How Companies Turn Loyalty Into Billion-Dollar Data Assets

For decades, retailers trained us to believe loyalty cards were a favor. Swipe here, save a dollar. Enter your phone number, get points. Buy ten, get one free.

But that story is incomplete — and for founders, increasingly dangerous to misunderstand.

What retailers actually built was one of the most powerful data engines in modern commerce, and many consumers and entrepreneurs still fail to grasp its implications.

As someone who has spent years inside the data economy — designing systems, advising enterprises and now warning about their excesses — I can say this plainly: loyalty programs are no longer about loyalty. They are about leverage.

And for entrepreneurs, leverage is never neutral.

From coupons to corporate assets

Loyalty programs started innocently enough. In the 1980s and 1990s, they helped retailers understand basic purchasing behavior: what sells, when it sells and to whom.

Fast forward to today, and those same programs have evolved into billion-dollar balance-sheet assets.

Airlines figured this out early. When American Airlines used its loyalty program as collateral for a government-backed loan, the valuation was driven by data — not aircraft, gates or service quality. A similar transformation is now quietly underway in retail.

Modern retailers do not just sell groceries, clothes or household goods. They sell insights.

Every swipe of a loyalty card contributes to a growing behavioral profile that includes household composition, income band, health indicators and life-stage transitions. Even pregnancy predictions and political leanings can be inferred with startling accuracy.

This isn’t guesswork. Data today is mathematically derived and increasingly precise.

In many cases, retailers know what you will buy next before you do.

Why entrepreneurs should pay attention

If you are building a business today, you are operating in an economy where data is currency — and loyalty programs are one of the cleanest ways to mint it.

Retailers have evolved beyond merchants. They now operate as media companies, analytics firms and in some cases, de facto data brokers.

Retail media networks run by companies like Walmart, Amazon, Kroger and Target generate enormous revenue by selling access to customer insights. In many organizations, margins from data now rival — or surpass — margins from physical products.

For founders, this creates a strategic crossroads.

You can follow the incumbent model and quietly extract as much data as possible. Or you can intentionally redesign trust and build something fundamentally different.

That choice matters more as trust becomes scarce.

Personalization has a cost

Entrepreneurs are taught that personalization is the holy grail. Know your customer. Meet them where they are. Deliver relevance at scale.

But personalization is not neutral. It is a two-way mirror.

Customers receive convenience. Behind the scenes, they surrender behavioral exhaust — often without understanding how far it travels or how long it persists.

This is where many businesses cross an invisible line.

Monitoring in-store behavior to prevent theft is one thing. Following someone home digitally into their private life is another.

Smart TVs, apps, voice assistants, fitness trackers and loyalty cards work in concert. They are stitched together through identity graphs and clean rooms that reconstruct a remarkably complete portrait of an individual.

At that point, consent becomes performative.

Clicking “I agree” should not be mistaken for control. It is compliance.

The illusion of consent is breaking

Public sentiment is shifting, even if quietly.

Across industries, I hear three recurring reactions:

• This is just how the world works now.
• I have nothing to hide.
• It’s already too late.

All three are wrong.

Saying you don’t care about privacy because you have nothing to hide is like saying you don’t care about free speech because you have nothing to say.

Privacy and secrecy are not the same. Privacy is about autonomy — and autonomy is foundational to innovation.

If founders want customers to trust new platforms, AI systems, and data-driven services, control has to move back to the individual.

The next competitive advantage

The next generation of winning companies will understand something incumbents often miss.

While it’s tempting — and easy — to simply extract data, it can and should be negotiated.

Imagine a model where customers can see how their data is used, choose when and how they participate, and benefit financially or functionally from that participation.

This isn’t anti-business. It’s pro-market.

Markets work best when participants are informed, empowered, and free to choose. The same principle applies to data.

When customers are treated as silent data laborers, resentment accumulates. When they are treated as partners, trust compounds.

Trust, unlike data, cannot be reverse-engineered once it is gone.

The questions founders must ask now

Before launching another loyalty program, personalization layer, or data partnership, founders should pause and ask a few hard questions:

Would customers knowingly agree to this use of their data? Could it be explained in plain language without legal cover?

If roles were reversed, would it feel respectful — or extractive?

The answers matter.

Because the companies that thrive over the next decade will not simply be the ones with the most data.

They will be the ones with the most permission.

In an economy built on insight, permission may be the rarest asset of all.

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For decades, retailers trained us to believe loyalty cards were a favor. Swipe here, save a dollar. Enter your phone number, get points. Buy ten, get one free.

But that story is incomplete — and for founders, increasingly dangerous to misunderstand.