Composable architecture: The blueprint for customer loyalty in CPG and retail

Insights

• Loyalty in CPG and retail has evolved from simple points to personalized, seamless, omnichannel experiences.
• Legacy systems make this difficult, pushing brands toward composable, MACH-based architectures for real-time data, scalability, and hyperpersonalization.
• Modern loyalty programs must differentiate through relevant rewards, gamification, unified data, and consistent experiences across all channels.
• By adopting MACH, partnering with specialized providers, and iterating continuously, brands turn loyalty into a strategic driver of customer engagement.

Loyalty in the consumer packaged goods (CPG) and retail world has matured. It is no longer merely about offering points or discounts, but about forging deeper relationships with customers that go beyond single transactions. Consumers expect their experiences to be straightforward and rewarding across every touchpoint, whether they are shopping in a store, browsing online, using a mobile app, or engaging via social media.

This has created a competitive landscape where consumers have many brands to choose from. Retailers that don’t offer the smooth experience consumers expect will lose out.

This means that retailers need to solve challenges related to legacy systems and outdated infrastructure, and invest in composable commerce or microservices-based, application programming interface (API)-first, cloud-native, and headless (MACH) architecture that helps them roll out loyalty programs that are well thought out, technology enabled, and highly customer-centric.

Composable commerce is built on modular microservices, allowing each business capability to be updated or scaled independently. It follows an API-first design so every component — be it payments, search, or checkout — can be integrated with other systems. Because it’s cloud-native and thus compute, storage, and networking are elastically provisioned by the cloud, it delivers high performance, automatic scaling, and faster deployment across environments. Headless architecture separates the user-facing front end from the back end that comprises commerce logic, data, and services. This allows brands to update designs, add new features, or run experiments in the front end without waiting for backend releases, giving them more room to create rich, customized experiences for their customers.

Shifts in customer expectations

What used to be simple exchanges of points for products has now evolved into a full-blown expectation that brands understand each individual. Four in five consumers worldwide are comfortable with personalized experiences, and a majority broadly now expect companies to deliver them.

That means personalization in the form of offers, rewards, and communications tailored to their purchase history, preferences, usage, even their values related to ethical production or sustainability. Consumers want a unified experience, perhaps earning points via scanning a receipt in store, redeeming through a mobile app, and getting suggested relevant products online. They expect easy transitions between physical and digital channels.

For brands, this shift carries real financial stakes. Research shows that well-designed loyalty programs can boost annual revenue from customers redeeming points between 15% and 25%, driven by more frequent purchases, larger basket sizes, or both. When margins are thin and competition is high, that uplift can be the difference between growth and stagnation for businesses. As a result, properly architected loyalty programs are no longer optional, they are essential strategic investments. That said, there are obstacles to achieving loyalty programs of that caliber.

Hidden complexities of building loyalty programs

Loyalty programs must differentiate to stand out. It’s easy for brands to get lost if it’s just about points per spend with an occasional coupon. Consumers have rising expectations, and expect rewards that feel relevant, surprise and delight, or have environmental and social value. Brands like Pampers, PepsiCo, P&G, and beauty brands are experimenting with gamification, cause-based rewards, and hyperpersonalization to be distinctive. Amazon gives its Prime members privileges such as early access to major sales and deals, along with faster delivery or free delivery on eligible items. Similarly, Walmart+ membership includes benefits such as free video streaming, discounts on gas and auto care, free shipping, and other member-exclusive savings.

Technology and infrastructure are heavy lifts as many brands have legacy systems — enterprise resource planning, point of sale (POS), supply chain, customer relationship management — that weren’t built for real-time data sharing. Integrating across online stores, POS systems, mobile apps, and offline retail partners can be costly, complex, and error-prone. The cost of building or adapting systems to track behavior, purchases, engagement, and then act on that data is high.

Scaling loyalty programs is also a challenge as launching localized versions, channel-specific versions, or global rollout involves specialized expertise. Synchronizing changes, sharing customer data instantly across every touchpoint, and maintaining consistent branding and rewards structures, and data privacy compliance across markets and channels is difficult. Even for one country, making sure that a loyalty program works similarly in-store, on mobile, and in partner trade channels takes major coordination.

Also, real-time data flows are hard to achieve. Many programs have delays in data capture through receipt scanning and batch uploads, which means personalization or rewards aren’t timely. If an offer is delivered too late, such as after the consumer has already made a purchase, or if the digital-physical channels don’t align, and points earned on the app are not reflected in a store, trust drops.

How to strengthen loyalty programs

Modern architectural approaches of composable commerce that are often grouped under terms like microservices, API-first, cloud-native, headless (MACH) are proving essential due to the flexibility and intelligence they provide CPGs to overcome the hurdles, and build strong loyalty programs that strengthen relationships with customers.

Composable commerce provides the flexibility to embed artificial intelligence (AI) capabilities such as personalization, search, and automation. Loyalty features can be modular, making programs more agile and adaptable: for example, brands can plug in a rewards engine, or a personalization module, without having to rewrite or overhaul the entire monolithic system. Real-time data flows enabled by API-first and cloud-native systems help with hyperpersonalization and consistent customer experiences. For example, a customer purchases one product, and moments later gets an upsell or complementary offer via app or email; or bonus points offers if they visit a store. This kind of sync of online with offline, and physical and digital touchpoints ensures consistency that builds trust. Upselling is also known to contribute considerably to the sales of CPG brands.

Beauty brands such as Benefit Cosmetics and Yves Rocher have used flexible platform architecture to deploy real-time personalized recommendations on their e-commerce sites. Yves Rocher witnessed a surge of almost 18 times in clicks on personalized, real-time recommendations within just one minute of display, compared to generic top-seller suggestions, and achieved an increase of 11 times in the purchase rate of recommended products.

AI-powered chatbots deliver instant support, tailored reward recommendations, and proactive engagement to customers. Starbucks uses a proprietary AI-powered personalization system to deliver tailored offers and experiences to its Rewards members, aiming to increase program enrollment and overall engagement.

Alongside powering personalization, AI-enabled systems are increasingly being applied to protect the integrity of loyalty programs. By detecting atypical redemption behavior, revealing potential fraud indicators, and monitoring transactions across localities, these tools help retailers and CPG brands mitigate loyalty fraud.

Headless architectures enable one back-end loyalty engine to service multiple front ends such as mobile apps, e-commerce sites, physical POS, and third-party retailer portals. This means brands can scale across channels and markets more easily, reusing modules rather than reinventing for each locale or channel.

From insight to action

In the MACH Alliance survey, around 90% of organizations that have adopted MACH components say the results matched or outperformed their return on investment (ROI) goals. Nearly 38% of retail companies started adopting MACH over seven years ago, more than double the rate of professional services firms. This early momentum might be driven by retailers’ need to serve rapidly expanding omnichannel customer expectations spanning online shopping, click-and-collect, and in-store experiences, and the need to move sooner toward the flexibility and speed that MACH architectures provide to compete effectively.

To successfully build or revamp a loyalty program using these principles, brands should consider the following actions.

• Partner with specialized tech providers
  Instead of trying to build the architecture in-house, they should work with technology partners that already offer MACH-based loyalty platforms. These providers can reduce upfront infrastructure costs, accelerate time-to-market, and bring in best practices. Brands can also leverage the technology partner’s expertise to scale programs across locations and ensure smooth integration. An essential oils and wellness brand was looking to upgrade and maintain user experience across 96 geographic e-stores and integrate campaign management across owned and social channels. Infosys Equinox implemented an end-to-end microservices engine on AWS Cloud to help the brand enhance and scale performance. Such implementations are possible on the customer-preferred cloud including AWS, Azure, or Google Cloud Platform. Infosys implemented subscription and promotion management, personalization engine and social commerce, and provided a rules-based loyalty engine to deliver real-time, hyperpersonalized offers and complex point/tier logic, the rules and conditions that define how customers earn points, move between tiers, and unlock rewards in a loyalty program. The client was able to implement all this across over 40 countries including the US in 24 months.
• Implement headless solutions
  Retailers should use headless architecture to plug loyalty modules into any site or channel, unifying customer data. They should adopt a headless loyalty engine so that the same rules engine, rewards catalog, tier logic, and personalization modules can be used across their mobile app, website, POS terminals, and partner retailer systems. In a headless architecture, the loyalty rules engine, game mechanics such as badges and tier progression, rewards catalog, points calculation, promotions, and tiers all reside in a single backend system. All channels invoke the same API endpoints, so this prevents every channel, be it app, web, or POS from having its own loyalty logic and keeps the rules consistent everywhere. This means that a purchase at a store registers rewards the same way as in the app, without each channel maintaining its own logic. The headless engine can run personalization models centrally, then expose results through API. This way, the same personalization logic works on every channel without building personalization features related to personalized offers or product recommendations separately in each one.
  
  This helps unify customer data and ensures consistent customer experience. It also makes scaling new markets or adding new channels such as voice, smart devices, and kiosks easier because most of the back end can remain common. Infosys Equinox helped a century-old brewery adopt a headless loyalty solution to integrate with existing systems and manage complex promotions for members across over 70 global markets. Following the loyalty module rollout, 90% of the brand’s registered customers enrolled, driving a 7% lift in online sales and a 17% increase in repeat orders. The brand also used a loyalty microservice to link its web and mobile portals, carry over past loyalty and purchase data, and set up a customized admin dashboard.
  
  Headless loyalty modules let brands go beyond points and discounts, enabling flexible perks like early access to sales, point multipliers, social media rewards, refer-a-friend bonuses, charitable donations, and even incentives for recycling or healthy habits. It also allows for collaborative loyalty. For example, Dick’s and Nike are linking Scorecard and Nike Membership in the Dick’s app, letting customers connect accounts and enjoy perks from both brands.
  
  Headless tech also allows retailers to trigger promotions and digital wallet-based incentives dynamically at checkout, which encourages repeat sales. As headless loyalty and promotion engines provide real-time APIs that the checkout system whether POS, self-checkout, mobile app checkout, or partner terminals can call during a transaction, it allows the engine to evaluate the transaction as it happens and respond with targeted promotions or wallet incentives.
• Unify customer data across channels
  Brands should invest in customer data platforms or unified profiles that integrate purchase history, channel interactions, engagement behavior, and even external signals so long as they comply with privacy regulations. This makes personalization more accurate and timely. Real-time or near-real-time data flows matter to enable trigger-based offers, abandoned basket recovery, and contextually relevant rewards. Research shows that omnichannel customers shop 1.7 times more frequently than single-channel shoppers, thus providing a solid omnichannel experience counts.
• Incorporate personalization, gamification, and omnichannel rewards
  Personalization is not about just using a customer name or basing communications on past purchases, but dynamically generated offers based on recent behavior, preferences, even predicted future need. Gamification has been shown to lift customer retention by around 5%, and increase customer engagement, making it a powerful lever for keeping shoppers engaged. For gamification, brands can use challenges, badges, leaderboards, instant win games, or experiences. To achieve a strong omnichannel reward system, they can ensure points or reward currencies are earned across all touchpoints and can be redeemed flexibly: in-store, online, via partners. Experiential or non-transactional rewards such as events, early access, or charitable options that can strengthen loyalty.
• Pilot, measure, and iterate
  Brands should begin with smaller markets or channels to test hypotheses, such as if users respond to gamification, and which reward types lift basket size. They should track key performance indicators like redemption rates, frequency, average spend, incremental revenue, and refine the loyalty programs before scaling broadly. To keep pace with its rapid expansion, British coffee chain Costa Coffee adopted MACH architecture to deliver personalized, multilingual content across markets. The shift helped the brand scale swiftly, enabling entry into India, and cut website deployment time from several months to just 15 minutes.
• Ensure compliance, privacy, and security
  For global or multimarket programs, data privacy laws differ. MACH-based solutions often have built-in capabilities for data governance and security. CPGs should ensure their data collection, storage, and processing comply with local laws such as GDPR, and CCPA. Infrastructure should be robust to prevent breaches. By following these steps, brands can build loyalty programs that are not only differentiated and compelling, but also agile, scalable, and cost-efficient.

Loyalty today demands personalized, emotionally resonant relationships that span physical and digital channels. By partnering with the right technology providers, unifying data, employing personalization and gamification, and measuring and iterating, brands can not only retain customers but deepen engagement, and increase average spending. In doing so, loyalty becomes less of an expense and more of a strategic asset — one that helps CPG and retail companies grow sustainably in an increasingly competitive marketplace.