The news: Google is enhancing its retail ad products with new loyalty-driven personalization features, including:

• Personalized pricing and shipping perks for loyalty program members on both free and paid shopping listings.
• A new “loyalty mode” in Google Ads’ retention goal, allowing brands to optimize bidding around high-lifetime-value (LTV) customers—even with lower target ROAS.
• Personalized annotations in US Performance Max Shopping campaigns that spotlight exclusive deals to draw back lapsed customers.

Sephora, an early adopter, reported a 20% increase in click-through rates from loyalty-focused annotations, per Google.

Why it matters: The timing is strategic, as loyalty is climbing the priority list for retailers heading into the holidays. According to Inmar Intelligence, 32% of US adults say loyalty rewards or member perks influence their holiday purchases—ranking just behind discounts and convenience. Google’s updates directly plug into those expectations.

Marketers also face mounting pressure to balance personalization with privacy. According to Merkle, nearly half of CMOs worldwide (49%) are leaning on loyalty-driven experiences to strengthen first-party data, while 52% are investing in identity solutions to enrich their data sets. Google’s loyalty mode attempts to bridge these goals by combining measurable outcomes with a walled-garden environment.

The challenge: Retention is often challenging for brands and retailers.

• BloomReach and EMARKETER found 29% of brand professionals cite lack of personalization as a barrier to loyalty.
• Salesforce data shows 81% of Gen Z and Millennials switched brands in the past year—evidence that younger shoppers are both fickle and prime targets for personalized retention campaigns.

Our take: With acquisition costs climbing and younger shoppers less brand-loyal, the near-term win is protecting the customers you already have.

Google’s move to embed loyalty signals into bidding and creative turns its ads stack into a retention engine—and a counterweight to retailer media networks that already activate first-party loyalty data.

The competitive backdrop matters; Amazon is pulling back from Google—cutting off Google’s AI shopping agent and halting Google Shopping ads—as both companies race to own discovery-to-checkout in the genAI era.

Execution is the swing factor. Retailers need solid LTV models, clean first-party data, and real loyalty programs to make this work. For brands with that maturity, these features could shift budgets from acquisition-first to retention-led planning at a moment when loyalty is harder to earn—and easier to lose.