Here’s a number that should confuse you: 71% of Australian consumers say they’re less loyal to brands than they were two years ago. And yet, loyalty program membership just hit a five-year high.
That’s not a contradiction — it’s the most important shift in Australian retail right now. And the brands that understand the difference between brand loyalty and program loyalty are the ones pulling ahead.
The Paradox Every Brand Needs to Understand
M+C Saatchi Group research confirmed what most marketing managers already suspect: Australians are shopping around more than ever. They’re comparing prices online, visiting multiple stores, driving further for discounts, and switching brands without a second thought.
But here’s what the headlines miss. At the same time brand loyalty is collapsing, loyalty program engagement is surging. More than 86% of Australians belong to at least one loyalty program, and active participation is at a five-year high. Australia’s loyalty market is projected to grow at 13% CAGR through 2029, reaching US$1.96 billion.
What’s happening? The cost-of-living crisis didn’t kill loyalty. It redefined it. When household budgets are under pressure — and living costs rose between 2.6% and 5.2% in the year to March 2026, according to ABS data — consumers don’t abandon loyalty programs. They lean into them harder. The program becomes a financial tool, not a nice-to-have perk.
The distinction matters enormously for how you design your program.
Why Points Alone Won’t Save You
Here’s where most programs get it wrong. They were designed for a different economy — one where consumers would happily accumulate points over months for an aspirational reward like flights or electronics. That patience has evaporated.
Research shows 45% of Australians now use reward points specifically to help reduce cost-of-living stress. They’re not saving for a weekend away. They’re trying to shave dollars off this week’s grocery bill.
This shift has consequences. A program that asks a customer to spend $2,000 to earn $10 back — the standard earn-and-burn rate — needs to prove that $10 matters right now, not in three months. The brands winning this game have figured out that perceived value beats actual value, and immediacy beats magnitude.
Woolworths understood this when it launched Everyday Rewards Extras at $7 per month. The deal is simple: 10% off one shop each month, plus double points. For a household spending $200 per week on groceries, that’s roughly $20 saved against a $7 cost. The maths is obvious and immediate. No mental arithmetic about point-to-dollar conversion ratios. No waiting. Just a discount you can see on the receipt.
That’s what a cost-of-living loyalty program looks like.
What Does a Cost-of-Living Loyalty Program Actually Look Like?
If your current program was designed before 2022, it’s probably built on assumptions that no longer hold. Here’s what works when customers are counting every dollar.
Instant Savings Over Deferred Rewards
The single biggest shift in loyalty design is the move from “earn now, redeem later” to “save now.” This doesn’t mean abandoning points — it means supplementing them with immediate, visible savings. Fuel discounts at the bowser. Dollars off at checkout. Personalised coupons that arrive before the shopping trip, not after.
Flybuys’ membership grew 4.4% in 2025, with swipe rates up 6%. That growth wasn’t driven by the promise of future rewards. It was driven by the weekly offers, the fuel discounts, and the partner deals that put cash back in members’ pockets immediately.
Personalisation That Proves You Know the Customer
Generic “10% off everything” offers feel generous but wasteful. Cost-conscious consumers respond better to personalised offers on products they actually buy. When a program surfaces a $3 discount on the exact brand of coffee a customer buys every fortnight, that feels like the program is working for them specifically.
This is where data platforms like Trudy become critical. Predictive analytics can identify not just what a customer bought, but when they’re likely to need it again, what they’d consider switching to, and what discount threshold will keep them loyal. The brands with this capability are turning their loyalty programs into personalised savings engines — and seeing the retention numbers to prove it.
Tiered Value That Rewards Frequency, Not Just Spend
Traditional tiered programs reward big spenders. In a cost-of-living environment, that’s backwards. Your most valuable customers might be the ones visiting three times a week with a $30 basket, not the ones doing a single $300 shop monthly.
Redesigning tiers around visit frequency or engagement — rather than total spend — signals to cost-conscious customers that their consistent business is valued. It also drives the habitual behaviour that makes switching harder.
The Retention Equation Changes Under Pressure
Every marketer knows the old line about retention being cheaper than acquisition. In cost-of-living Australia, the maths has shifted even further.
When 60% of APAC consumers say they’ll switch brands for better value — and 72% of Australian shoppers now prefer store brands — acquisition costs are climbing because everyone is chasing the same deal-seeking consumers. Meanwhile, a well-designed loyalty program that delivers genuine financial utility creates a switching cost that price alone can’t overcome.
Think about it from the consumer’s perspective. If switching supermarkets means losing three months of earned benefits, a personalised offer feed that actually saves money each week, and a fuel discount that knocks 10 cents per litre off the family car — the competitor needs to offer more than just cheaper milk.
That’s the strategic value of loyalty in a downturn. It raises the switching cost without raising your prices.
The Brands Getting It Wrong
Two common mistakes stand out.
First, cutting loyalty budgets during tough economic periods. This is spectacularly backwards. The moment your competitors are tightening their programs is exactly when generous, well-designed loyalty creates the most differentiation. Industry data consistently shows that loyalty program members spend 12–18% more than non-members. Cutting the program saves a little on rewards liability. It costs far more in lost frequency and basket size.
Second, clinging to aspirational rewards when customers need practical value. If your top-tier reward is a spa voucher and your members are worried about electricity bills, you’ve lost the room. The best programs right now offer choice — let members convert points to grocery discounts, bill payments, or gift cards for everyday retailers. Flexibility signals that you understand what your customers are actually going through.
The Opportunity Is Now
Australian consumers haven’t stopped being loyal. They’ve stopped being loyal for free. They want programs that work as hard as they do — that deliver visible, immediate, financial value every time they swipe.
The brands that redesign their loyalty mechanics around this reality — instant savings, personalised offers, flexible redemption — won’t just retain customers through the cost-of-living crunch. They’ll build habits that persist long after household budgets recover.
The brands winning in cost-of-living Australia aren’t the cheapest. They’re the ones that make customers feel financially clever for staying loyal.
If your loyalty program still relies on aspirational rewards and deferred gratification, it’s time for a rethink. Trevor Services works with brands across Australia to design promotional and loyalty mechanics that drive genuine retention — not just membership numbers. Get in touch to talk about what a cost-of-living loyalty strategy looks like for your brand.
