BackTravel and retail are no longer in separate lanes — they’re merging fast, and the results are lucrative. Arrivia’s research has revealed that 95% of companies now offer loyalty members travel rewards, a significant leap from just 65% in 2022. The rise of travel loyalty programs beyond traditional industries isn’t just a trend; it’s a proven strategy to reshape how these brands drive revenue.
By tapping into this growing intersection, players in the travel and retail industries can leverage consumer habits and brand affinity to power profitable loyalty programs. Even more, brands can begin to unlock fresh travel program revenue streams, expanding their reach and strengthening customer engagement. Let’s explore how these programs bridge industries in unexpected ways.
The Synergy Between Travel and Retail Loyalty
Whether in retail or travel, consumer behaviors and preferences are strikingly similar. Across industries, 53% of consumers favor cashback loyalty rewards, while 50% prefer discounts to save on purchases. Travelers mirror these priorities, often redeeming points to cut travel costs (46%), booking discounted trips (31%), and applying provider discounts (29%) through loyalty programs.
“It’s no secret that for millennials and Gen Z, travel is extremely important, with nearly half of those born between 1981 and 1996 saying that it’s a top goal of theirs in the short term,” says Jeff Zotara, Chief Marketing Officer at arrivia. “Offering rewards and perks that enable these generations to live out their travel aspirations is a no-brainer, particularly for those retailers looking to boost overall loyalty program spend and enable greater profitability through increased customer lifetime value.”
By blending the best of both worlds, retail integration in travel loyalty programs can help brands meet the shared demand of these customers. Millennials and Gen Z demand meaningful rewards that align with their lifestyles and aspirations, making cross-industry loyalty programs a natural fit. The result? A unique opportunity for various brands to maximize loyalty while increasing profits.
Many programs are already capitalizing on this synergy by embedding member-exclusive retail offers within their travel loyalty ecosystem and vice versa. Examples include:
- Retail points: Enable members to earn points on retail purchases to redeem for travel perks, fostering continuous engagement.
- Co-branded rewards: Partner with retailers to offer dual-benefit rewards, like discounts or exclusive products for loyalty members.
- Cashback incentives: Provide cashback options for retail spending, which are usable on either future travel bookings or retail purchases.
Benefits of Travel Loyalty Programs as Retail Strategies
How can travel loyalty programs benefit retail strategies? The better question is, how can they not?
“A loyalty program with an attractive portfolio of travel rewards has the flexibility to engage and reward members in various ways … which can be a critical tool for maximizing customer lifetime value (CLV),” explains Zotara. After all, co-branded travel credit cards alone are currently used by nearly one-third of consumers, demonstrating the success of travel loyalty as a retail strategy.
“With this type of partner, retailers are empowered to go beyond a basic promo code for travel to become travel platforms in their own right. They can use the promise of discounted travel to attract members to their loyalty programs and create delightful booking experiences that keep members earning points and driving revenue, regardless of their core business,” continues Zotara.
Speaking of increasing revenue through loyalty programs, more than half of brand leaders with strategic partnerships (54%) report that collaborations are responsible for over 20% of their total company revenue, and 69% see additional sales potential through partner perks. In other words, harnessing travel loyalty as a retail strategy is a gateway to better relationships and revenue.
Retail Integrations That Drive Loyalty Program Success
At this point, you may be wondering, “What are examples of successful cross-industry loyalty initiatives?” One of the most obvious is the partnership between Starbucks Rewards, the loyalty program for the popular Starbucks coffee chain that boasts 34.3 million active U.S. members, and Delta SkyMiles, the 130 million-member strong travel loyalty program for Delta Airlines.
Consumers who link their Starbucks Rewards and Delta SkyMiles loyalty accounts can unlock exclusive promotions and unique experiences, earn miles on reloads of $25+ in their Starbucks Rewards accounts and collect Double Stars on Starbucks purchases on Delta travel days. Diamond and Platinum SkyMiles Members can also select 4,000 Stars as one of their annual Choice Benefits. The dual point redemption for retail purchases benefits both companies plus their loyal customers.
Another popular brand using travel loyalty as a retail strategy is Costco, which offers the co-branded Costco Anywhere Visa® Card by Citi. The 137 million Costco members can earn cashback on all purchases, including 3% back on travel purchases. There’s also Costco Travel, which offers hotels, cruises, and other travel products, such as planned itineraries, at members-only discounted prices.
How to Build a Profitable Loyalty-Driven Retail Strategy
Integrating retail offers into travel loyalty programs — and vice versa — requires more than just a clever idea. It demands a collaborative partnership. How can travel brands create retail partnerships through loyalty programs? The first step is to identify a brand with mutual value, and the next is to invest in technology to facilitate easy access to member data and available rewards.
Identify a Relevant and Reliable Program Partner
Successful retail integration in travel loyalty programs begins by finding partners who complement your brand and resonate with your audience. Choose companies — whether airlines, hotels, or retailers — whose offerings align with your customers’ needs. Mutual value is key: both brands should benefit from increased engagement and shared access to loyalty member spending.
Additionally, focus on partners with a reputation for delivering high-quality experiences. A proven track record of customer satisfaction ensures that your cross-industry collaboration strengthens your brand affinity and forges trust. When executed properly, hybrid loyalty strategies improve the membership experience, boosting customer lifetime value (CLV) and driving additional revenue.
Incorporate Loyalty Program Technology (and Data)
“According to our survey, 21% of consumers of loyalty programs with travel rewards are frustrated by difficult or complex processes to earn and redeem points or miles, while just 14% of brands think this is what consumers find most frustrating,” explains Zotara. “Fortunately, loyalty program technology focusing on travel rewards and booking capabilities can help close this expectation gap.”
By investing in third-party loyalty program technology, such as arrivia, you can integrate travel perks with your existing tech stack for seamless reward redemption. Consider arrivia’s white label travel portal, a customizable platform that allows you to offer comprehensive travel booking services and enable your loyalty members to redeem rewards points under your own brand.
Measuring Success in Loyalty-Driven Retail Strategies
The right tools and technology are essential to evaluating the success of travel loyalty programs. A robust customer relationship management (CRM) system is a must to centralize member data, track interactions, and analyze the impact of loyalty rewards on consumer behavior. These insights make it far easier to refine your loyalty strategies and maximize program effectiveness over time.
With the help of the resulting customer loyalty analytics, you can focus on key performance indicators (KPIs) that support loyalty-driven retail growth, such as:
- Revenue growth: Measure increases in sales directly tied to travel loyalty program participation.
- Member retention: Track how well your program keeps loyalty members engaged over time.
- Engagement rates: Assess member activity, from logging in to accounts to interacting with rewards.
- Reward redemption: Monitor how often members redeem points or perks to gauge program appeal.
Begin Leveraging Travel Loyalty Programs as a Retailer
Travel loyalty programs offer a unique dual potential: enhancing customer experiences — and engagement — while elevating revenue for both travel and retail brands. By aligning with promising partners and embracing innovative technologies, your brand can build a profitable loyalty program that unlocks new opportunities to strengthen customer relationships and scale membership rates.
Ready to elevate your loyalty program? Discover how arrivia’s travel rewards solutions can help you power profitable strategies across travel and retail industries today.
