Rewards Go Everyday: Points Now Fund Daily Spending

The Indian loyalty program market is witnessing a significant behavioral shift, with consumers now prioritizing the use of reward points for daily expenses over occasional indulgences. This trend is evident across various platforms, where food and groceries have emerged as top categories for savings, offering an average of 8% on order values. This marks a move from high-ticket redemptions to routine usage, effectively providing consumers with 'embedded liquidity' at checkout.

Companies like TWID and POP report a surge in reward point redemptions, unlocking substantial value for users and reinforcing brand loyalty through consistent engagement. While credit cards historically anchored the rewards economy, consumers now expect these benefits to translate directly to their preferred shopping and delivery platforms. This has led major marketplaces and retailers to enhance their loyalty engines, introducing layered benefits and cross-category redemption options.

Initiatives like Swiggy's partnership with Etihad Airways and Marriott Bonvoy's link with Flipkart illustrate the growing interoperability of loyalty programs. Platforms are widening the scope of their in-house engines, aiming for broader use cases to boost repeat purchases and lifetime customer value. However, the rising cost of funding these rewards, coupled with thin margins in essential categories, presents a challenge, pushing platforms to ensure rewards drive genuine loyalty rather than just added expense.