As inflation bites and AI reshapes commerce, loyalty tools must adapt to remain relevant, help consumers save effectively, and retain utility for small and independent businesses.
The Pressure on Margins
UK inflation remains above target, interest rates continue to stretch household budgets, and consumers are changing how and where they shop. Voucher codes, cashback offers, and loyalty schemes have become essential tools for navigating rising costs. However, while these platforms often promise customer savings, the benefits for the businesses on them are far less clear.
The Legacy Model: Discounts with a Cost
Traditional deals models, pioneered by companies like Groupon and Wowcher, rely heavily on steep discounts and take a cut from each sale. That might deliver a short-lived spike in traffic, but for small businesses, the financial benefits are murky. A 50% discount combined with a 25% commission can leave merchants far in the red. Repeat purchases are rare, and bargain-hunting, cost-focused customers often vanish after a single use.
Boom, Bust, and Burnout in the Deals Space
The broader “deals space” has seen repeated cycles of hype and collapse. Its modern form can be traced to early web-era companies like MobShop and LetsBuyIt.com, both of which folded during the 2000 dot-com crash. Groupon, launched in 2008, repackaged the concept for a new digital audience and quickly scaled into a global giant. At its peak, Groupon was valued at nearly $17 billion.
That success triggered a rush. By 2011, Facebook, Google, and Amazon had all launched their own deals platforms: Facebook Deals, Google Offers, and Amazon Local. Each was pitched by market analysts as a “Groupon killer.” Within a few years, all three had pulled out. Despite their reach, the platforms failed to engage users or deliver meaningful value to businesses. They did not adapt. Their offers were often undifferentiated, visibility was poor, and users showed signs of fatigue from endless, generic discounts.
Aggregation Isn’t Enough
Fast-forward to today, and most major deals platforms are aggregators, earning affiliate fees for listing thousands of similar offers. Large cashback portals like Quidco and TopCashback command wide consumer attention, but the mechanics are familiar: find a discount, click a link, make a purchase. Participation typically giving away precious margin, with little control over data or branding.
A Quiet Shift Toward Smarter Loyalty
Instead of maximising reach at any cost, a newer wave of loyalty platforms is focused on long-term engagement, better margins for businesses, and more meaningful consumer relationships. These tools don’t just deliver a discount, they help businesses build retention, personalise rewards, and sidestep the old commission-heavy systems.
Platforms like Loyalzoo and Stamp Me let merchants run customisable stamp card or points programmes digitally. Others, like Clavaa, link directly to consumer payments, delivering automatic cashback or perks without requiring the user to scan a code or log into another app. Some, like Steppr, are experimenting with progressive loyalty through vouchers that unlock greater discounts over time, with zero commission on voucher purchases. While models vary, what unites these tools is a move away from extractive, one-sided deal structures toward systems where both customer and merchant gain.
The Gifting Advantage
The UK Gift Card & Voucher Association reports the majority of vouchers are now purchased as gifts, and recipients typically spend significantly more than the voucher’s face value. That makes vouchers and their gifting not only a retention tool but a growth channel, particularly for smaller businesses with limited ad budgets.
Enter AI: A New Gatekeeper Emerges
The landscape is also being reshaped by the growing influence of AI, which is already disrupting how consumers discover products and engage with brands. As users rely more on conversational AI tools to search, compare, and receive recommendations, traditional visibility channels like paid search and affiliate listings are under pressure.
This matters deeply for small and independent businesses.
If AI-driven platforms become the gatekeepers of commercial discovery, the format of loyalty mechanisms that integrate into those flows will matter more than ever. It won’t be enough to appear in a coupon feed or cashback site. Offers need to be contextual, timely, and accessible through whatever interface the consumer is using – whether that’s a voice assistant, chatbot, or AI-augmented browser.
Adapting for the Future
For loyalty platforms, this creates both a challenge and an opening. Those that can adapt to AI-powered environments offering structured, machine-readable incentives and seamless redemption flows will be better positioned. Those relying on outdated formats or manual-only interactions with no impetus for a realistic tech roadmap risk falling by the wayside.
A Necessary Option, Not Just a Nice One
So, what are we left with? Small and mid-sized businesses face rising costs on every front, while digital advertising remains expensive and often ineffective. With the UK’s digital ad spend at record highs, many independents are simply priced out of scalable online marketing. Loyalty platforms, especially those that also offer free exposure alongside intelligent retention mechanics, will become increasingly vital. Consumers are changing. Research shows that while they still value rewards, they increasingly expect them to be seamless, frictionless, and emotionally resonant.
A Smarter Path Forward
Whether it’s collecting points at a local cafe, receiving a voucher wrapped in a greeting card, or being offered a discount through an AI assistant that remembers your preferences, loyalty remains a powerful driver of behaviour. The key is delivering it in ways that feel intuitive and fair, and that respect the economics on both sides while fitting modern technologies.
Angela Spearman is a journalist at EzineMark who enjoys writing about the latest trending technology and business news.
