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Loyalty Is Dead. Google Just Killed It – Part Two

AI assistants are taking control of the customer journey—and if brands don’t act fast, they’ll lose the right to be chosen.

Editor’s Note

This thought-provoking article about the impact of AI Shopping on how people make purchase decisions and form loyalty to the brands they patronize, goes way beyond the provocative headline. In Part One, Steve described the “Great Disintermediation,” detailing how Google is moving in to disintermediate brands and loyalty providers as result of its AI Shopping Assistant. In this article, he details the impact of the coming changes on loyalty programs and their supporting ecosystem of people, processes and technology.

For decades, loyalty programs have been the workhorses of customer retention. Points, tiers, challenges, offers—all designed to reward behavior, build habit, and foster connection. And they worked. Not perfectly, but reliably. Starbucks. Chick-fil-A. Sephora. McDonald’s. Yes, these brands sold products, but they also trained crucial behaviors. They taught customers to care, to engage, to return.

But now, all of that is at risk of becoming obsolete, not because loyalty stopped working, but because something more powerful has stepped in between. AI assistants like Google’s are now positioned to become loyalty proxies, quite literally artificial intermediaries that replicate the outcomes of traditional loyalty programs without requiring the customer to interact with the brand at all.

Here’s how the erosion begins:

  • Customers no longer open your app to see how close they are to their next free coffee. Instead, the assistant simply tells them: “You can get 10% off coffee from Brand X today.”
  • They don’t browse your limited time offers or complete weekly challenges. The assistant filters the most relevant deal from a dozen competitors and displays the one it thinks they’ll want.
  • They don’t care who’s offering the reward—they only care that something was offered, and it was convenient to accept.

The AI becomes the loyalty program. Except it’s not your loyalty program. It’s Google’s. It’s Amazon’s. It’s the assistants. And that shift is more dangerous than it seems. Because now, the loyalty isn’t to your brand. It’s to the assistant. And assistants don’t play favorites, at least not in a way that you have control over. They don’t care who the customer buys from, only that the algorithm is “right,” the experience is seamless, and the purchase converts. The assistant is loyal only to optimization.

This means your years of investment in personalization engines, behavioral segmentation, CRM systems, and offer orchestration are about to get steamrolled. Even worse, your carefully crafted loyalty system—the one built on rewards, rituals, and recognition—becomes just another data source. It will get cannibalized by the assistant’s machine learning model, which picks through your perks and filters them through its own logic to decide what (if anything) reaches the customer.

Your entire program becomes a comparative feature getting evaluated in someone else’s platform. And when that happens, you lose the ability to:

  • Influence behavior
  • Design emotional journeys
  • Create exclusivity
  • Deliver surprise and delight
  • Build habit-forming loops

In other words, you lose the game of loyalty because you’re no longer holding the controller.

And make no mistake: this isn’t theoretical. This is already happening. We are witnessing the rise of an AI-powered ecosystem where customer interactions are no longer brand-mediated, but algorithm-mediated. Where identity, preference, and purchasing history are managed not by the brand that earned them—but by the assistant that simply ingested them.

So, ask yourself this: if the customer never sees your app, never visits your site, never experiences your brand world—are they still even your customer?

Or have you already lost them to the proxy?

The Commoditization of Brand Identity

For generations, branding has been the soul of business strategy. It’s how Nike became “Just Do It,” how Apple became a lifestyle, and how Patagonia became a movement. Great brands do more than offer products. They project aspiration, convey identity, and embody values. They craft an emotional imprint that lives far beyond the transaction.

But in an “AI-first” shopping environment, that identity is at risk of being erased.

Here’s why: AI assistants don’t care about your brand story. They care about signals. Structured data, product attributes, price, delivery time and customer ratings all factor into the equation. Maybe—just maybe—your ethical policies, community involvement, and charitable activities are buried in there somewhere. But the Big Idea you’ve spent countless hours crafting in the boardroom? The corporate narrative you’ve so carefully architected? The emotional connection the first time your customers see your product online?

Flattened.

This is the brutal logic of AI-powered curation. It strips away the nuance and compresses your identity into a set of calculated performance metrics. Did the product convert? Was the price competitive? Did the user click the suggestion? That’s what survives. Everything else is lost in translation.

Your bold packaging design? Gone, the assistant doesn’t show it. Your tone of voice? Irrelevant, the customer is reading a one-line summary from the assistant. Your heartwarming annual Christmas video, the kind that gets shared on LinkedIn and brings people to tears? The AI doesn’t care. It’s not part of the purchase flow. In this new ecosystem, even the most iconic brands risk becoming undifferentiated commodities. Your hard-won uniqueness is squashed into a sameness, a transactional row in a list of “recommended” results.

It’s the great equalizer, but not in a good way.

Because in a world where AI assistants mediate every purchase decision, branding stops mattering unless it shows up in the machine’s logic. And unless your brand is uniquely optimized for those systems—unless your narrative can be translated into data that improves conversion—it becomes invisible.

Worse, the machine doesn’t care about invested equity. It doesn’t reward the years you’ve spent building trust or the emotional capital you’ve invested in your customers. It rewards whatever wins the algorithmic race that day. And that could be a no-name private label product that momentarily scores just a little better on price or availability.

This is how brand loyalty dies, not in some dramatic seismic betrayal, but in a quiet, gradual erosion of distinctiveness. You’ve gone from “beloved brand” to “line item.”

And here’s the kicker: the more successful these assistants become, the more habituated customers get to skipping over the brand entirely. They stop asking who they’re buying from. They start only asking what they’re getting, how much it cost, and when it will arrive.

That’s the commoditization of brand identity. And it’s the beginning of the end for loyalty as we know it.

A Punch to the Gut of the Loyalty Industry

What we’re witnessing isn’t just an annoying little poke. It’s a direct hit to the solar plexus of the entire loyalty ecosystem, and most people in the industry are still smiling, nodding, and pretending they can breathe just fine.

But they can’t. Not if they’re paying attention.

Let’s break down exactly who’s about to get walloped—and why:

1. Basic Loyalty Platforms

The traditional loyalty tech stack—points engines, tier systems, email-based offer orchestration—has been built on one sacred assumption: that brands control the customer interface. That assumption is now dead.

AI shopping assistants like Google’s Gemini are intercepting and replacing the UX layer where loyalty programs have traditionally lived. Customers won’t log into your app to check their points. They’ll ask their assistant what’s on offer, and the assistant will decide what to surface based on its own logic.

That beautiful dashboard you built? It’s gone. Your hard-fought push notification strategy? Replaced by an AI nudge from someone else’s platform. Unless loyalty platforms can evolve to plug directly into AI ecosystems with real-time, dynamic, API-ready value props that survive the cut, they will become irrelevant.

2. Agencies and Consultants

The loyalty industry’s strategic advisors have long been the architects of brand engagement, designing journeys, campaigns, reward structures, and community playbooks. But when the assistant becomes the journey designer, what’s left to strategize?

If customers no longer interact with your ecosystem, if rewards are extracted and reinterpreted through the assistant’s lens, if behavioral design is reduced to price-point logic all of that narrative scaffolding collapses.

Agencies will have to reinvent their playbooks from the ground up. Loyalty design will no longer be about orchestrating brand-centric experiences. It will be about engineering influence inside hostile, third-party ecosystems.

And that’s a very different job.

3. Brands and Loyalty Marketers

Perhaps the hardest hit will be the in-house loyalty professionals—those brand-side strategists who’ve spent years constructing slick engagement pathways designed to efficiently build trust and loyalty with their audiences. Because now, that trust can be hijacked in a click by an automated AI filter with a much better conversion rate.

Your personalization strategy? Obsolete if it can’t be exposed through the assistant’s data layer. Your retention campaigns? Useless if the customer never sees them. Your offer design? Meaningless if the AI decides a competitor’s offer is just 1.5% better.

And here’s the harshest truth of all: The customer won’t miss you.

Not because they don’t care, but because they’ll never know what they’re missing. The faceless assistant will deliver an optimized experience. It’ll be fast, frictionless, functional. And the emotional layer you spent years cultivating? Gone in a blink.

4. The Loyalty Industry at Large

This is an extinction-level event for the loyalty business model. Some loyalty practitioners already know it. Some are denying it. But mark my words, it’s happening now.

The bigger questions is, what happens to the $15 billion global loyalty management market—the vendors, the systems, the conferences, the careers—when customer engagement is no longer brand-mediated? What happens when “loyalty” becomes a backend variable in someone else’s machine?

This is not a brief cyclical downturn they will need to weather. It is a tectonic realignment of stakeholder power. And unless we reinvent the game, we’ll all be playing in someone else’s sandbox, one with no scoreboard, no rules, and no audience.

About the Author

Steve is an award-winning engagement designer, brand-customer relationship orchestrator, and business strategist. He has 25+ years of direct experience in the video game industry, having designed and produced AAA games for Disney Interactive, Electronic Arts, Sega, and Ubisoft that have generated sales in excess of $650 million. He has spoken at a variety of premier events, including Game Developer’s Conference (San Jose, California), South by Southwest (Austin, Texas), SIGGRAPH, Juarez Competitiva (Mexico), Gamification Summit (Amsterdam), Banff New Media Festival, GameON Finance (Toronto, Ontario), GDCNext (Los Angeles, California), Digital Entertainment Leadership Forum (Hong Kong), Interface Summit, and several others.