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Redefining Retail: The Emergence of Generative AI and the Future of Customer Loyalty

A recent survey by Salesforce has shed light on the transformative role of generative artificial intelligence (AI) in the retail sector and its impact on consumer purchasing decisions. Despite being a relatively new technology, 17% of consumers are already leveraging generative AI for purchasing inspiration, highlighting its quick acceptance.

However, generative AI is just one facet of the technological evolution in retail. The journey of digital transformation, encompassing both online and offline experiences, has undergone significant changes over the past two decades. In 2021, digital transactions accounted for 59% of all transactions, a figure that decreased to 51% this year but is forecasted to rebound to 56% by 2025. Addressing this fluctuation, 60% of retailers are in the process of strategizing or implementing unified platform integrations to enhance consumer experiences and fortify brand loyalty.

The New Frontiers of Digital Shopping

Although traditional e-commerce platforms maintain their stronghold in the digital domain, emerging channels such as social media, messaging apps, and live streaming are making substantial strides. A remarkable 59% of consumers have made purchases via social media platforms, a substantial increase from just 15% in 2021.

Simultaneously, brick-and-mortar stores are undergoing a transformation by incorporating digital components. Presently, 60% of in-store shoppers utilize mobile devices during their shopping journey, primarily for online product research (36%), QR code scanning (32%), and facilitating "scan and go" purchases (18%). In response, retailers are empowering their associates with mobile devices and repurposing stores as e-commerce fulfillment centers.

Navigating Loyalty Program Challenges and Opportunities

Securing customer loyalty has consistently been a focal point for retailers, but the landscape is riddled with new challenges. The average number of loyalty program memberships per consumer has declined from 4.3 in 2021 to 3.4 today. Nevertheless, 75% of retailers currently offer loyalty programs, and an additional 22% intend to introduce one in the next two years. The onus is now on retailers to devise innovative and distinctive perks as traditional point-based systems no longer hold the same appeal for many shoppers.

As consumers navigate various physical and digital touchpoints throughout their shopping journey – from in-store browsing to social media purchasing – generative AI is poised to be a game-changer for retailers. It offers the potential to amplify personalization and reduce friction, ultimately enhancing loyalty and increasing wallet share.

Read the full report here



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