Loyalty, a recent history. A quick look back to in 2018
- In 2018, hospitality loyalty was gathering momentum, particularly among the larger chain brands.
- The UK hospitality market was growing steadily - worth £130 billion.
- However, challenges loomed:
- Brexit created staff shortages.
- Rising costs pressured margins.
- Customers shifted toward more unique, high-quality experiences, impacting traditional chains.
- Brexit created staff shortages.
This pushed brands to embrace loyalty and invest in digital tools.
- 80% of the UK population had smartphones (now 95%).
- Big retail loyalty programs (Tesco, Sainsbury’s) were showing real success.
- Hospitality brands like Starbucks, Nando’s, and Wetherspoons were emerging as loyalty and app leaders.
- Pepper onboarded brands like Young’s, Revolutions, Peach Pubs, Itsu, and Rick Stein.
Fast Forward: 2020 to Today
- 2020: COVID-19 redirected focus to Order & Pay and delivery.
- 2023-2025: Loyalty has roared back.
Key drivers for the loyalty resurgence:
- The Death of Cookies:
With the end of third-party cookies (Firefox & Safari already phased out, Google by EOY), first-party data collection - like loyalty programs - became essential. - Tougher Competition:
Brands need new ways to add value, drive return visits, and stand out. - Mass Adoption:
Most major hospitality brands are now offering digital loyalty (e.g., Wagamama, Stonegate, Tortilla). - Better Tech:
Integration across POS, order & pay, CRM, delivery, back-of-house, etc has improved dramatically - making loyalty journeys slicker for guests.
Why Loyalty is More Critical Than Ever
- A 5% increase in customer retention can drive 25–95% more profit (The Loyalty Effect).
- 81.9% of brands with loyalty programs plan to increase investment by 2027.
- One-third of brands without loyalty programs plan to launch them by 2027.
- Customers are 26% more likely to shop repeatedly with loyalty-offering brands.
- 86% of loyal customers recommend their favourite brands.
➔ Loyalty is no longer a "nice-to-have" - it's a key driver of sustainable growth and customer relationships in hospitality.
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