Artificial intelligence has rapidly transitioned from industry buzzword to marketing workhorse, with a significant 92% of marketing professionals leveraging AI in their daily operations.
However, a recent study by SAP Emarsys, surveying over 10,000 consumers and 1,250 marketers, reveals a growing disconnect between the benefits businesses derive from AI and shoppers’ increasing distrust, particularly concerning the use of their personal data. This emerging “trust gap” threatens to undermine the personalized shopping experiences brands are diligently striving to create.
The adoption of AI in marketing has been swift and decisive. According to Sara Richter, CMO at SAP Emarsys, “AI marketing is now fully in motion: it has transitioned from the theoretical to the practical as marketers welcome AI into their strategies and test possibilities.”
The appeal for businesses is undeniable. A substantial 71% of marketers report that AI accelerates campaign launches, saving them an average of two hours per campaign. This newfound efficiency allows teams to reallocate their time to more strategic and creative endeavors, as reported by 72% of respondents – a common benefit touted by AI proponents.
The positive impact on the bottom line is also evident. Sixty percent of marketers have witnessed an increase in customer engagement, and 58% have experienced a boost in customer loyalty since integrating AI into their marketing strategies.
Yet, consumer sentiment tells a different story. The SAP Emarsys report highlights a “personalization gap,” indicating that marketing efforts are often falling short of consumer expectations. Despite significant investment in AI-driven personalization, 40% of consumers feel that brands do not truly understand them, a substantial increase from 25% the previous year. Compounding this issue, 60% of consumers find the majority of marketing emails they receive to be irrelevant.
Delving deeper, the report uncovers a burgeoning crisis of confidence regarding the handling of personal data in AI-powered marketing. Globally, 63% of consumers express distrust in AI’s handling of their data, a marked increase from 44% in 2024. This unease is even more pronounced in the UK, where 76% of shoppers harbor concerns.
This erosion of trust coincides with the implementation of new regulatory frameworks. A year after the introduction of the EU’s AI Act, over a third (37%) of UK marketers have revised their AI strategy, with 44% stating their use of the technology has become more ethical.
This creates a tension that is top of mind for industry players: how to maintain responsible AI practices without stifling innovation. While the AI Act provides greater clarity, over a quarter (28%) of marketing professionals express concern that overly stringent regulations could hinder creativity.
As Dr. Stefan Wenzell, Chief Product Officer at SAP Emarsys, notes, “regulation must strike a balance – protecting consumers without slowing innovation. At SAP Emarsys, we believe responsible AI is about building trust through clarity, relevance, and smart data use.”
The message to retailers is clear: demonstrate the value proposition of AI to consumers. A majority of shoppers acknowledge the benefits of AI in simplifying (55%) and expediting (53%) the shopping process, utilizing it for product discovery, price comparison, and gift idea generation. The demand for helpful AI exists, but it must be coupled with transparency and robust privacy safeguards.
Certain brands are successfully navigating this challenge by prioritizing the human element. According to Sterling Doak, Head of Marketing at Gibson, it is about thinking differently. For Gibson, AI fuels human creativity rather than just automating tasks.
Australian retailer City Beach has also achieved success by leveraging AI marketing to enhance customer retention. Mike Cheng, Head of Digital at City Beach, realized the potential of AI to identify and re-engage at-risk customers.
“AI was able to predict where people were churning or defecting at a 1:1 level, and this allowed us to send campaigns based on customers’ individual lifecycle,” Cheng explains. This strategy resulted in the successful re-engagement of 48% of those customers within a three-month period.
These success stories share a common thread: a commitment to solving tangible problems for consumers. As retailers delve further into what SAP Emarsys terms the “Engagement Era,” the path forward is becoming clearer. Investment in AI is projected to continue, with 64% of marketers planning to increase their spending in the coming year.
The current challenge lies not with the technology itself, but rather with its implementation. Retailers must bridge the gap between their actions and consumer perceptions by offering genuine value beyond basic personalization, ensuring transparency in data usage, and demonstrating that data sharing translates into enriched customer experiences.
The AI revolution is upon us, but for it to achieve widespread success, marketing professionals must prioritize the individuals on the receiving end of these technological advancements.
Original article, Author: Samuel Thompson. If you wish to reprint this article, please indicate the source:https://aicnbc.com/8281.html
