Towards Data-Driven Customer Engagement

Beyond Points and Perks: Retail Loyalty Programs in the AI Era

Cultivating customer loyalty in retail is more challenging than ever as customers become increasingly discerning about where and with whom they spend their money. Today’s brands recognize the importance of closely aligning with consumers’ lifestyles to drive engagement. The desired outcome is forging long lasting, highly personalized relationships built on trust. Many are redefining their missions to build deeper emotional connections — moving from assumption-based messaging and imagery to data driven, relevant and bespoke product offerings and interactions. The consistent challenge is that many retailers fall short of being able to deliver individual-level personalization.

Retailers’ customer loyalty programs can play a vital role in enhancing customer engagement when AI is part of the equation. Tailoring experiences is crucial, especially when catering to a diverse audience. Data-driven insights are key to drilling down to the individual-level. Merchants must scrutinize a specific customer’s preferences, actions, and needs in real-time to offer personalized and frequent rewards. This allows the retailer to strategically deploy special offers, digital gift cards or loyalty points that are more likely to inspire customer action.

With a comprehensive understanding of an individual’s behavior, retailers can create flexible and adaptable rewards programs—crucial elements in building meaningful relationships. Through consistent, personalized interactions, businesses can nurture data driven connections that enhance customer lifetime value. Digital rewards, like cash back offers, incentives and e-gifts, play a pivotal role in harnessing digital data trails to discern which incentives drive specific behaviors and engagements almost instantaneously. By utilizing AI with data, retailers can reinforce positive behaviors and gain tangible insights into customer motivations. From there, businesses can offer personalized and relevant interactions that enrich the customer experience and foster sustainable brand loyalty.

AI is key to helping retailers find the sweet spot between automation and personalization, continually refining experiences based on data driven, customer interactions.

Ed Wogan

SVP and Chief Merchant Officer