Distributed Loyalty: Why Your Customers Are Loyal Neither to Your Chain Nor to the Brands They Buy

Today’s consumers no longer see themselves as loyal. They compare options, optimize rewards, and participate in multiple loyalty programs simultaneously. Their loyalty is not exclusive—it is distributed across several retailers and multiple brands at the same time.

At first glance, this may sound like bad news for retailers.

But it also reveals a significant opportunity.

“Loyalty can no longer be viewed as automatic allegiance or as a direct consequence of affection for a brand.”

The Consumer Who No Longer Identifies as Loyal

A recent regional study conducted across five Latin American countries found that consumers no longer perceive themselves as loyal to a single brand. Instead, they see themselves as empowered decision-makers: informed, selective, and focused on maximizing value.

Most consumers belong to multiple loyalty programs simultaneously—not because they are indecisive, but because they have developed their own strategy. Today, comparing options and optimizing benefits is simply a smarter way to shop.

“Consumers participate in multiple loyalty programs at the same time, reinforcing the idea of distributed rather than exclusive loyalty.”

The Margin Opportunity Hidden Within Distributed Loyalty

In Europe, one particular lever has proven remarkably effective at capturing a portion of this fragmented attention: private label brands.

Spain currently leads Europe in private-label market share, with private labels accounting for 55.3% of total sales volume, just behind Portugal (57.2%) and Switzerland (57.3%).

The reason goes beyond price. Retailers typically earn margins of 15%–20% on manufacturer brands, compared with 25%–40% on their own private-label products.

“Private labels generate higher margins and strengthen customer loyalty by creating differentiation between retail chains.”

For a retailer, every additional point of private-label penetration represents more than market share.

It represents additional margin.

The Opportunity to Decide Which Margin You Capture

This raises a question that few Commercial Directors ask often enough:

If customers are willing to shift their purchases toward whichever option offers the right incentive, which products are you choosing to promote?

The answer is not limited to private labels.

Any category or brand that delivers higher margins for the retailer can become the focus of additional incentives within a Best Customer Marketing strategy.

The decision of what to encourage is no longer a merchandising detail—it becomes an active profitability lever.

Instead of waiting for customers to eventually discover your private-label products or higher-margin categories on their own, the right strategy places those products directly in their path—at the precise moment when they are already looking for a reason to try something different.

Turning Fragmentation Into Discovery

The challenge is that products can only grow if customers discover them.

And this is where distributed loyalty transforms from a problem into an advantage.

A consumer who is already accustomed to comparing alternatives and trying new options is also more willing to discover something different when the incentive is compelling.

We saw this firsthand in a Best Customer Marketing campaign implemented in Latin America.

By offering additional rewards for purchasing selected brands within a purchase-based accumulation program, more than 50% of participants chose products they did not normally buy, simply because those products were highlighted at the shelf.

The very fragmentation that concerns many retailers became the catalyst that enabled behavioral change to happen so quickly.

The Strategic Implication

If customers are no longer loyal by default, the right response is not to lament it.

The right response is to design incentives that encourage them to choose the brands and categories that generate the highest margins for your business—at the exact moment they are already open to trying something new.

Distributed loyalty is not the end of customer loyalty.

It is a different form of loyalty—one that rewards retailers capable of guiding customer choice rather than assuming it.

If you would like to explore how a Best Customer Marketing strategy can accelerate adoption of your highest-margin products and categories, let’s talk.

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Sources

• VML Consulting. Loyalty Pulse LATAM 2026. Regional study on customer loyalty and loyalty program participation across Argentina, Mexico, Colombia, Chile, and Peru.

• NielsenIQ / PLMA. 2026 Report on the Status of Private Label. Data on private-label market share across Europe.

• Kantar. The Top Five Retailers Now Account for More Than Half of Spain’s Grocery Market Share.

• Abasto. Private Labels: An Alternative for Supermarkets. Analysis of margin differences between national brands and private-label products.