Just half (51%) of shoppers believe that AI is having a positive impact on their retail experiences. Despite this, over three quarters (77%) of shoppers prefer brands that offer personalized recommendations – a common use case for AI in retail marketing.
These findings come from a new study by SAP Emarsys, which surveyed over 4,000 US shoppers. Their research suggests a clear conflict between consumer concerns about AI and their desire to reap the real-world benefits of its use––highlighting an opportunity for retailers to educate and convert loyal customers.
According to the research, almost a quarter (24%) of consumers are worried that AI will negatively impact their shopping experiences, while 86% say they’d rather interact with humans than AI. Interestingly however, less than almost 3 in 10 (27%) can tell the difference between a human and an AI chatbot online.
AI-Enabled Retail: Navigating Data and Experience
According to Emarsys’ analysis, this negativity is often because consumers don’t see that AI is behind their best experiences. While shoppers value personalized marketing content, custom recommendations, and speedy checkouts, few realize that AI is behind these advancements.
The research also highlights that many consumers are concerned about the use of data collection for AI, with 63% wanting retailers to strike a better balance between collecting their data and improving their shopping experiences.
Emarsys advises that retailers must educate their customers on the value of their data to elevate their experiences across websites, apps, and even mobile wallets.
Kelsey Jones, Global Head of Product Marketing at SAP Emarsys explains, “The benefits of AI in retail can’t be overstated: not just for brands but, for customers as well. It’s clear that, at present, shoppers aren’t entirely convinced on AI’s value – but when used responsibly, AI can truly enhance user experience in everything from receiving the right recommendations to easy purchasing processes.
“The personalized experiences that drive business growth and establish long-term customer loyalty aren’t realistic without data, so it’s essential that retailers educate shoppers, and strike a mutually beneficial balance for data sharing. In order to do that, transparency is critical; brands need to explain how data is being used, and the direct value it offers to consumers in terms of driving the personalization that they so desire at every touchpoint.
“This education will be essential for the widespread adoption of AI and the consumer benefits it brings, with leading retailers able to meet – and even anticipate – their customer’s expectations through the relevant, reliable, responsible use of embedded AI. That’s the real benefit of AI, making better, smarter decisions, faster.”
Expanding on this, Ritu Bhargava, President and Chief Product Officer, SAP Industry & Customer Experience, said: “Without data — the right data, and enough of it — all the AI in the world won’t amount to one single meaningful insight that can help brands create the personalized experiences needed to drive business growth, provide value to consumers, and build customer loyalty.
“We typically see that people are more amenable to sharing their data when it provides direct value – in savings, efficiency, and stronger connections with brands. But transparency is critical to building the much-needed trust between a customer and a brand. Sharing how data is being used anytime a customer creates an account, signs up for marketing communications, or agrees to data sharing reassures customers that their data is being treated securely and compliantly.
“Retailers who can provide this transparency and direct value will enjoy the kind of widespread brand loyalty that comes from more personalized, value-oriented interactions, which can be the key to giving customers the brand experiences they truly want, when they want it, and where they want it.”
AI-Powered Personalization: Empowering Brands
Rick Van Esch, Managing Director, Sinch Engage (an SAP Emarsys partner) said; “Today’s consumers demand personalized experiences with their brands and at the same time they expect to buy their product or services at the best-value possible. To satisfy these expectations, we see brands adopting AI-powered interactions with customers on channels like SMS, WhatsApp and Instagram. The recent (Chat)GPT hype is also increasing customers’ trust in AI as they’ve now hands-on experienced the benefits of AI outweighing the previously held distrust before (Chat)GPT. The trend is clear that more and more consumers are opening themselves up to AI and like the increased User Experience it creates.”
Dr. Lea Sonderegger, Chief Information Officer and Chief Digital Officer, Swarovski (an SAP customer) said: “AI is undoubtedly a value driver for customers and companies, helping to elevate personalization at the highest level. Thanks to sophisticated algorithms, we can now better understand our customers as never before, anticipate their needs and, recently, provide a human-like conversational interaction.”
To find out more about global attitudes towards AI, read Data Transparency Supercharges AI-Fuelled Customer Experiences from SAP’s Ritu Bhargava here.
