Loyalty isn’t just for retailers - brands want a slice of the pie

When most people think about loyalty, they picture supermarket points, coffee rewards or airline miles and small perks that add up over time like $10 off your shop, your 7th coffee free, or patiently waiting for those frequent flyer points to pay off. Retailers have historically owned loyalty because they control the transaction. They see the purchase, the basket composition and the frequency of visits, which gives them the visibility required to design programs that influence behavioural change and encourage repeat spend.

However, loyalty is not exclusive to retailers. Any organisation with customers can create mechanisms to build ongoing relationships with the people who use their products or services. Increasingly, consumer goods brands are recognising this opportunity.

Historically, consumer goods brands relied heavily on retailer data to understand market performance and shopper behaviour. Retail partners could provide aggregated insights into sales volumes, distribution coverage and category share, sometimes layered with behavioural insights from retailer loyalty programs.

These metrics helped brands understand whether products were growing, declining or outperforming competitors. But increasingly this data comes at a significant cost, as retailers monetise their data assets through retail media networks, insights platforms and analytics services.

What was absent from that data, however, was visibility into the individual shopper or end user, how frequently they purchase the product, and their preferences. Retailers held the relationship with the shopper. The brand relationship was largely mediated through packaging, advertising and shelf presence.

As marketing, personalisation and product innovation become more data driven, and as retailers accelerate private label innovation, the importance of brands building their own direct customer relationships has grown. Loyalty programs are emerging as one of the mechanisms brands can use to begin closing that gap.

Why CPG brands are investing in loyalty

Loyalty programs offer brands an opportunity to build more direct connections with the people who use their products. By creating membership ecosystems that encourage customers to identify themselves and engage with the brand, companies can begin to capture first-party data that was previously inaccessible.

This can include information about product ownership, usage behaviour, preferences and lifecycle stages. It also creates channels through which brands can communicate directly with customers rather than relying solely on retail intermediaries.

The importance of these relationships is increasing as the balance of power between retailers and brands continues to evolve. Retailers are investing heavily in retail media networks, first-party data ecosystems and private label innovation. Retail media whilst valuable is increasing the overall cost of doing business for brands, equally private label competitive pressure is squeezing margins and overall share of market. Building owned data assets assets through loyalty provides brands with new and different ways to engage directly with the market and influence the path to purchase without being as reliant on the retailer.

Different brands approach loyalty in different ways depending on the nature of their category, shopper behaviour and customer expectations. Some focus on community and brand engagement, while others design programs to influence purchase behaviour more directly.

What these approaches share is a clear exchange of value. Customers receive benefits, experiences or rewards, and in return choose to engage directly with the brand.

While brands may struggle to match the scale of retailer loyalty programs in terms of membership and data ecosystems, they bring different advantages. As the creators and manufacturers of the product, they control the brand story, product experience and supply chain, giving them unique opportunities to design more emotive and highly engaging loyalty programs.

Ryobi – building a direct connection

Power tools provide an interesting example of how brands are using loyalty to bridge the gap between retail sales and end users.

Brands such as Ryobi sell exclusively through Bunnings in Australia & New Zealand. Historically, this meant the retailer owned the transaction and the shopper relationship. Ryobi could see how many units were sold and how product categories performed. However, the brand had little visibility into who actually owned the tools.

To address this, Ryobi created My Ryobi, a community program designed to build direct relationships with its customers.

At the centre of this ecosystem is a clear value exchange. Customers register their tools with the brand to activate an extended warranty. The extended warranty provides immediate functional value for the user, while also encouraging customers to identify themselves and their product ownership to the brand. Once registered, members can also engage with the broader community. My Ryobi enables users to share DIY projects, exchange tips, explore tutorials and interact with other tool owners. The platform has grown into a substantial community, with hundreds of thousands of members globally sharing projects and advice.

For Ryobi, the program unlocks insights that would otherwise be difficult to obtain through retail channels alone. The brand gains visibility into product ownership, usage patterns and customer engagement within the DIY community.

This information helps inform product development, marketing and education initiatives, while also strengthening the brand’s relationship with its customers. Importantly, the loyalty mechanism does not rely on discounts or price incentives. Instead, it centres on functional value and community engagement.

Ryobi illustrates one model of brand-led loyalty, where functional value and community engagement encourage customers to identify themselves to the brand. In other categories, particularly among digitally native consumer brands, loyalty programs more closely resemble traditional rewards schemes, using points and referrals to encourage direct engagement and repeat interaction.

How Australian CPG brands are using loyalty to capture data

A growing number of Australian brands are beginning to experiment with brand-led loyalty initiatives designed to build direct relationships with their customers.

Australian skincare brand Frank Body operates Hotel Pink, a loyalty program designed to reward and engage its community of customers for both purchases and engagement. Members earn “Pink Points” for purchases as well as actions such as referring friends, leaving   a review, following the brand on social channels and engaging with its content. Points can then be redeemed for rewards including discounts and exclusive offers. Beyond the incentives themselves, the program allows Frank Body to build a direct relationship with customers who may first encounter the brand through retailers, while also capturing first-party data about purchasing behaviour and engagement with the brand.  Hotel Pink also offers a tiering system but unlike most programs it is based on lifetime spend, meaning once you check into the Penthouse – you never leave.

Australian health food brand Nutra Organics operates Nutra Rewards, a loyalty program designed to encourage direct purchase and engagement with its growing community of shoppers. Shoppers earn points for purchases made through the brand’s online store as well as for actions such as creating an account, referring friends or engaging with the brand across its digital channels. Points can then be redeemed for discounts and rewards. By encouraging customers to interact through its own platform, Nutra Organics creates compelling reasons to buy direct which enables them to capture first-party data, understand purchasing behaviour and build a direct relationship with customers that would otherwise sit primarily with retailers.

Australian confectionery brand FUNDAY provides another example of how emerging brands are using loyalty to build direct relationships with their customers. Through The Fun Club, customers create an account to earn points for actions such as making purchases, referring friends or engaging with the brand online. They even offer bonus points for a streak of purchases called a 5-order jackpot – encouraging of direct purchase with the brand with the brand. Points can be redeemed for discounts and rewards. While the program offers familiar loyalty mechanics, its broader value lies in the direct connection it creates with customers. By encouraging shoppers to identify themselves and interact with the brand beyond the supermarket shelf, FUNDAY can capture first-party data, communicate directly with its community and build stronger engagement with its growing base of fans.

The value exchange at the heart of loyalty

For consumers, loyalty programs are ultimately about value. Points, rewards, experiences or services provide the motivation to participate.

For brands, however, loyalty programs enable something deeper: visibility.

When customers voluntarily identify themselves to a brand, the relationship shifts from anonymous product purchases to ongoing engagement with identifiable individuals and households.

This visibility allows brands to understand how products are used, how needs evolve over time and what factors influence purchasing decisions. It can inform product development, marketing and innovation. It can also enable more personalised experiences and communications.

As AI increasingly shapes product discovery and recommendation systems, structured first-party data is becoming even more important. Brands that understand their customers directly are better positioned to personalise experiences, build more relevant product content based on user needs and use cases and deliver relevant improved recommendations across digital environments.

What the best CPG loyalty programs do well

Across categories, the most effective brand-led loyalty programs share several common characteristics.

First, they offer value that retailers cannot easily replicate. Retailers typically compete on price incentives and points linked to purchases. Brand-led programs often succeed when they provide different types of value, such as community access, specialised content, experiences, or extended product benefits.

Second, they encourage brand engagement rather than simply rewarding transactions. The most effective CPG loyalty programs motivate customers to interact with the brand by providing reviews, engaging with their social content and more creating a flywheel that strengthens connection, advocacy and growth. The shoppers are already brand advocates. By giving them more reasons to participate, share and advocate, it helps to further extend reach of the brand.

And finally, they create engagement beyond the purchase moment. Whether through DIY communities, parenting resources, cooking content or entertainment experiences, strong programs maintain relationships between purchase cycles.

Loyalty as a relationship strategy

For decades, the shelf was the primary connection between consumer goods brands and their shoppers. Retailers controlled the transaction and the shopper relationship, while brands focused on building awareness and preference through marketing and packaging.

The examples in this article illustrate how that model is beginning to evolve. Through loyalty programs, communities and membership ecosystems, brands are beginning to create their own direct connections with the people who use their products.

For consumer goods companies that have historically relied on retailers to access important insights about their shoppers and influence the lower end of the funnel, these programs represent an important shift.

In a market increasingly shaped by first-party data, personalisation and AI-driven discovery, the brands that understand their customers directly will be better positioned to compete. Loyalty, once synonymous with retail, is becoming an important strategy for brands as well.

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 Arktic Fox partners with brands to design loyalty, lifecycle and data strategies that build stronger direct relationships with their customers. If loyalty is becoming a strategic priority for your organisation, we’d love to continue the conversation.