The loyalty program paradox
According to US data, businesses lose 15% of their customer base annually. Acquiring a new customer costs 16 times more than retaining one. Yet 68% of Millennials say they need a loyalty program to keep buying from a brand.
On the surface, loyalty programs are thriving. But there's a problem: most of us carry a dozen or more cards and are enrolled in dozens of email programs. How many do we actually use?
Traditional card-based loyalty programs feel like relics of a pre-mobile era.
Apps are replacing plastic
Meanwhile, loyalty app adoption is explosive. In 2019, loyalty program penetration reached 60%, with users enrolling in an average of 8.6 programs simultaneously. This growth isn't coming from new card programs—it's coming from mobile apps.
LIDL Plus launched with approximately 320,000 monthly installs. Żappka hit 250,000 monthly installs. Established programs have caught on too: Rossman, Empik, Superpharm, and Payback are all replacing plastic cards with mobile versions. Why? Because the friction disappears. At checkout, customers simply scan a code from their phone—no need to carry a card.
Carrefour took it further with "Mój Carrefour," rolling out Scan & Go functionality—letting customers scan products as they shop, eliminating the traditional checkout altogether.
Engagement transforms with apps
Apps drive dramatically higher engagement than plastic cards. According to the "Loyalty Insight" study by H2H.tech, engagement leaders are LIDL Plus (84% engagement), Klub Rossman (84%), and Żappka (81%)—all app-based.
Why the difference? Apps enable personalization at scale. Rather than generic promotions, each user receives offers tailored to their behavioral profile. This increases both purchase frequency and brand satisfaction.
Żabka built their entire app strategy around this insight. Michał Opacki, Żabka's director of digital solutions, put it simply: "The key to success in current and future loyalty programs is concrete promotions, at concrete prices, directed to concrete people."
Personalization drives results. The most popular loyalty apps in the US—DSW's app, Sephora's "Beauty Insider," and Starbucks—all excel at tailored offers and convenience features.
The journey from install to engagement
Installs are just the start. The real metric is active engagement.
Users join loyalty programs primarily for discounts, special offers, rewards, and cashback. These tangible benefits are easy to understand and quick to demonstrate ("I'll save $5 if I join"). This drives rapid adoption in retail environments like LIDL, Rossman, and Żabka.
But converting an install into sustained engagement requires more. It depends entirely on the quality of the app itself—its features, personalization, and perceived value over time.
Apps that consistently deliver relevant offers, reduce friction in the purchase journey, and create genuine value retain users. Those that treat loyalty as an afterthought do not.
The loyalty program evolution
The transition from plastic to mobile is irreversible. Loyalty programs that move fast—offering multiple benefits, strong personalization, and convenient digital features—will dominate. Those that cling to card-based models will fade.
If you're building or managing a loyalty program, the question isn't whether to go mobile. It's how to make your mobile experience compelling enough that users actually engage with it daily.
