Nine in ten (87%) of UK retailers are investing in customer-first, loyalty-driving initiatives, with many turning to AI as a vehicle for growth, the latest research from American Express reveals.

Original research of over 500 senior retailers in its annual study showed almost half (45%) plan to either launch or enhance a loyalty offering this year, with two-thirds (64%) of brands believing customers now expect loyalty rewards when shopping.

AI investment to power customer connection

Retailers are also increasingly turning to Artificial Intelligence (AI) as a vehicle for forging stronger customer connections to drive growth.

Almost half (46%) who already use AI said customer experience deployments are the main focus for the technology. Generative AI (Gen AI), including chatbots, topped the list for AI investment for UK retailers, with 43% already using Gen AI enhance help resolve customer queries.

“UK retail’s superpower has always been how the sector adapts to evolving customer demands,” said Dan Edelman, UK GM for Merchant Services at American Express. “From investment in AI-powered personalisation, richer rewards programmes and a broader menu of payment options, merchants are prioritising ways to build lasting customer relationships.”

A blended approach of AI speed and human empathy

However, separate research from Ventrica suggests that while AI can enhance some elements of the buying journey, shoppers still value human-to-human interactions.

Its poll of 2,000 UK shoppers showed that just 4% felt positive retail experiences were delivered by AI alone. And, while over half (53%) found AI chatbots were able to successfully resolve their queries, this was -34 percentage points lower than the 87% who said calls to human customer services teams were more effective in query resolution. 

Its research found that increasingly shoppers want blended customer experiences, which combines the speed of AI with the empathy of human interactions.

“When customers receive fast, empathetic and emotionally engaging support, they develop a stronger connection to the brand, leading to increased loyalty and higher spending,” Ventrica’s CEO, Iain Banks, said.