More memberships, more problems.

That’s among the takeaways of a new report that explores six events that are reinventing loyalty, especially for retailers. Among the surprising stats in the report, by LoyaltyOne Global Solutions: Retail loyalty memberships represent 42% of all loyalty memberships in the U.S. — about 1.6 billion. That’s about five retail reward programs for every man, woman and child in the country.

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Needless to say, those numbers don’t make practical sense, which is why more than half — 54% — of all reward programs are inactive.

Retail programs likely suffer the same odds. Often, members enroll for a special signup offer and then never use the program again. Such practices extend beyond loss-leader territory and into potentially serious problems, in terms of justifying the expense of the program and the root causes of the shoppers’ failure to engage.

But the flip side of every challenge is opportunity, and the report makes a good case for retailers. Using examples from Amazon, Ralph Lauren, Alibaba and others, it illustrates how merchants are meeting shoppers’ raised expectations through data insights that help them understand their customers better.

These brands reach their shoppers through personalization, but how do retailers get it right? Artificial intelligence and machine learning are producing shiny new ways to interact with shoppers, but if those communications fail to hit their mark, or are creepy, the shopper will write them off as a retail fail, and likely move on.

Getting Interactive, Trusting Insights

Put another way, shoppers have the controls, regardless of the technologies available to retailers. Among the report’s data points:

  • More than 50% of North American consumers said they are likely to purchase if stores offer interactive technologies.
  • Only a third of retailers are confident in their ability to consistently leverage customer insights to develop strategies and decisions across the organization.
  • Nearly two-thirds of North American retail loyalty program members like having the option to earn with one program and redeem with another as part of a loyalty program.

Act Like a Valued Friend

As the report puts it, customers expect brands to be quiet when they don’t need them…