Consumers expect tailored shopping experiences, and much of the time, they get them: 73% of customers said most companies treat them as unique individuals, which leapt up from 39% between 2023 and 2024. AI-enhanced shopping is already shaping this personalised eCommerce landscape — $229 billion (19%) of global online holiday season sales were influenced by AI recommendations, offers and customer support in 2024.
At the same time, internet users are more aware of how their data is being used and may find tracking intrusive meaning personalisation is reaching an inflection point. Tailored experiences help drive brand affinity, but careless data use and poor protection from retailers could ruin the relationship. How can brands continue to build loyalty and win the trust of data-conscious customers?
In the age of AI, eCommerce is poised to benefit from hyper-personalisation at scale, with the potential to create custom experiences that can move the needle on revenue and loyalty. See what hyper-personalisation will look like and explore AI’s role in the shift toward treating customers as individuals on every digital buying journey.
Personalisation in eCommerce can serve up options such as product and brand suggestions based on buying history or basic demographic trends. Hyper-personalisation tailors the experience much more — users may be presented with results based on their location, recent clicks and interactions.
While traditional personalisation is reactive, hyper-personalisation works in real-time, offering customised touchpoints based on current actions as well as predictions of what a user will do next. Predictive analytics can forecast future actions and behaviours, using machine learning and AI alongside unified customer data platforms and insights from data warehouses to deliver the most relevant options and craft bespoke journeys.
Retailers looking to boost loyalty must strike a delicate balance, ensuring hyper-personalisation is helpful, not unsettling. This can be a common complaint, particularly among US and UK consumers, with 56% of survey respondents in these locations feeling “creeped out by personalised ads”. At the same time, hyper-personalisation is a non-negotiable part of the eCommerce experience, and 7 in 10 Gen Z and millennial consumers said they would quit a brand that doesn’t use it.
How can retailers meet these needs without intruding? The power of choice and careful, pared-back data use are key to gaining consumer confidence: “options to opt out”, “minimal data collection” and “clear privacy policies” were the top three criteria that would make survey respondents feel more comfortable with personalised ads. Brand loyalty is fragile amid cost-of-living crises and rising inflation globally, so instilling confidence is an important first step. To focus on retention, companies are expected to invest more heavily in personalised loyalty programmes to drive repeat business and boost lifetime value — loyalty rewards, customer service, quality and pricing were found to be the top factors driving brand loyalty. In fact, 72% of customers said they would remain loyal to companies that deliver faster service, and 65% said a more personalised experience would win their loyalty. There is significant opportunity for AI-driven experiences that ensure customers are treated as individuals, presenting very real prospects to deepen relationships and secure loyalty.
Emerging AI applications that will progress hyper-personalisation as a driver of customer loyalty include:
AI’s ability to create unique experiences without reliance on third-party cookies is important for customers’ comfort levels. UK consumers found ads based on browsing history and social media behaviour to be the most invasive, so the ability to deploy hyper-personalisation at scale using earned first-party and zero-party data is pivotal. While Google has backtracked from removing third-party cookies in Chrome, the direction of travel still needs to be privacy first to win trust and ongoing custom.
Regulators are watching AI implementation closely. The EU’s AI Act will be fully applicable from August 2, 2026, directing that websites cannot use AI to “trick” users into spending money. This includes AI-enabled dark patterns designed to manipulate users into making substantial financial commitments — AI agents must be helpful, not coercive. The UK’s Guidance on AI and Data Protection also emphasises considerations of fairness, protecting people and vulnerable groups.
To put effective guardrails in place, retailers must be able to provide human oversight, offering explanations for how and why AI models make the recommendations they do to avoid bias or manipulation. Technology choices should be carefully considered and audited regularly, and checks must be in place to avoid potential bias impacting offer eligibility and sales tactics.
To get under the hood of hyper-personalisation and track success beyond click-through rates, retailers can consider these metrics:
According to Harvard Business Review, organisations already consider AI and generative AI to be more than back-office efficiency enhancers and are prioritising customer-centric use cases. 40% are using AI chatbots for customer service, but it is still early days. The eCommerce retailers that succeed will be those that use AI’s full capabilities to make sure customers are heard, understood and have seamless experiences that feel natural. AI is now uplifting sales — to drive repeat custom and brand loyalty, retailers must focus on understanding their customers’ needs and perceptions, then building an ecosystem where hyper-personalisation makes mindful use of data and never side-steps into intrusion, instead offering genuine value.
Talk to NashTech about customised AI use cases to drive profitability in eCommerce, or learn more about how our AI solutions achieve impact.