For years, retailers have relied on discounts to drive customer loyalty, but as consumer expectations evolve, traditional price-based incentives are losing their impact. In an era where brand loyalty is increasingly fragile, retailers need to rethink their strategies to offer rewards that resonate on a deeper level. A recent study from Arrivia suggests that travel rewards might be the missing link in modern retail loyalty programs.
The End of Discount-Driven Loyalty?
Discounts have long been the backbone of loyalty programs. However, they often fail to create meaningful engagement or differentiation. Discounts commoditize brand relationships, making it easy for customers to switch to a competitor offering a similar deal. Moreover, as inflationary pressures squeeze margins, many retailers are finding it increasingly difficult to sustain deep discounting strategies.
Today’s consumers, particularly Millennials and Gen Z, seek experiences over transactional benefits. According to Arrivia’s study, 49% of consumers are more likely to engage with a loyalty program that offers travel rewards, signaling a clear shift toward experiential incentives. If retailers want to build lasting relationships, they must move beyond discounts and explore rewards that align with their customers’ lifestyles. 
Travel Rewards: A Strategic Opportunity for Retailers
Arrivia’s report highlights the potential of travel rewards as an underutilized tool in retail loyalty. While nearly 80% of U.S. consumers travel between one and three times per year, key customer segments—such as those purchasing luggage (39%) and outdoor/adventure gear (67%)—travel even more frequently. By offering travel perks, retailers in specific categories can tap into this behavioral pattern to deepen engagement and increase retention.
Retail Sectors That Stand to Benefit
Certain retail sectors have a natural affinity for travel rewards. Arrivia’s findings indicate that integrating travel perks into loyalty programs can lead to stronger emotional connections and increased sales. Some of the key sectors include:
- Luggage Retailers
Luggage and travel go hand in hand. According to the study, 89% of luggage buyers express strong interest in booking travel through their loyalty program, and 75% are willing to reinvest points into brand purchases. This creates a compelling case for luggage retailers to offer travel incentives such as airline and hotel discounts, waived baggage fees, or even exclusive travel packages. Instead of competing on price, luggage brands can create a unique value proposition that extends beyond the point of purchase. - Outdoor & Adventure Brands
Outdoor enthusiasts have a built-in inclination toward travel, making them prime candidates for adventure-based rewards. Arrivia’s research shows that 66% of outdoor consumers are highly likely to book travel through their loyalty program, and 62% would redeem points for brand purchases. Brands in this space can differentiate themselves by offering eco-tourism experiences, guided adventure trips, or discounts on outdoor destinations. This approach not only strengthens brand loyalty but also reinforces the lifestyle-driven nature of the brand. - Health & Wellness Brands
The wellness industry has seen a surge in demand for experiences that promote relaxation and well-being. Travel perks such as wellness retreats, spa packages, and mindfulness getaways align perfectly with the interests of health-conscious consumers. Arrivia’s study found that 64% of this demographic are very likely to book travel through a loyalty program, making this a ripe opportunity for brands looking to enhance engagement through experiential rewards. - Furniture Retailers
While furniture purchases are often seen as one-time investments, the study highlights an opportunity to drive repeat business through travel rewards. 63% of furniture buyers expressed interest in redeeming loyalty points for additional brand purchases, suggesting that travel-based incentives could keep these customers engaged and coming back for complementary home decor or renovation projects.
Why Travel Rewards Work
The success of travel rewards in retail loyalty programs can be attributed to several key factors:
- Emotional Connection: Unlike discounts, which are purely transactional, travel rewards create emotional experiences that forge deeper bonds with the brand.
- Aspirational Appeal: Travel is a highly aspirational reward, often perceived as more valuable than a simple percentage off a purchase.
- Cross-Industry Engagement: Travel rewards open up opportunities for co-branded partnerships, allowing retailers to collaborate with airlines, hotels, and tourism providers for added value.
- Customer Retention: By offering rewards that integrate into customers’ lifestyles, brands can foster long-term engagement rather than one-time transactions.
Generational Trends: The Rise of Experience-Driven Loyalty
Millennials and Gen Z are shaping the future of loyalty programs. These generations prioritize experiences over material goods, making them ideal targets for travel-based incentives. The study found that 63% of Millennials and 60% of Gen Z show strong interest in travel rewards, reinforcing the need for retailers to rethink their loyalty strategies.
Additionally, families with children are particularly receptive to travel rewards. With 39% valuing flexible payment options compared to 26% of the general population, retailers that integrate flexible travel perks into their loyalty programs can cater to this high-value demographic.
The Road Ahead for Retail Loyalty
As competition for customer loyalty intensifies, retailers must innovate beyond traditional discounts. The integration of travel rewards presents a significant opportunity to differentiate loyalty programs, drive engagement, and build long-term brand affinity.
To successfully implement travel-based incentives, retailers should consider the following steps:
- Align Rewards with Brand Identity – Travel rewards should complement the brand’s core offerings. For example, a fitness brand might offer wellness retreats, while an outdoor retailer could focus on adventure travel.
- Personalize the Experience – Not all customers travel the same way. Offering tiered or customized travel perks based on customer preferences will enhance engagement.
- Leverage Strategic Partnerships – Collaborating with travel brands, airlines, and hospitality companies can help retailers offer high-value rewards without shouldering the full cost.
- Educate Consumers – Many loyalty members are unaware of alternative rewards beyond discounts. Retailers should invest in marketing efforts to communicate the value of travel perks effectively.
- Monitor Performance and Adjust – As with any loyalty strategy, data-driven insights should guide optimization efforts to ensure travel rewards resonate with customers.
What’s Next
Retailers are at a turning point in their loyalty strategies. The discount-driven model that has dominated for decades is showing signs of fatigue, and experience-based incentives are gaining traction. Arrivia’s report underscores the growing consumer demand for travel rewards and highlights the strategic advantages they offer across various retail sectors.
By integrating travel incentives into their loyalty programs, retailers can create more meaningful, emotionally driven relationships with customers. This shift is not just a competitive advantage—it’s a necessity for brands looking to thrive in the next era of customer loyalty.
To dive deeper into the findings, download the full report from Arrivia and explore how travel rewards can elevate your retail loyalty strategy.
Photo by Austin Distel on Unsplash
