How AI Can Improve the Shopper Experience and Increase Retailers' Bottom Line

Change is now the norm in retail: brands are constantly tweaking their offerings to capture shoppers’ hard-earned money and improve their traditionally razor-thin margins. And their efforts are succeeding; the National Retail Federation predicts that retail sales in the U.S. will grow between 2.5 percent and 3.5 percent this year to between $5.23 trillion and $5.28 trillion.

With so much at stake, it’s unsurprising that retail has embraced artificial intelligence (AI) to continue transforming the industry. We’re watching a new era unfolding before our eyes. Businesses from traditional brands to AI-powered smart wallet startups have the opportunity to embrace AI, give customers the top-tier experiences they’re expecting, and rebound from slower sales due to high prices.  

Delivering Personalized Offers

AI’s ability to analyze consumer behavior in real time allows for highly personalized offers. By examining vast amounts of data, including purchase patterns, AI can understand each shopper’s preferences and predict their future needs with high precision. This means retailers can present the right offers at the exact moment a shopper is most likely to be interested.

Consider a consumer searching for running shoes. Using AI, retailers can detect this interest and instantly deliver personalized offers on running gear and complementary items like athletic clothing. This timely and relevant approach makes the shopping experience more enjoyable and engaging for customers. According to a survey by NVIDIA, 69 percent of retailers reported an increase in annual revenue attributed to AI adoption, highlighting the financial benefits of such personalized strategies.

Enhancing Customer Loyalty

According to a report by Accenture, 91 percent of consumers express a greater willingness to do business with brands that recall their preferences and provide relevant offers. Brands can harness AI’s capabilities to predict future purchasing behaviors, fostering customer loyalty and encouraging repeat business. By integrating their offers into platforms like Kudos, brands can ensure their promotions reach the right consumers at the right time. AI can forecast what a customer will buy next and when, enabling brands to strategically present offers that enhance loyalty.

For instance, if AI identifies a customer who frequently purchases travel at specific times of the year, a brand can push timely offers for flights or vacation packages. This proactive approach not only increases the likelihood of a purchase but also strengthens the customer's connection to the brand by consistently meeting their needs whenever they think about purchasing travel.

Boosting Sales With AI

AI has the power to revolutionize the retail industry by creating personalized shopping experiences, enhancing customer satisfaction, and driving sales through targeted offers. By partnering with AI-powered publishers, brands can deliver exceptional value to their customers and consequently see significant improvements to their bottom line.

According to Mordor Intelligence, AI in the retail market is expected to reach $40.49 billion by 2029, growing at a compound annual growth rate of 32.68 percent, showcasing the significant investment and growth potential in this technology.

By leveraging AI-powered technologies, brands can create a more engaging and rewarding experience to meet the evolving expectations of today’s shoppers and stay competitive as the entire industry shifts towards personalization to match consumers' growing demand for tailored experiences.

Tikue Anazodo is the founder and CEO of Kudos, a free AI-powered wallet that automatically calculates credit card rewards and benefits so you can get the most out of your cards when you shop.