Gamifying loyalty programmes are a powerful way to increase customer engagement and satisfaction, making the experience more interactive and enjoyable. Sophisticated retail loyalty programmes are rising to this demand with increasingly personalised content, offers and marketing, using powerful technology to scale their strategies.

Ahead of the 2025 Asia Pacific Loyalty Conference, we uncover how gamification is becoming a ‘psychological game changer’ in the customer loyalty space, and why it’s time brands in APAC should embrace the innovative new trend.

Key gamification strategies

According to The Australian Loyalty Association (ALA) Founder and Director, Sarah Richardson, there are several strategies being used currently to apply gamification to loyalty programmes:

1. Progress bars and milestones

– Visual progress indicators: Show customers their progress toward earning a reward, like points accumulation or purchase counts. The closer they get to the goal, the more motivated they become to complete the task (Goal Gradient Effect).

– Milestone rewards: Offer smaller rewards at different stages (e.g., after every 5th purchase) to keep customers engaged and incentivised to continue.

“For example, the Boost Juice Programme uses a progress bar on its website to show members how many juices they’ve purchased out of the required ten to earn a free one,” she says. “As members approach the 7th or 8th juice, they tend to accelerate their purchasing behaviour, driven by the Goal Gradient Effect. The principle suggests that people are more motivated to complete a task as they get closer to the reward.”

2. Tiered rewards and status levels

– Status levels: Introduce different status levels (e.g., bronze, silver, gold) that customers can achieve by accumulating points or completing certain actions. Higher levels provide better rewards and exclusive perks.

– Upward mobility: Encourage customers to reach the next tier by showing them how close they are and the benefits of the higher status. This leverages the desire for achievement and recognition.

“Velocity is an interesting programme, as it uses visuals to show members their current status tier and what’s required to maintain it before the renewal period ends,” she says. “This taps into the ‘Loss Effect’, where the fear of losing a status tier, which members have worked hard to achieve, is a powerful motivator. It’s nearly twice as effective as the desire to gain a new status, encouraging members to fly more frequently to maintain their current level.”

Adore Beauty adds a touch of celebration when customers achieve a goal on their app by using digital fireworks or confetti.

“This creates a sense of accomplishment and triggers positive reinforcement, making customers feel rewarded beyond just the tangible benefits, which encourages continued engagement and loyalty,” she says.

3. Challenges and missions

– Weekly/monthly challenges: Offer specific tasks or challenges that customers can complete to earn extra points or rewards. For example, making a purchase on specific days, trying new products, or referring friends.

The ‘psychology’ of gamification

Experts agree there’s a deep psychological element behind the gamification of customer loyalty. According to gamification expert Yu-Kai Chou, author of “Actionable Gamification”, the reason gamification is so attractive to the human mind is that fundamentally, games have no other purpose than to please the individual playing them.

“Yes, there are often ‘objectives’ in games, like killing a dragon or saving the princess, and sometimes saving a dragon, but those are all excuses to simply keep the player happily entertained,” he says.

Chou, who is renowned for this ‘Octalysis framework’ of gamification, explains that the allure of games is that when something is engaging because it lets you express your creativity, makes you feel successful through skill mastery, and gives you a higher sense of meaning, making users feel good and more powerful. This is particularly true when translating the gamification mentality to loyalty, he explains in a recent loyalty podcast.

“But creating a rich gamified experience is much more than simply slapping on various game mechanics to existing products,” he says. “It’s a craft that requires a lot of analysis, thinking, testing, and adjusting.”

Another author on this topic, Jonathan Reeve, VP of APAC at Eagle Eye, agrees. “The rise of challenge offers and gamification represents a major advancement in loyalty programmes,” Reeve says. “This is a significant shift from traditional discount-based engagement to sophisticated, psychologically-driven customer engagement.”

He highlights how challenge offers in particular are powerful as they use the ‘goal gradient effect’, a psychological principle where motivation increases as people get closer to achieving a goal.

“Gamification in the form of challenge offers is an emergent addition to the digital customer loyalty experience. ‘Challenge offers’ increase engagement and extend consumer interactions by providing customers with compelling goals, stakes and rewards,” he says.

“By encouraging consumers to reach specific targets – like spending a certain amount over a set period – challenge offers turn shopping into a game, making it more interactive and engaging. As consumers progress towards completing their challenges, the chase itself becomes more enjoyable, further motivating them to continue engaging with the offer.”

Earlier this year, UK-based supermarket brand Tesco launched ‘Clubcard Challenges’, a campaign that provided each customer with a personalised challenge, which when completed would reward them with Clubcard points.

Customers could complete up to ten challenges, and redeem a total of £50 (AUS$98) during a six-week campaign.

Although each offer is tailored to individual preferences, the overarching message, like Tesco’s “Collect up to £50 worth of Clubcard points,” can be communicated at scale via digital channels, in-store promotions, and traditional advertising.

“The wide visibility leads to impressive participation rates – often five to ten times higher than traditional coupons,” Reeve reveals. “Despite the broad reach, each challenge feels personal and relevant to consumers, thereby balancing reach and individual relevance.”

Time for the APAC region to seize the gamification trend

But while challenge offers are already making a measurable impact at leading global retailers, experts note they are yet to have significant top-tier adoption in the wider APAC region.

“Forward-thinking retailers in Australia, New Zealand, and the wider Asia-Pacific region that seize the opportunity as early adopters stand to capture the proven benefits of higher participation rates, engagement, loyalty and revenue,” Reeve says.

Recognising the need for more brands to embrace gamification and loyalty, The Australian Loyalty Association (ALA) has announced that the future of retail AI, personalisation and customer loyalty will be the major topics of industry discussion and debate at the upcoming 2025 Asia Pacific Loyalty Conference.

One of the topics up for discussion will be how gamification can boost interaction and loyalty, presented by Hanes Brands’ Head of Loyalty, Jaimi Farrey. Speaking at the 2025 Asia Pacific Loyalty Conference, held on 29 – 31 July 2025 at QT Resort, Gold Coast, Farrey will unpack how combining elements like gamification and personalisation can unlock new growth opportunities and create memorable shopping journeys that resonate with today’s tech-savvy consumers.

“Gamification is a powerful way to drive customer behaviour by using human psychology, ultimately enhancing the effectiveness of loyalty programmes,” Richardson says.

(Image source: Unsplash)