Businesses worldwide are embracing the potential for artificial intelligence (AI) to provide personalised customer experiences, but customers remain cynical. This year’s report shines a light on how businesses are experimenting with AI to differentiate and drive business growth, and provides guidance on how to get this right, starting with the critical need to raise consumer confidence in the technology.
To power even more sophisticated real-time customer experiences, businesses are turning to AI to harness high volumes of real-time data and power their personalisation efforts. According to the report, 92% of global businesses are now using AI-driven personalisation to drive business growth. Four in five (81%) organisations also believe recent AI technology has the potential to positively impact customer experiences.
However, a disconnect exists between this enthusiasm and the comfort level of consumers: only 36% of European consumers are comfortable with companies using AI to personalise their experiences, and under half (49%) trust brands to keep their personal data secure and use it responsibly. AI-driven personalisation is only as good as its underlying dataset and, without robust data, customer experiences will likely miss the mark for consumers.
To maximise the potential of AI thoughtfully and responsibly, companies need to invest in data quality, leveraging effective, real-time data management tools and continuing to increase their use of first-party data. As digital natives, Gen Z are both more influenced by personalisation and more willing to embrace AI. In fact, a third of Gen Z consumers already expect AI to be used in their experiences with brands. For example, nearly three quarters (72%) of Gen Z consumers say that personalised experiences have influenced them to make a purchase. This compares to 66% of millennials, 57% of gen X and 42% of boomers.
Meanwhile, only 15% of Gen Z consumers report being uncomfortable with AI being used to help brands personalise their experiences. This is notably lower than millennials (24%), gen X (34%) and boomers (43%).
Sixty-two percent of business leaders cite customer retention as a top benefit of personalisation, while nearly 60% say personalisation is an effective strategy for acquiring new customers. Consumers also increasingly confirm the value of personalisation, with over half (51%) of European respondents saying they will become repeat buyers after a personalised experience.