With AI accelerating gamification at scale, grocers gain new opportunities to engage customers
Gamification isn’t a new concept for U.S. grocery retailers, but it remains an underutilized strategy compared to their international counterparts. European retailers like Tesco and Carrefour are deploying advanced gamified loyalty initiatives, while American grocers are largely missing an opportunity to drive repeat traffic, increased basket size and more lasting customer connections by relying on standard promotional models. Traditional methods like discounting and point accrual might seem effective in a persistent inflationary environment, but as consumers continue to be selective about how and where they spend their grocery dollars, American retailers should be exploring new ways to build engagement – and gamified loyalty initiatives are a good place to start. The good news is, AI is now making this strategy more attainable than ever.
Emotional Connections Trump Transactional Value
Most U.S. grocery markets are crowded and competitive, packed not only with other grocers but Big Box stores, discounters and specialty retailers. In fact, the Institute of Grocery Distribution (IGD) predicts that global discount grocery sales will grow by $217bn through 2029, highlighting the increased competition grocers face in nearly every market. Grocery retailers need a way to stand out, and gamification helps differentiate them from other retailers that emphasize transactional discounts. It also helps them set their loyalty programs apart from traditional schemes that offer little more than points that accumulate toward future discounts. Both broad-based discounting and basic loyalty frameworks fail to leverage the deeper psychological drivers that can really influence shopping behavior.
Gamified marketing strategies, aided by AI, motivate consumers to build behavioral habits that drive long-term loyalty by introducing elements of achievement, progress tracking, and social recognition. When customers purchase the final bag of ground coffee to complete a challenge, add the right assortment of branded products to their ecommerce cart to close a digital “ring,” or even finish their 20th shopping trip to reach a new membership milestone, they experience a sense of accomplishment that carries over to their perception of the retail brand itself. These emotional connections are naturally more resonant than price incentives.
The psychological principle of variable reward schedules makes gamified experiences particularly effective at driving repeat behavior. Unlike predictable discounts, gamification introduces an element of surprise and discovery that keeps customers engaged over time.
This sustained engagement leads to increased visit frequency and higher customer lifetime value (CLV).
Building a Positive Brand Experience
To further boost CLV, grocery retailers need scalable strategies that contribute to a positive brand experience. Given the increase in both brick-and-mortar and online competition, consumers can choose from many stores offering similar products at comparable prices. In this environment, the shopping experience itself becomes paramount, not only as a brand differentiator but as a driver of loyalty.
Gamification allows retailers to create memorable experiences. AI helps them deploy gamification at the scale necessary to create a competitive advantage. With AI dynamically generating personalized challenges and integrating relevant interactive elements into their loyalty programs, retailers can transform any routine grocery trip into a (literally) rewarding experience that helps solidify brand preference.
AI is also making gamification at scale attractive – and achievable – for retailers of all sizes. Whether implemented through mobile apps, in-store technology, or hybrid approaches, AI-powered gamification can be adapted to fit different budgets and operational capabilities. This flexibility allows both national chains and regional players to reap the benefits of gamification and curate their own branded shopping experiences to compete against more commoditized retail offerings.
The Virtuous Cycle of Customer Data
Retail brands both big and small benefit from the data generated by their loyalty programs. By integrating gamified elements into those programs, retailers can capture more (and more valuable) behavioral data that helps optimize marketing efforts and improve targeting efficiency. Gameplay encourages more frequent interaction, as customers check their progress or activate new challenges. But gamification also provides more specific insights into how customers respond to different types of incentives and how those incentives influence shopping patterns.
This behavioral intelligence is a rich data asset, and it opens up all kinds of possibilities for grocery retail marketers. Rather than guessing what might motivate broad customer segments, retailers can use game-generated data (along with AI and machine learning) to design personalized challenges and rewards that align more precisely with individual behaviors, preferences and triggers.
Gamification in Action: Retail Success Stories
Tesco’s Clubcard Challenges is an excellent example of personalized gamification executed at scale within an existing loyalty framework. By creating personalized “challenges” for millions of customers who participate in the initiative, Tesco has successfully increased engagement rates while gathering detailed insights into shopping behaviors. It has also encouraged additional investment from CPG brands, as Challenges offers proven ROI and greater attribution of promotional spend to sales than more traditional marketing tactics. The success of Tesco’s program has inspired similar initiatives across the industry, demonstrating the scalability and effectiveness of the approach.
Instacart’s Caper Cart technology represents another example of gamified retail in action. By integrating interactive elements directly into the shopping process, these smart carts create real-time engagement opportunities that bridge digital and physical retail environments. It shows how gamification can be woven across related but disparate shopping interactions, creating a more cohesive experience for the customer.
Tesco’s Clubcard Challenges and Instacart’s Caper Carts are proof positive that gamification can deliver cross-channel sales lift and demonstrable business impacts. Some American retailers, including Albertsons, Walmart, and Save Mart, have begun to take notice, and are incorporating game-inspired features into their loyalty programs. These implementations span various formats, from mobile app challenges to in-store interactive experiences, proving that gamified marketing can be successfully adapted across different retail environments.
It’s Time to Get in the Game
With all of these gamification success stories, the question isn’t whether more U.S. grocery retailers should be pursuing this strategy for their loyalty programs, but whether they’ll seize the opportunity to build loyalty, boost engagement and differentiate their brand experiences before their competitors do.
The technology necessary to implement gamified loyalty initiatives at scale exists, and it’s within U.S. retailers’ grasp. The consumer appetite for more personalized and engaging shopping experiences – precisely the kind of experiences gamification can deliver – is well-documented and surging. The results speak for themselves.
All that remains is emulate the approaches taken by international retail brands and embrace gamification to the fullest. Brands like Tesco have laid the roadmap, now it’s up to American retailers to follow it. It’s time to get in the game.
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Jeff Baskin, Chief Revenue Officer at EagleEye
Jeff Baskin is a seasoned senior executive leader with over 20 years of experience in the technology sector, specializing in grocery, convenience, restaurant, and big-box retail industries. Jeff’s expertise lies in omni-channel strategies and the full spectrum of digital retail ecosystems, including eCommerce, loyalty programs, mobile platforms, digital marketing, and marketplaces. He has created partnerships with some of the world’s largest retailers to optimize the customer experience, in-store operations, digital programs, and streamline supply chain solutions.
