LOYALTY RESEARCH, THEORY & SURVEYS

Reward report. From Christmas Spike to Constant Connection: How Reward Says Retailers Can Turn Festive Peaks into Loyal Customers

Reward’s analysis of 1.4 billion UK transactions shows that while loyalty surges during the festive season, more than half of shoppers disappear by spring—making personalised, value-driven engagement essential for converting Christmas momentum into year-round customer loyalty.

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GLO

Reward’s latest loyalty data suggests that Christmas is no longer just “make or break” for sales – it’s become the battleground for customer relationships that either last all year or vanish by January.

Drawing on more than 1.4 billion anonymised card transactions across 4,000 UK retailers and participating banking partners, Reward’s new report, “Lessons in Loyalty: Turning Festive Peaks into Year-Round Engagement,” paints a sharp picture of how British shoppers are behaving into the 2025 Golden Quarter and beyond.

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Image: Reward

Essentials now dominate – and loyalty is slipping

The first big storyline from the data is that UK households are channelling more of their budget into essentials. According to analysis from Reward’s customer engagement programmes, essential spend now makes up 58% of household budgets, up from 48% just two years ago. 

That shift leaves less room for discretionary purchases and makes consumers far more selective about where they spend what’s left. The impact on loyalty is already visible:

• Only 61% of shoppers returned to the same retailer in 2025, down from 65% in 2024. 

In other words, more than a third of customers are switching retailers over the course of the year – a clear warning sign for brands that have historically relied on habit or convenience to keep people coming back.

Reward’s SVP of Data & Insight, Paul Jones, sums up the mindset change: customers aren’t necessarily spending less, they’re spending smarter – loyalty now has to be earned through relevance and tangible value, not taken for granted. 

Festive peaks: a loyalty surge that doesn’t last

If loyalty is under pressure overall, the Golden Quarter (October–December) is still the moment when reward-led engagement really comes alive.

Reward’s data shows that during this period:

• 31% of all annual rewards are earned, and

• 28% of rewards are redeemed,

a much higher share than any other three-month window in the year.

That makes intuitive sense: customers are buying more, hunting for deals and actively looking for ways to stretch their budget. Loyalty programmes and card-linked offers are a natural part of the festive shopping toolkit.

But the report highlights a serious drop-off once the decorations come down:

• 56% of festive shoppers do not re-engage with brands in Q1 of the following year. 

So while retailers and banks see huge spikes in engagement during peak season, more than half of those “newly engaged” or reactivated customers effectively disappear by March.

That gap between peak-season participation and sustained loyalty is exactly where Reward argues brands need to focus.

Why loyalty programmes are now a core growth lever

With consumers more cautious, Reward describes loyalty programmes as “one of the most effective levers for influencing spend and driving retention.” 

The company sits at an interesting intersection of payments, data and marketing:

• It runs large card-linked loyalty and cashback programmes for major banks and financial institutions, syndicating retailer offers to millions of bank customers.

• It positions itself as a commerce media player, using bank transaction data to connect retailers and banks around a single, data-rich view of the customer and deliver personalised offers at scale.

• That commerce-media model is central to Reward’s argument in Lessons in Loyalty:

Brands that can understand changing motivations in real time and personalise their engagement – across both essential and discretionary spend – are the ones best placed to retain customers in a “spend smarter” world. 

In practice, that means a few things:

1. Using transaction data to understand “true” loyalty – not just sign-ups or app usage, but how often customers actually come back and how much they spend relative to competitors.

2. Targeting value where it matters most – for example, supporting essential baskets when budgets are tight, then nudging towards higher-margin categories when confidence returns.

3. Aligning banks and retailers – combining bank data, retailer offers and loyalty mechanics so rewards feel embedded in everyday spending, not bolted on at checkout.

Turning festive peaks into year-round engagement

So how do brands use these insights to close the Q1 loyalty gap?

While Reward’s full report is gated, the publicly available commentary points to several practical lessons for retailers and banking partners:

1. Treat Golden Quarter data as the start of the relationship

Peak season brings a flood of high-intent customers – many making rare or first-time purchases. Instead of viewing Christmas as a one-off revenue event, retailers can treat it as an intensive data-gathering and onboarding phase:

• Capture consent and preferences at the point of reward, not weeks later.

• Identify which festive shoppers are regular customers in other categories via transaction data.

• Segment customers by value, category mix and channel (online vs in-store) to tailor post-Christmas journeys.

Commerce media platforms like Reward’s make this easier by using bank transaction data to see behaviour beyond a single brand’s own tills. Reward+1

2. Use rewards to cushion essential-spend pressure

With essentials consuming 58% of budgets, many consumers are in “value-first” mode year-round. 

That doesn’t mean they’ve lost interest in brands – it means they’re actively weighing who helps them make their money go further. Retailers and banks can respond by:

• Offering bonus rewards or tailored discounts on everyday categories during lean months (e.g. January and February).

• Positioning cashback and loyalty points as tools to “unlock” non-essentials later – such as using rewards earned on groceries to fund treats or experiences.

• Ensuring that rewards are simple, visible and quick to redeem, particularly for lower-income segments.

3. Personalise beyond promotions

The report stresses that relevance, not just discount depth, drives modern loyalty. 

This lines up with wider customer-experience research: KPMG’s UK Customer Experience Excellence index, for example, finds that brands which excel in personalisation and empathy significantly outperform peers on both revenue growth and profits. 

For retailers and banks, that can mean:

• Timing offers to payday cycles or key annual moments (e.g. back-to-school, energy-bill spikes).

• Reflecting customers’ real-world behaviour – such as rewarding increased switching to value ranges or smaller baskets – rather than pushing irrelevant premium ranges.

• Using machine-learning models to predict when customers are likely to lapse after the festive period and intervening with genuinely useful incentives.

4. Join up bank, retailer and marketing data

Reward argues that commerce media is reshaping the loyalty landscape by joining bank and retailer data into a single customer view, then activating that insight through targeted media and offers. 

In practical terms, this enables:

• Banks to serve highly relevant merchant offers inside their apps, based on where customers already shop.

• Retailers to reach high-intent audiences with lower wasted media spend, as campaigns are targeted using actual purchase behaviour rather than just demographics or browsing.

• More accurate measurement of incremental sales and long-term value from loyalty campaigns.

For customers, the effect should feel simple: their everyday banking and everyday shopping work together to surface the right rewards at the right time.

Global Loyalty Organisation Take:

Taken together, Reward’s Lessons in Loyalty report and related commentary highlight a clear direction of travel:

• Budgets are stretched – essentials dominate and discretionary spend is under pressure.

• Loyalty is eroding – fewer shoppers are sticking with the same retailer year-on-year.

• Festive engagement is intense but fragile – rewards spike in Q4 but more than half of those customers don’t re-engage in Q1.

• Data-driven, reward-led engagement is now mission-critical – particularly where banks and retailers collaborate via commerce media.

For brands, the implication is blunt: winning Christmas is no longer enough. The real prize lies in turning those festive peaks into durable, year-round relationships – and that will be won by the retailers and banks who can see the whole customer, respect their financial reality, and deliver rewards that feel timely, personal and genuinely helpful.

Source: Reward