Several U.K. retailers are accelerating a new phase of tech transformation in their loyalty programs, as AI enables a shift from broad-based incentives to highly individualized engagement strategies.
Recent announcements from Marks & Spencer (M&S), Tesco and Boots indicate that loyalty is becoming increasingly dynamic, predictive and embedded across the customer journey.
M&S Uses AI and Data to Revamp Sparks
Marks & Spencer has relaunched its Sparks rewards program with a step change in the use of AI and data” as it focuses on digital transformation to drive growth. The announcement stated:
“For the first time, M&S will use a suite of transformed AI and data capabilities to power Sparks including machine learning, and advanced generative AI models coming soon after, that will deliver even more personalized offers and rewards.”
The idea is that the more customers use the program, which has around 18 million members, the better and more personalized the shopping experience.
The updated scheme centers on a digital wallet that delivers personalized monetary rewards based on individual shopping behaviors, such as category spend or cross-department purchasing.
M&S CEO Stuart Machin said:
“Powered by new and transformed data and AI capabilities, a new Sparks helps us get even closer to customers and deliver an even better M&S experience.”
That signals a departure from static perks towards contextual incentives designed to influence behavior in real time. Customers are encouraged to explore new categories through tailored offers and rewards for spending in parts of M&S where they don’t usually shop. A new personalized Sparks hub on the M&S app brings together offers based on preferences that customers share and what they have purchased before.
Partnerships, such as with Virgin Red, extend the value exchange beyond the retailer’s own ecosystem. The approach indicates how loyalty is evolving into a broader engagement platform, rather than a standalone scheme.
Tesco Scales AI Personalization Through Strategic Adobe Partnership
Tesco’s newly announced strategic partnership with Adobe takes this a step further, embedding AI deeply into personalization.
By combining Adobe’s agentic AI capabilities and Adobe Firefly Foundry with data from its Clubcard program, Tesco said its personalization and AI teams will be able to use customer intelligence to anticipate customer needs and deliver more relevant content, offers and recommendations across channels.
The Clubcard scheme is one of the largest loyalty programs in the U.K. retail sector, used more than 24 million households.
Becky Brock, Tesco Group Customer Digital Transformation Director, stated:
“At Tesco, we want customers to feel that the more they use their Clubcard, the more use it is to them. Working with Adobe, we can be even more responsive to the needs of shoppers. We can act in the moment, getting the right messages, savings or ideas to the right customers, just when they need them.”
The companies have also formed a new Tesco x Adobe Innovation Lab, where Adobe engineers will work directly alongside Tesco’s personalization and AI teams to bring together the retailer’s in-house technology and expertise with the vendor’s AI capabilities. Adobe will also support Tesco to rapidly produce on-brand creative content at scale.
The initiative highlights the growing importance of first-party data as the foundation for real-time personalization.
Boots Adapts Advantage Card to Rising Demand for Tailored Rewards
Boots has also indicated recently that it’s giving its 17-million-member Advantage Card loyalty scheme a makeover to align with rising expectations for tailored rewards. The retailer is incorporating additional data and insights into its promotions to deliver more targeted offers based on individual purchasing habits, delivered through its app and online channels.
This includes more personalized points incentives and promotions on frequently purchased products, alongside segmented benefits for specific customer groups.
The changes reflect a broader industry response to demand for relevance, where customers increasingly expect loyalty programs to recognize and adapt to their preferences.
From Points to Prediction: Retail Loyalty Moves to AI-Driven Engagement
The latest moves from M&S, Tesco and Boots indicate that loyalty is emerging as a key battleground for differentiation in U.K. retail, as AI redefines the purpose of rewards schemes.
The announcements indicate a shift from traditional, transaction-based loyalty models towards predictive engagement powered by AI. Rather than rewarding past behavior alone, retailers are using data and machine learning to influence customers’ future actions, from basket composition to channel choice.
Personalization is becoming less about segmentation and more about continuous, individual-level engagement. Static promotions are being replaced by dynamically generated offers, with timing and context playing a role in their effectiveness.
However, this evolution also raises challenges. The reliance on customer data to fuel AI-driven personalization places increased pressure on retailers to maintain trust, transparency and clear value exchange. As programs become more sophisticated, ensuring customers understand, and benefit from, how their data is used will be essential.
