How retail incentives will evolve in 2026
Loyalty is moving up the C-suite agenda, and the momentum behind it has never been stronger. Engagement with loyalty schemes was already surging in 2025, with the UK seeing a sharp increase in program participation as 80 percent of consumers actively engaged in at least one scheme. This was particularly apparent over Black Friday, when retailers using Talon.One’s platform saw loyalty program enrolments double compared to 2024.
As 2026 unfolds, loyalty schemes are becoming an even greater mechanism for ongoing customer engagement. Here are three key ways I expect retailers’ approach to loyalty and incentives to evolve in the coming year.
Loyalty and promotions converge into a single strategy
As competition for consumer spend intensifies, retailers are reassessing how they attract and engage customers in a sustainable way. Rather than treating promotions and loyalty as separate tools with different objectives, more retailers are bringing them together to create joined-up, personalized incentives that reward consumers and deliver return on investment.
During Black Friday 2025, brands such as Sephora, Adidas and ASOS reserved their best promotions for loyalty program members – and will have persuaded more members to sign up as a result.
In 2026, we expect increasing numbers of retailers to realise the benefits of a holistic approach and break down existing siloes. In fact, research conducted with Harvard Business Review shows that 60 percent of enterprise brands plan to further integrate promotions and loyalty in the year ahead.
In today’s market, this is a no brainer for brands. And for retailers that follow through, the result will be a single, powerful lever for driving profitability and building long-term customer loyalty.
Gamification becomes a core engagement layer
When it comes to customer engagement and long-term loyalty, transactional earn and burn techniques don’t always hit the mark. Increasingly, brands are turning to gamification as an opportunity to engage consumers in more emotive ways – using game mechanics to create moments of interaction that feel rewarding in their own right.
A successful example is Sephora’s Beauty Insider challenges, which use progress tracking, goals and surprise rewards to delight customers and encourage repeat engagement.
The key is relevance. Gamification is most effective when it reflects the brand’s identity and delivers clear value to the customer. When done well, it creates non-transactional touchpoints that deepen brand connections and a sense of belonging.
This year, I hope to see more retailers adopting this approach, designing experiences that invite customers to have fun, explore and return.
Promotional messaging becomes more selective and purposeful
At the same time, retailers are taking a harder look at how they communicate. With average email click-through rates sitting around two percent, it is increasingly clear that sending more messages does not translate into better engagement or stronger loyalty.
In the year ahead, many brands will move away from blanket promotional emails in favor of fewer, more considered interactions. Loyalty data will play a critical role here, helping marketers tailor messages based on behavior, preferences and intent rather than broad segments.
Brands that shift their focus from frequency to relevance will be the ones building genuine, lasting connections – and increasing return on investment.
Taken together, these shifts show why a smarter loyalty-first mindset will be one of the defining drivers of retail growth in 2026. As C-suite executives increasingly adopt a more holistic approach to promotions and loyalty and focus on the ways to drive real engagement through gamification and relevant communication touchpoints, loyalty programs will become more sophisticated, data-led and strategic.
Sam Panzer
Sam Panzer is Director of Industry Strategy at Talon.One. Talon.One is the most powerful incentives engine that unifies loyalty, promotions and gamification into one holistic platform. Backed by enterprise-grade security and scalability, Talon.One empowers companies to build personalized, profitable promotions and loyalty programs using any data. The world’s most-loved brands including Adidas, Sephora and Carlsberg work with Talon.One to drive deeper engagement and lasting loyalty with their customers. Founded in 2015, the company has a global reach with teams in Berlin, London, Boston and Singapore, and over 270 clients across North Ame