KPM just launched an integration with Google — linking Kroger audiences inside YouTube and DV360, with a conversion API that lets brands optimize against actual retail KPIs: total sales dollars, incremental households, incremental units, down to the SKU.

What makes that possible? A loyalty program running for more than 20 years. "95% of all Kroger transactions are connected to that loyalty account," Foster said. "Most retailers, when you talk about being able to just copy and paste this, most retailers cannot, or don't have that level of confidence in their data sets."

The pattern repeats across every RMN I've profiled this past year:

A note: addressable IDs are broader than loyalty members — a retailer can have addressability without a formal program. But loyalty-derived identity is usually the stronger version. It's voluntarily provided, transaction-linked, persistent across channels, and tied to a clear value exchange the consumer chose to enter.

At the panel, Chris Norton, who built Marriott's Riot Media network, said measurement is the single most important capability for any loyalty-based media business. "You won't scale without measurement." Even with 150 million Bonvoy members, Marriott has had to triple down on proof to convince advertisers.

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What survives when the journey collapses

I've been writing here for months about how AI-enabled shopping threatens retail media's foundation. When consumers do their product research inside an answer engine and arrive at a retailer's site already knowing what they want, they skip the ad surfaces that generate most of retail media's current revenue.

That's the threat. Here's what doesn't collapse: the loyalty program. A shopper's status, accrued benefits, and emotional connection to a retailer persist even when the discovery journey doesn't.

Charlie Casey, co-founder and CEO of loyalty platform LoyaltyLion, told me "Technology will change how we buy, but not why we buy." He splits consumer motivation into rational (convenience, price, quality) and emotional (identity, status, belonging). AI agents handle the rational side brilliantly. The emotional side is where loyalty programs operate.

But not every program is built for this. A framework I encountered at Loyalty Connect — SAPS — clarifies why:

Most retail programs sit in "stuff": points, discounts, cashback. That's exactly the layer agents will pick apart — gaming dormant accounts for win-back offers, comparing point values across programs, exploiting every promotional loophole.

Status and access are harder to copy. As Taryn Dominie, senior director and head of industry at Home Depot's Orange Apron Media, said on the panel: "You can't just buy the loyalty. You need to have that love of the brand too."

Earning vs. burning: where the next ad surfaces live

Salesforce's latest Connected Shoppers Report found that 70% of consumers would use an AI agent to manage their loyalty points — the number one use case, ahead of returns and price drops.

But Stephanie Meltzer-Paul, a loyalty veteran with senior roles at Mastercard, Dunkin', and BJ's Wholesale Club, drew a distinction I keep coming back to. "The earn side of loyalty is easier via an agent than the burn side," she told me in an interview last year.

Agents can route purchases to maximize point accrual, pick the right credit card, even enroll consumers in new programs. But redemption — with its tier-based logic, promotional multipliers, and experiential rewards — stays tethered to the retailer's environment. If you're sitting on 1,000 Ulta points, you still need to go to Ulta to spend them.

So earning gets disintermediated. Burning happens inside the retailer's ecosystem — which means the retailer keeps a captive, high-intent audience at the moment of redemption. For RMN leaders trying to figure out where the next advertising surfaces will live as on-site browsing declines, the redemption experience deserves serious attention.

Daily habits beat transactional rewards

In March, the MOVE app from Dick's Sporting Goods shot to the top of the App Store. It syncs fitness trackers and lets customers earn points for daily physical activity. The dollar value is modest. The behavioral mechanics aren't: a customer who opens a retail app every morning to log their steps has built a habitual, direct relationship that no AI agent is sitting between.

"To have true loyalty, you have to have an emotional connection with the brand," Casey told me. "It has to feel like a club, a community. Just giving people points for what they buy is way too transactional."

A loyalty program that only activates at the point of purchase is a data source. One that creates daily engagement is a media platform.

What Next

The programs that will struggle are the ones still concentrated in points and discounts — exactly what agents will arbitrage away. The ones that will hold their ground are investing in status, access, and the kind of daily engagement that creates genuine preference rather than transactional convenience.

Loyalty has survived every major commerce shift by adapting. This one won't be different — if the adaptation starts now.

Related reading from me:

• Why Agentic Shopping Poses an Existential Threat to Retail Media (Part 1)
• Agentic Shopping Poses an Existential Threat to Retail Media (Part 2)
• 7 Ways to Break the Retail Media Doom Loop
• 9 Ways to Make Your Loyalty Program Simply Irresistible... To AI Agents