Traditionally, consumer data has been drawn from sources such as demographics, search queries, browsing behavior and purchase history, yielding broad, generic product recommendations and offers.
Going forward, retail brands have the potential to use AI, machine learning and big data analytics to gain deeper insights into consumer preferences and behaviors by parsing much richer consumer information: social media posts and reviews, customer service sessions with smart chatbots, product interactions in AR/VR environments and even in-store product evaluations.
With this intelligence, companies can gain a deeper, more granular understanding of consumer motivations, values and intent. Generative AI can then use these insights to predict emerging interests and unmet needs, informing customer-specific messaging, marketing, recommendations, pricing, promotions and incentives. These can be delivered precisely how, where and when each shopper prefers, creating a dynamic fit-for-me experience.
The emphasis on personalization has led to an increased focus on responsible data management. In light of sophisticated data breaches and reported misuse of data, trust has become a new currency for brands. Retailers that want to gain share of wallet will need to earn consumer trust by complying with regulations keeping pace with expectations for how data should be used responsibly.
(Read more in Mastercard’s Q1 Signals issue.)
Top-performing programs can increase revenue from customers who redeem points as much as 25% by boosting the frequency and size of purchases.29
The average U.S. consumer is enrolled in about 15 loyalty programs but active in fewer than half of them.30
Two-thirds of consumers will change the brands they buy from for better rewards.31
Singapore Airlines launched a loyalty wallet built on blockchain technology that allows travelers to easily spend their air miles at numerous retail outlets.32 Emirates Skyward has a similar blockchain-based program.
Snow Peak, a Japanese outdoor equipment retailer, invites customers to participate in personalized workshops, community gatherings and exclusive camping experiences at locations in Japan and the U.S. The goal is to build brand affinity, glean insights and help customers “experience the rejuvenating power of the outdoors.”33 The company credits the program with increasing customer engagement and market share
Emerging use cases, such as virtual try-ons and home visualization apps, are expected to see widespread adoption due to their ability to enhance customer confidence and reduce returns.
Ensuring accurate and user-friendly technology for body scanning and AR/VR experiences is challenging, and the current cost of MR devices is an impediment. However, as technology advances and costs decrease, retailers that can address privacy concerns and offer seamless, valuable and immersive experiences could lead the way in redefining the e-commerce landscape.
[24] https://www.salesforce.com/eu/blog/future-of-customer-service/
[26] https://blogs.perficient.com/2023/03/01/customer-experience-trends-in-2023/
[27] https://explodingtopics.com/blog/personalization-stats
[30] https://blog.accessdevelopment.com/2019-customer-loyalty-statistics
[31] https://info.bondbrandloyalty.com/the-2016-bond-loyalty-report-press-release-us
[32] https://www.ccn.com/singapore-airlines-will-launch-blockchain-loyalty-wallet-frequent-flyers/
[33] https://www.snowpeak.com/pages/campfield
[36] https://www.cbinsights.com/research/report/retail-technology-startups-2023/
[37] https://www.voguebusiness.com/technology/mapping-the-net-a-porters-of-nfts
[38] https://hypebeast.com/2021/5/virtual-gucci-bag-roblox-resale
[39] https://www.voguebusiness.com/consumers/new-era-ar-vr-pop-ups-enough-to-lure-customers-in
[40] https://www.voguebusiness.com/consumers/new-era-ar-vr-pop-ups-enough-to-lure-customers-in
[41] https://wwd.com/fashion-news/fashion-scoops/jacquemus-cafe-fleurs-seoul-1235882485/
[42] https://www.cnbc.com/advertorial/behind-the-vs-series-by-sk-ii-studio/
[43] https://www.retaildive.com/news/savage-x-fenty-delves-deeper-into-fitting-room-tech/643390/
[46] https://www.salesforce.com/news/stories/loreal-salesforce-success-now/
[47] https://shop.lululemon.com/story/like-new
[48] https://www.alpinetrek.co.uk/blog/patagonia-worn-wear/