Study Finds Rewards Drive Bigger Baskets – and Brand Switching

A new 2026 study from XCCommerce found that 46.8% of shoppers buy more than planned or switch brands when redeeming rewards. The data suggests promotions are no longer just loyalty tools. They actively drive incremental spend, especially when offers are simple, timely, and delivered through owned channels like email and text.

StreetFight spoke with XCCommerce CEO Danny Rosenoff about what this means for local and regional retailers navigating tighter margins, rising AI adoption, and growing pressure to deliver value without eroding trust.

The study shows that nearly 80% of shoppers are most motivated by simple percent- or dollar-off promotions. For local retailers with limited budgets, how should this influence day-to-day promotional strategy versus more complex offers?

Simplicity still drives action. Shoppers understand percent and dollar-off offers easily, and that clarity matters more than cleverness when budgets are tight.

The challenge is assuming simple means unsophisticated. Retailers may not need more complex rewards – they need better control over where, when, and to whom the offers show up. A straightforward discount that’s relevant, timely and works seamlessly at checkout will outperform a more elaborate offer that creates friction, confusion and/or channel conflict.

A significant risk for retailers is operational complexity. When even basic offers are hard to execute or inconsistent across channels, margin and trust erode quickly.

How can brick-and-mortar retailers communicate value more effectively at the local level, especially in-store and at checkout?

Shoppers aren’t saying price doesn’t matter, they’re saying price alone isn’t enough. “Best value for quality” is about confidence, trusting that the product quality is worth it, and the retailer is being fair and consistent to brand.

At the local level, that gets communicated in the moments closest to purchase. In-store signage, shelf tags, and checkout messaging should reinforce why something is a good value, not just that it’s on sale – whether that’s quality, freshness, local sourcing or relevance to the shopper’s needs. Consistency is critical. When the value, price, and incentive all line up exactly as promised, trust and loyalty are built.

Checkout is especially important because it’s where the value is either confirmed or lost. When offers fail and don’t apply correctly, or feel inconsistent, the reaction is immediate and emotional. Shoppers don’t just question the offer; they question the brand and retailer.

Email and text messages were the top channels where shoppers notice offers. What does this say about the continued importance of owned channels for local and regional retailers compared to paid media?

Owned channels are still very impactful to shoppers’ behavior. Email and text work because they’re permission-based, familiar, and are already part of how shoppers interact with brands they trust.

Paid media can drive awareness, but it’s expensive and increasingly crowded. Owned channels let retailers communicate value directly, consistently and at a much lower cost, especially when messages are timely and relevant. A well-timed text or email tied to real shopping behavior often does more than a broad paid campaign ever could.  We encourage retailers to conduct A/B testing continuously to ensure their marketing and promotion dollars are being allocated most efficiently.

What guardrails should local retailers put in place to use customer data responsibly while still delivering meaningful value?

Retailers need to balance personalization with trust. The first guardrail is transparency: be clear with customers about what data is being collected and how it will be used. Consent is critical. Customers should have control over their data and the ability to opt in or out easily.

Second, minimizing data is key. Collect only what’s necessary to deliver value, such as relevant offers or loyalty rewards, rather than hoarding information for unknown reasons.

Third, robust security and privacy practices must be in place to protect against data breaches or misuse.

What are the most common mistakes you see local retailers make when designing or promoting loyalty programs?

One of the most common mistakes we see is retailers designing loyalty programs that are too generic or transactional, rather than truly customer-centric. Many programs focus solely on points or discounts without considering the overall experience or how the program can drive meaningful engagement and mutual value. We see this as consumers and recognize the programs that stand out from the standard cookie-cutter experiences.

Another is the underutilization of data. Retailers have a wealth of customer information but fail to use it to personalize or predict behavior, which limits the program’s overall impact.

Finally, inconsistent execution across channels can erode trust and frustrate customers. Loyalty rewards programs only work when they’re seamless, relevant, and integrated into the entire shopping experience.

How do you see AI realistically being adopted by local retailers in the next year without alienating customers?

AI adoption for retailers over the next year seems to be less about flashy automation and more about smart enhancements that improve overall customer experience. Retailers are using AI to personalize rewards, optimize, or predict buying patterns without being intrusive. XCCommerce data shows customers are responding favorably when AI improves convenience, relevance or speed as we are seeing with some of the agentic services.  However, shoppers will push back if it feels like surveillance. The most successful implementations will be subtle, data-driven tools that support human decisions, enhance engagement, save time and strengthen loyalty.