I’ve been building loyalty platforms for twenty-five years. I’ve watched programs launch, evolve, stall, and get reinvented. And I’ve never seen anything like the first ninety days of 2026.
In the span of weeks, Starbucks restructured its 35.5-million-member program into three tiers. Hilton introduced a fifth elite level. Hyatt pushed award pricing up by as much as 67%. BMO retired the thirty-year-old Air Miles brand entirely. United slashed non-cardholder earning rates by 40%. Southwest fundamentally rewired its business model around loyalty economics. And Gap Inc. unified four separate brand programs into a single ecosystem called Encore, serving nearly 40 million members across Old Navy, Gap, Banana Republic, and Athleta.
That’s not a trend. That’s a detonation.
What the Gap Encore Launch Actually Signals
Most of the coverage of Gap’s Encore program has focused on the credit card, the tiers, the entertainment partnerships. That’s the surface. What matters is the structural decision underneath.
Gap had four brands, each with its own loyalty program, its own member database, its own engagement logic. That’s four separate views of the same customer. If you shop at Old Navy on Saturdays for your kids and Banana Republic on weekday lunches for yourself, those two brands had no shared understanding of who you are, what you value, or how your relationship with the parent company is evolving.
I think about this the way a physician thinks about a patient’s chart. Imagine four specialists, each keeping their own notes, never sharing records. The cardiologist doesn’t know what the endocrinologist prescribed. The orthopedist doesn’t know about the allergist’s findings. Every individual note might be accurate. The composite picture is dangerously incomplete.
That’s what fragmented loyalty programs produce: dangerously incomplete customer intelligence.
Gap’s decision to consolidate into Encore is a move from four flat patient charts to a single, three-dimensional health record. And this is where I see enormous untapped potential. When you unify member data across a multi-brand portfolio, you don’t just get a bigger database. You get the ability to capture what I call the BIT Data Trinity: Behavior, Interaction, and Transaction, across the entire customer relationship.
- Transaction data tells you what a customer bought at Athleta.
- Interaction data tells you they browsed the Gap app three times before purchasing.
- Behavior data tells you they referred two friends to Old Navy, opted into sustainability messaging at Banana Republic, and shifted their shopping cadence from monthly to biweekly across the portfolio.
Stack those three dimensions on top of 40 million members and you have something fundamentally different from a points program. You have an enterprise intelligence asset.
Why Most Loyalty Technology Can’t Actually Do This
Here’s where Gap’s ambition collides with an uncomfortable industry reality. The majority of loyalty platforms in the market were architectured for a single brand running a single program. One earn structure. One tier logic. One member database. One set of rules. I call this the Engine One architecture, and it defined an entire era of loyalty technology, including the platform I built at Oracle. It was the right answer for the time. It is the wrong answer for what Gap, and every multi-brand enterprise, now needs.
The problem isn’t features. It’s foundations. When you try to run four distinct brands through a single-brand platform, you face an impossible choice. You either force all brands into one undifferentiated program, destroying the unique brand identity that attracted customers in the first place. Or you run four separate instances of the platform, which is what most enterprises end up doing, and you’re right back where you started: fragmented data, duplicated costs, and no unified view of the customer.
This isn’t a Gap-specific challenge. It’s the same structural limitation that held back:
- Chalhoub Group: When they had 54 luxury brands across 14 countries in the Middle East.
- Majid Al Futtaim: When they needed to unify 20 companies spanning cinemas, hypermarkets, and financial services.
- Latin American Coalitions: Seeking to manage hundreds of sponsors on twenty-one terabytes of customer intelligence.
The issue runs deeper than any individual enterprise. Because the US market has been dominated by single-brand programs for decades, the vendors and consultants who serve that market built products and services for single-brand use cases. That limits what’s available to US operators who want to pursue ecosystem strategies, which further entrenches the single-brand norm. It’s a self-reinforcing gap.
The CFO Has Entered the Room
Gap’s consolidation doesn’t happen in a vacuum. It happens in a year when CFOs across every industry are demanding that loyalty programs justify their existence with financial rigor.
- McDonald’s: CFO called loyalty “our single most important digital metric” with 210 million active users.
- Southwest: CFO explained how loyalty restructuring enables revenue to be recognized sooner.
- Delta: Loyalty deferred revenue now exceeds $7.6 billion on the balance sheet.
- ROI Pressure: An Open Loyalty survey found 35% of brands must now explicitly prove loyalty ROI internally, up from 23% in 2023.
This is not the CFO auditing the loyalty team after the fact. This is the CFO co-designing the program from the beginning.
The programs that survive this shift are the ones that can answer a specific question: for every dollar we invest in this program, what incremental economic value does it create, and how do we know the program caused it versus the customer being valuable to begin with?
The Divergence Between Devaluation and Innovation
The US market is splitting into two camps, and the gap between them is widening fast.
Camp One: Devaluing
American Airlines stripped Basic Economy earning. United cut non-cardholder rates. Hyatt inflated award pricing. These are programs that are financially disciplined but strategically retreating, extracting more value from members while offering less in return.
Camp Two: Engineering
Gap is building an ecosystem. Starbucks is restructuring around behavioral tiers. Alaska and Hawaiian merged into Atmos Rewards. These programs are building ecosystems, capturing data across dimensions, and treating loyalty as enterprise infrastructure.
The technology demands of that approach are categorically different. You need:
- A federated operating model.
- Multi-currency point engines with real-time settlement.
- Cross-brand data governance frameworks.
- The ability to onboard new sponsors without custom integration projects.
What We Built and Why It Matters Now
This is exactly the problem I spent a decade solving after leaving Oracle. When I architected the GRAVTY platform, the ecosystem-led model and federated program operation were the two foundational tenets. Not features bolted onto a single-brand core. Foundations.
The reason is simple: I had spent thirteen years watching the world’s largest loyalty programs struggle. I knew that the future of loyalty wasn’t single-brand. It was ecosystem. These aren’t theoretical capabilities. They’re programs in production, at enterprise scale, doing exactly what Gap is now attempting with Encore.
Forrester recognized this in their Q4 2025 Wave for Loyalty Platforms, noting that LJI is “a strong choice for multinational brands that require support for coalition or multipartner programs.” That validation matters. But what matters more is that the market is finally moving toward the ecosystem model that we’ve been purpose-building for since day one.
What Comes Next
The technology layer is consolidating as fast as the programs themselves. Capillary Technologies acquired SessionM, Talon.One launched a machine-readable protocol for AI agents, and Olo acquired Spendgo.
I predict that within eighteen months, we’ll see at least three more multi-brand enterprises follow Gap’s lead and consolidate fragmented loyalty programs into unified ecosystems. The economics are too compelling to ignore. A consolidated member file is a more valuable data asset. A unified program is cheaper to operate. And the ability to measure customer value across brands gives the CFO the enterprise-level metrics they’re now demanding.
2026 didn’t start with a trend. It started with a structural shift. The brands that recognize it and act now will define the next decade of loyalty. The ones that don’t will spend the next decade wondering what happened.