How Retailers Are Using AI And Emotion To Build Loyalty In 2025

Forbes

4 days ago

Artificial Intelligence
Customer loyalty isn't something retailers can take for granted in today's crowded marketplace. It's something they have to earn and re-earn through ongoing, meaningful engagement. And changing consumer behavior is only adding to the complexity. Shoppers today no longer think solely in terms of 'online' or 'in-store.' According to VML's Future Shopper 2024 report, 61% of shoppers globally want seamless communications across sales channels, with their journey documented and data following them the whole time – up five percent from just one year prior. They expect what is often called a 'phygital' experience: a seamless journey that spans digital and physical channels, where retailers can adjust to customer preferences, life events, and life stages in real time.
To meet these rising expectations, retailers are reimagining loyalty as not a points system or occasional reward, but an ongoing relationship. A recent report from Braze, the 2025 Global Customer Engagement Review (CER), explores the ways leading brands are stepping up to meet the moment by rethinking how they engage and retain their audiences. According to the report, leading retailers break away from a one-size-fits-all approach by blending together AI-powered personalization, emotional resonance, and experimentation. These retailers are treating loyalty not as a fixed outcome, but as a continuous conversation – one that is shaped at every touch point, treating it both as an art and a science.
AI is powering the next generation of retail engagement
It's no secret that AI is now a key driving force behind the next generation of retail experiences. Retailers already use it to analyze sentiment, predict behavior, and personalize at scale, with leading brands being 39% more likely to use AI to adjust messages based on real-time interactions. As AI becomes more embedded in workflows, it's not just about automating tasks, but also unlocking new levels of impact. Braze Chief Product Officer, Kevin Wang, shared 'the real magic of AI is in helping marketers operate with greater efficiency and creativity. It allows teams to deliver personalized experiences in the moment faster and more seamlessly than ever before, while driving meaningful business results.'
But with great power comes greater responsibility. As AI and data driven strategies advance, so does the need for transparent, consent driven data practices. According to a recent Prosper Insights & Analytics survey, 58.5% of consumers are either extremely or very concerned about AI using their data, signaling a growing public unease that can't be brushed aside. In response, retailers are increasingly cautious about how customer data is used and shared.
Prosper - How Concerned are You About Privacy Being Violated From AI Using Your Data
More notably, Braze's 2025 Retail CER shows that internal data sharing now outweighs legal or regulatory worries among surveyed marketing executives, suggesting that today's retailers are motivated not just by compliance, but by a deeper commitment to doing right by their customers. The future of AI-powered retail engagement depends not only on smarter technology, but also on how thoughtfully it's applied, in addition to how well it sustains consumer trust. As marketers unlock new levels of capability, the next challenge is ensuring those interactions feel authentic, and emotionally resonant.
Leaning on technology to drive emotional connection
Beyond efficiency and seamless journeys, retailers that are doing this well today are leaning into technology to listen to their customers' digital body language, delivering messages that resonate in the moment and create emotional connections, not just transactions. Braze data found that brands that are emotionally connecting with their customers are the ones who are more likely to exceed their revenue goals. Moreover, top leaders show a strong willingness to course-correct when messaging misses the mark.
According to Prosper Insights & Analytics, 73.3% of shoppers prefer to speak with a live person while making online purchases. This highlights that technology should enhance, not replace, the human element of engagement.
Prosper - Prefer To Communicate With Live Person or AI Chat Program for Online Shopping
Technology allows brands to reach customers one-on-one, but without great content, those connections fall flat. If the endgame is enduring relationships with customers, a focus on customer retention and the relative cost of customer acquisition makes perfect sense. But what does that mean in practice? It means using customer data more efficiently, leaning on technology to enhance, not replace human connection, and embracing a culture of experimentation to continuously improve. In fact, Braze data shows that 93% of retailers rely on technology to add emotional resonance to their messaging, whether through personalized channel preferences, milestone triggered messages, or community based campaigns.
A strong example of this can be seen when looking at e.l.f. Cosmetics, a brand under e.l.f. Beauty. The company partnered with Braze and Stitch to revamp its digital engagement strategy and loyalty program. By expanding into channels like SMS and push notifications, the company saw a 125% increase in monthly mobile app usage (over six months) and stronger customer connections. This demonstrates how creative, cross-channel messaging can drive both emotional resonance and measurable results.
Culture of experimentation separates leaders from the less agile
Leading retailers share a common trait: they work collaboratively and prioritize frequent experimentation. There is no doubt that the most successful teams are agile, cross-functional, and committed to refining engagement strategies to uncover valuable customer insights. These efforts go beyond marketing alone. 'The most forward-thinking retailers treat experimentation as a team sport. When marketing, data, and engineering come together around a shared goal, that's when real innovation and customer understanding happens,' shared Wang.
Top brands are bringing in analytics, engineering, and other teams to build a more robust and dynamic understanding of their customers. Still, there's room for growth. While many retailers have embraced experimentation, too few are breaking down internal barriers. This lack of shared ownership creates gaps that could be closed through stronger communication and alignment. Ultimately, retailers that foster a culture of testing and collaboration are far better positioned to meet changing customer expectations and lead with greater agility.
Winning Loyalty is an Ongoing Conversation
Loyalty isn't a one-and-done achievement; it's a continuous dialogue between brands and their customers. To win loyalty, retailers must listen closely and evolve with each interaction. AI and emotional resonance give retailers the tools to do this at scale, but it's the commitment to transparency, experimentation and human connection that sets leaders apart. The retailers who will thrive in 2025 and beyond will be those who lean into their customers' digital body language, and treat engagement as a relationship to be nurtured, not a transaction to be optimized.