Brands need to be prepared for the impact AI is set to have on myriad digital commerce components—think personalization, site optimization, marketing, inventory management and logistics, omnichannel product discovery, customer service and fraud prevention. The number of businesses adopting AI has grown by a staggering 270% over the past four years, and as the pandemic has increased the popularity of online shopping, customers are demanding quicker, more seamless, hyper-personalized experiences. AI provides the technology and advanced insights to meet those expectations.

We are in a personalization/privacy paradox, and the proof is in the pudding: 80% of consumers are more likely to make a purchase when their experience has been personalized. People seek to be known but also expect to have their privacy protected, and with tougher data protection requirements and rising customer concerns, achieving this balance has never been more challenging or more important. With the demise of third-party data, brands must lean into first-party data; using it wisely and being transparent about requests for further data should be the cornerstone of an approach to personalization that’s based on trust.

Loyalty and retention are king, with 52% of consumers citing brand affinity

and experiential benefits as top drivers of membership retention. As noted above, a personalized experience is a key differentiator for retailers and is particularly important in 2023, with consumers navigating the increased cost of living—since they are now more inclined to switch brands based on price and rewards. Brands need to become skilled at shaping product content to fit individual consumer preferences and ensure subscribers have flexible options.