Loyalty Data Is Now AI’s Favorite Currency

Loyalty programs were built to reward past spending. The purchase histories, preferences and engagement signals inside them are now among the most actionable first-party data assets a retailer owns. As third-party tracking grows less reliable and artificial intelligence shopping assistants become a primary discovery channel, retailers that built loyalty programs for the points economy are now rebuilding them for the AI economy.

The shift is showing up in how retailers are connecting loyalty data to AI infrastructure. Ulta Beauty, which has more than 46 million loyalty members accounting for approximately 95% of company sales, partnered with Google in April to embed its assortment inside Google’s AI Mode in Search and the Gemini app, Ulta Beauty announced. The same loyalty data feeds Ulta AI, a proprietary shopping assistant built on Gemini Enterprise for Customer Experience that is live on Ulta.com.

Sephora launched an app inside ChatGPT in March 2026 that lets users access their Beauty Insider loyalty profiles through conversational AI, according to the beauty retailer’s blog post. Both moves reflect the same premise: loyalty data is the identity layer that lets AI agents recognize customers, personalize recommendations and connect discovery to verified purchase behavior.

First-Party Data Is the Foundation for AI Personalization

The retailers moving fastest are those that have already centralized their loyalty data. Fanatics partnered with Google Cloud to deploy AI-powered product discovery across its digital storefronts, using behavioral data from its loyalty base to surface the right product when purchase intent peaks, PYMNTS reported.

The same logic extends to the tech providers behind loyalty programs. Eagle Eye, which works with major grocery, retail and hospitality brands, built its AIR platform as a real-time loyalty and promotions engine designed to unify customer data, digital offers and transactional systems into a single architecture, according to PYMNTS.

Retailers are chasing the same advantage directly. CVS is turning its first-party loyalty and transaction data into a retail media advantage, connecting loyalty, transaction and behavioral insights to advertising performance across channels, PYMNTS reported. CVS Media Exchange has built a retail advertising business on 90 million customer relationships spanning beauty, health, wellness and personal care. “That relationship plus the loyalty plus the transaction data really sets retail media apart from any other medium,” Parbinder Dhariwal, vice president and general manager at CVS Media Exchange, told PYMNTS CEO Karen Webster. “Not even social media is able to piece all of those constituents together.”

The common thread is first-party data. A loyalty program that has collected verified purchase behavior for years has something a general-purpose AI model cannot replicate: a confirmed record of what a specific customer actually bought, when, at what price and how often. That record is what allows a personalization model to move beyond demographic targeting into behavioral prediction.

AI Personalization Is Now Table Stakes, Not a Differentiator

The competitive pressure extends beyond retail. Mastercard is using generative AI to curate offers for individuals based on a 360-degree view of transactional, zero-party and first-party data, Jill Moser, senior vice president of offers and loyalty at Mastercard, told PYMNTS.

Avery Miller, Visa’s vice president and head of global loyalty for value-added services, and Kipp Johnson, a senior director of AI solutions at Braze, described personalization as now “table stakes” in loyalty, with the real differentiator being context, relevance and the ability to use AI to orchestrate individualized customer journeys across the full lifecycle, PYMNTS reported.

That shift is already visible in how consumers behave. More than 6 in 10 U.S. consumers used dedicated AI platforms including ChatGPT, Claude and Gemini in the past year, with power users increasingly replacing legacy shopping behaviors rather than supplementing them, PYMNTS reported. The loyalty program that once rewarded past spending is now being engineered to shape the next decision before the consumer has finished searching.