Loyalty is dead.

Belonging is what replaced it. Brands have spent decades and billions building loyalty programs on a flawed premise. Consumers were never as loyal as the data suggested. And the ones who are don't need a program to stay.

Walk into any marketing strategy review and you will hear the word loyalist used with confidence. Loyalists are the people who buy us repeatedly, recommend us unprompted, and forgive us when we get things wrong. They are the crown jewels of the customer base. The ones we must protect at all costs.

The problem is that in most categories, loyalists are largely a fiction. What the data identifies as loyalty is, more often than not, inertia. Habit. Availability. Frequency. The absence of a sufficiently compelling reason to switch. The consumer who buys the same cereal every week is not loyal. She just hasn't been given enough of a reason to stop.

Give her a better price, a more convenient option, an interesting new product from a brand she's heard good things about, and the loyalty evaporates. Not because she was deceiving anyone. But because it was never really there.

Consumers are not disloyal. They are promiscuous by design.

The modern consumer operates across categories with a portfolio mentality. They have a preference, yes. A default. A brand they reach for first. But they hold that preference lightly and will abandon it the moment something more relevant appears. Price, convenience, novelty, peer recommendation, a better experience at the point of purchase: any of these can tip the decision.

This is not a failure of brand building. It is rational consumer behaviour in a world of expanding choice and shrinking switching costs. When every category has ten credible options and every option is two clicks away, the economics of loyalty fundamentally change. The brands that still think about retention as a function of reward points and tiered discounts are fighting the last war.

"Costco charges people for the right to spend money there. And they pay. Willingly, annually, in the tens of millions. That is not a loyalty program. That is membership."

And yet. Some brands do hold their consumers in a way that transcends the transactional. Patagonia customers don't just buy jackets. They wear the brand as a statement about who they are and what they value. Supreme drops sell out in minutes not because the product is objectively superior but because owning it means something about the person who owns it. Peloton, at its peak, wasn't selling exercise equipment. It was selling entry into a community with its own language, rituals, and sense of shared identity.

These brands don't have loyal customers. They have members.

The Costco proof point.

No brand illustrates the membership model more cleanly than Costco. Costco charges people for the right to spend money there. And they pay. Willingly, annually, in the tens of millions. The membership renewal rate consistently sits above 90 percent. Not because Costco has a superior loyalty programme, but because membership in Costco has become part of how a certain kind of consumer thinks about themselves. The rotisserie chicken. The free samples. The sheer scale of the place. These are not features. They are rituals. And rituals are the currency of belonging.

The membership fee is, counterintuitively, part of what makes it work. It creates a psychological contract. I have paid to be here. Therefore I belong here. Therefore this is my store. The fee that should drive consumers away is the thing that binds them most tightly.

No points program has ever produced that effect. Because points are transactional. Membership is identity.

Identity, belonging and the culture beyond the product.

What the best membership brands understand is that consumers are not buying a product. They are buying a way of seeing themselves. And crucially, a way of being seen by others.

Glossier built its early community not around skincare routines but around a specific aesthetic, a sensibility, a kind of confident, unfussy femininity that its customers wanted to inhabit. The product was the entry point. The identity was the reason to stay. When Glossier customers became brand ambassadors it was not because of a referral scheme. It was because recommending Glossier said something about them that they wanted to say.

This is the shift that most loyalty programs miss entirely. They try to change behaviour through incentives. But the brands that create genuine long-term retention change identity through belonging. They give consumers a cohort to belong to. A set of values to affiliate with. A culture that extends well beyond the product and its functional benefits.

The question is not: how do we reward customers for coming back? It is: what does belonging to this brand say about the person who belongs to it? And is that something worth belonging to?

What this means for how brands should think about retention.

The practical implication of all of this is uncomfortable for a lot of organisations, because it suggests that the billions spent annually on traditional loyalty infrastructure, points, tiers, rewards, redemption mechanics, may be buying retention that is shallower and more fragile than the data implies.

The brands worth studying are the ones that have built belonging without a formal program at all. Patagonia has no loyalty scheme. Neither does Supreme. Neither, for most of its history, did Apple. What they have instead is a clear and consistent identity, a set of values that attract a specific kind of consumer, and a culture that makes those consumers feel that being part of it says something true about them.

Building that is harder than building a points program. It requires a brand to actually stand for something specific enough to attract some consumers and repel others. It requires the courage to not be for everyone. And it requires the kind of consumer understanding that goes deeper than purchase frequency and basket size.

But the return on that investment is a different order of magnitude. Because a consumer who belongs to your brand doesn't need a reason to stay. Leaving would cost them something they aren't willing to lose.

That is not loyalty. It is something much more valuable. And no program in the world can manufacture it.

The question worth asking: what would a consumer lose if your brand disappeared tomorrow? If the honest answer is not much, the problem is not your loyalty program. It is your positioning.