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Yahoo
2 days ago
- Business
- Yahoo
Will AI ‘completely rewire' loyalty programs?
This story was originally published on CX Dive. To receive daily news and insights, subscribe to our free daily CX Dive newsletter. A growing number of brands are using AI to improve customer experience with loyalty programs and streamlined operations. These brands are using the technology to offer more personalized experiences and automate highly repetitive, manual processes. The technology is a game-changer, particularly for customer analytics. Loyalty program leaders have been able to segment customer data for years, allowing them to target offers to specific groups, said Patricia Camden, EY Americas loyalty leader. 'But with those segments, you're still just talking to a broad, generalized group that you've put into a bucket.' AI, on the other hand, takes it a step further. The technology enables brands to target offers to specific individuals by helping them understand 'what each human values' instead of 'pushing the same reward to everyone' or those within a particular segment, Camden said. AI also allows loyalty programs to actively shape consumer behavior and habits while deepening a brand's relationship with a customer, Camden said. 'It really allows the brand to tailor the rewards, messaging, offers and experiences to individual preferences and behaviors in real time,' Camden said. 'That's probably the most powerful thing about AI and how it can improve loyalty.' A fast casual restaurant, for example, could send a customer unique offers for new items to help 'unlock a secret reward' designed for that customer or provide them additional points for their loyalty, Camden said. 'It's really loyalty gamified but in a way that feels personal, not gimmicky,' Camden said. Those changes have the potential to disrupt existing customer relationships and establish new ones. 'Loyalty will become less about what a brand wants to push and more about how consumers want to engage,' Camden said. 'AI is going to completely rewire the role loyalty plays in the customer experience.' AI can help loyalty program leaders stretch their limited resources by helping create content for hyperpersonalized offers and optimizing campaign spend. 'It really saves marketing teams time and budget,' Camden said. Instead of assigning staff such tasks as exchanging and reconciling transactions between program partners or providing individual customer preferences to hotels and retailers, AI can manage such tedious tasks, said Brendan Boerbaitz, senior manager at Deloitte Consulting. AI can also improve predictive analytics. One EY client, for example, uses its loyalty program to ensure that customers renew their relationship with the brand each year and now uses AI to identify and target offers to customers who are likely to churn, Camden said. More and more loyalty programs are using AI for fraud detection, too. Unlike humans, AI can quickly 'connect dots at scale' to ensure points and benefits are issued correctly, said John Pedini, principal analyst at Forrester. 'It can help flag unusual patterns before they become expensive problems,' Camden said. However, before integrating AI into their customer loyalty programs, brands must 'develop use cases that provide clear and measurable value,' including personalization, segmentation, variant testing and low- or no-code campaign development, Pedini said. It's best to focus on applications of AI that take an existing process and make it better, more efficient or cheaper, Pedini said. Starbucks, for instance, uses its proprietary AI platform dubbed Deep Brew 'to drive automation, operational efficiency and loyalty engagement by identifying and incentivizing specific members with personalized offers and rewards,' Pedini said. But not all use cases need AI. Forcing AI on business problems that could be solved via more conventional, lower-cost solutions is a 'big pitfall,' Boerbaitz said. When deciding whether to implement AI, Boerbaitz urges brands to consider the following questions: If AI were stripped from the document, would it be clear what problem is being solved? Do I truly understand the specifics of the problem we're solving down to the level of the user? Is this problem underserved by other tools and techniques? AI adoption is a 'team sport' that requires cooperation to avoid redundant work and conflicting initiatives, and build data sets, tools and models for multiple applications, Boerbaitz said. 'It takes engineering, architecture, strategy, change management, data and loyalty teams all coming together to make AI programs in loyalty successful,' Boerbaitz said. It's also important not to rush the process. Brands should avoid launching an AI model too soon because the technology depends on high-quality data to deliver on its promises. Launching a model with outdated or incomplete data could lower accuracy and create 'more issues than it solves,' Pedini said. 'The worst thing you can do is have incomplete data sets,' Camden said. 'If the AI makes assumptions based on what it knows, you can end up sending something that is not appropriate or not what the client expects to see.' That can take away the 'emotional element' of loyalty programs, Camden said. 'If a brand lets AI take the wheel without real human guardrails, the customer experience could start to feel impersonal, off base and overcurated,' Camden said. Loyalty program managers should ensure their data is comprehensive, including all channels and touch points, and properly labeled, Pedini said. Sound data governance of policies, standards and procedures is also vital to ensuring privacy, preventing bias and complying with regulations, Pedini said. It's also essential for humans to be involved in loyalty programs because first-party data can help businesses improve their product strategy, brand positioning and service design. However, that won't happen 'if the machines take over,' Camden said. 'AI should not be used to replace our thinking.'
Yahoo
5 days ago
- Business
- Yahoo
Few consumers trust retailers to use their data responsibly, research finds
This story was originally published on CX Dive. To receive daily news and insights, subscribe to our free daily CX Dive newsletter. Just 1 in 5 U.S. consumers trust retailers to use their data responsibly, according to a Press Ganey Forsta survey of 2,000 people released Wednesday. However, more than two-thirds of U.S. consumers say they are willing to share their data if it results in more personalized and rewarding customer experiences. Fewer than one-third say they would consider switching retailers for a more personalized experience. Not all demographics feel the same about their data. Nearly 2 in 5 Baby Boomers say that personalization either doesn't matter to them or that they would never share their data with retailers under any circumstances. Retailers that want customers to trust them with personal data need to offer shoppers both value and transparency in return. As a baseline, retailers need to make sure that any data sharing is a trade off worth the potential downsides, according to Rebecca Becker, VP of retail experience solutions at Forsta. A combination of experience and communication is key to earning trust. 'Today's consumers are highly selective about the data they share – not because they don't want personalised experiences, but because they want assurance it's being used responsibly,' Becker said in an email. 'Clear communication, secure systems and immediate benefits like personalized discounts, early access and convenience features all play a role.' Retailers should also make sure customers know their data is enabling these benefits, according to Julie Geller, principal research director at Info-Tech Research Group. Consumers are more willing to share if they know how their input will lead to better experiences. 'Retailers need to move beyond viewing data collection as a compliance checkbox or a one-sided request for information,' Geller said in an email. 'Both transparency and consent are critical, but what sets leading brands apart is how they design data-sharing moments as part of a mutual value exchange.' Data sharing and trust building are each part of an ongoing relationship between customers and retailers, according to Geller. The most effective companies combine first-party signals with zero-party inputs, like style quizzes or delivery preferences, to show the customer that they are actively listening and adapting to their needs. While security breaches harm trust, the damage isn't irreparable, according to Becker. Rebuilding trust can be a matter of offering great experiences that put the customer first and continue to prove that their data is making their shopping experiences better. 'Retailers need to prove this value by offering tailored offers, loyalty rewards, and seamless service across digital and physical channels,' Becker said. 'Repairing trust isn't just about better tech, it's about showing customers they're seen and valued as individuals.'
Yahoo
25-06-2025
- Business
- Yahoo
Walmart's latest AI feature aims to help associates overcome language barriers
This story was originally published on CX Dive. To receive daily news and insights, subscribe to our free daily CX Dive newsletter. Walmart is rolling out AI-powered tools to its 1.5 million U.S. associates with the goal of offering more support for workers to help customers in real time, the retailer announced Tuesday. The new tools will be integrated into the Walmart associate app. The tools include a real-time translation feature that can facilitate multilingual conversations between associates and customers in 44 languages. The feature supports both text-to-text and speech-to-speech formats and includes Walmart-specific knowledge, such as recognizing the term 'Great Value' as the retailer's private brand. The retailer also plans to upgrade its existing conversational AI for associates in the coming months. The tool will offer step-by-step instructions for advanced support queries like, 'How can I process a return without a receipt?' Walmart is among a growing number of retailers putting generative AI apps directly in associates' hands to streamline their workdays and enhance customer service. Walmart associates already have experience with its conversational AI tool. More than 900,000 workers use the feature every week, totaling over 3 million queries daily, according to the company. The retailer is also introducing AI-driven task management, which uses the technology to prioritize and recommend tasks for associates. Early results have led to a reduction in the time store managers spend planning shifts for overnight stocking, and the retailer is piloting the tool for shifts other than stocking as well. Walmart has been experimenting with generative AI for two years with the goal of encouraging associates to use the technology every day. The retailer's earlier associate-facing AI implementation, which helped with inventory and let workers spend more time with customers, helped drive higher NPS during the 2023 holiday season. Earlier this month, Walmart also introduced AI for customers through Sparky, an automated assistant designed to help customers by summarizing reviews and planning purchases. While Walmart is one of the retailers at the forefront of generative AI integration for employees, the company isn't alone. The Home Depot is combining training and AI tools to improve associate product and project knowledge, which executives see as a key CX differentiator. Last year, Target rolled out its own AI assistant for associates, Store Companion, which answer process and procedure-related questions. Other examples include Verizon, which last year said that its generative AI assistant helped in-store associates find answers to 95% of customer inquiries, and Office Depot, whose associates use the ODP Personal Assistant to answer common questions. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
23-06-2025
- Business
- Yahoo
For travel loyalty program success, customers want lower costs, discounts
This story was originally published on CX Dive. To receive daily news and insights, subscribe to our free daily CX Dive newsletter. Fewer than 1 in 5 consumers book travel through loyalty programs, according to an arrivia report released earlier this month. Over half of consumers said lower prices, discounts and exclusive deals would increase their likelihood of booking through a loyalty program. Cost was the No.1 factor to increase bookings across all generations. 'While loyalty program enrollment remains strong, far fewer travelers are actually using these platforms to book their trips,' Jeff Zotara, CMO at arrivia, said via email. Instead, the lion's share — 72% — book through online travel agencies or direct vendor booking sites. Loyalty program leaders trying to increase bookings through their programs cannot ignore the cost-conscious environment they're operating in. Cost is the primary reason consumers are scaling back travel. Nearly 3 in 5 respondents cited affordability as the reason they plan to travel less this year. There are three challenges for loyalty program leaders that weigh on bookings, according to Zotara: A lack of perceived value; a user experience that often lags behind modern booking sites; and a lack of personalization. CX leaders should also pay attention to the preferences of younger generations who are shaping loyalty and travel trends, Zotara said. Gen Z is the most active travel loyalty cohort and the most likely to base their travel plans on loyalty program offers, according to the survey. Nearly one-quarter of respondents in this age group use their credit card program or other travel loyalty program to book travel. 'By 2030, millennials and Gen Z will account for over half of U.S. leisure trips, up from one-third in 2023,' Zotara said. 'These younger, digital-first travelers expect seamless UX, flexible rewards, and trip planning tools that mirror the convenience of [online travel agencies].' The challenge for traditional travel loyalty programs is to adapt to meet the expectations of younger travelers without losing touch with long-time members. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16-06-2025
- Business
- Yahoo
Why RCS is gaining traction among business and consumers alike
This story was originally published on CX Dive. To receive daily news and insights, subscribe to our free daily CX Dive newsletter. A majority of business leaders say RCS, or rich communication services, will be game-changing for business messaging, according to a Sinch report released Monday. Sinch surveyed 2,800 consumers globally and more than 1,600 business leaders. Nearly 9 in 10 business leaders are at least somewhat familiar with RCS, the survey found. RCS is a richer form of text messaging that allows for better conversational abilities and richer visuals. It even lets customers take next actions within the same channel. 'RCS is an app-like experience in the messaging channel. It is a total game changer,' Brenda Fackler, VP of client services at Sinch. 'The conversational abilities of RCS really do start to create an experience that centers on the customer.' RCS is becoming more popular among businesses and customers alike. More than 4 in 5 consumers prefer RCS over traditional text messaging, according to a Twilio survey released earlier this month. Three-quarters of businesses plan to invest in RCS in 2025. Apple instigated the recent surge in popularity, according to Fackler. While the technology has been used on Android devices for a while, in October, Apple announced its support of RCS. "It's been around for a long time, but it was really Apple's announcement that they were going to support the format that changed things,' Fackler said. 'They started making beta versions available that people could get in and play around with. With roughly 50% of the market, that just made a huge difference.' One of the biggest advantages of RCS is security. First, businesses go through a verification process. The consumer then receives a message from a verified sender and logo. Messages are also encrypted in transit, making it more secure than SMS. Nearly half of business leaders believe RCS will improve security, but they also expect it to increase customer engagement and trust. Some of the features of RCS are simply practical. When a customer receives a message from a business using RCS, it also comes with a virtual contact card, or V card, so customers can further engage. 'Not only is it branded, named, but you can also have a phone number, have a link to download the app,' Fackler said. Such information 'isn't sexy, but it's incredibly pragmatic and powerful.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
