The author confuses artificial intelligence with automation, a common mistake. Automation is certainly integral to efficient loyalty marketing on a large scale. Whether it is effective is a different question and the marketing literature is mixed on that question. But nowhere is AI integral to this process – a good modeler can do just as well, potentially better. Then you build the automation around the model, checking back to make sure the model hasn’t gone astray.

Most brands and retailers haven’t even approached 1 percent of AI’s potential.

I agree with Bill’s statement “Enhancing your analytics engine with AI can make it possible to optimize individual experiences at scale” but… that is only a first step and will fall short of meaningful personalization in the long run.

The biggest blunder I see everywhere AI is employed in a consumer/user-facing scenario is keeping it under the covers away from users. AI is most often employed as a secret analysis mechanism which limits it to being only as good as underlying algorithms and the assumptions driving them. There is a complete fear of using those assumptions as a basis of asking consumers/users if the AI-generated conclusions are correct or if not, where they are wrong or what their preferences are. Doing as I describe alongside other queries strategically placed (like in a product discovery phase) greatly enhances the USABLE data that can drive AI and its subsequent personalization.

AI will be integral to personalization at scale. It already is at a basic level. It is only getting better. Currently, at a high level, AI makes mistakes. At lower levels it’s almost 100 percent. As the technology improves, the margin for error will shrink to a point where a brand can, with confidence, use AI to talk to customers “one-to-one.” We’ll move from personas to a truly personalized experience.

I have never had a truly personalized experience with any chain, big box or grocery store. The closest thing to it is a general email that leads with ”Dear Georganne” or, more frequently, “Dear Bender.” Truly personalized experiences are still made through a store associate who takes the time to tell me about an event, an item I might like, or who sends a handwritten note to say thank you for a purchase.

If AI can help retailers connect with shoppers in what appears to be a natural and organic communication then I am all for it. I just haven’t seen it yet.

A lot of the attraction of artificial intelligence is the belief that it removes both the vulnerabilities and practical boundaries of human involvement – as if it were some kind of auto-pilot. The truth is that artificial intelligence is only ever as good as the human intelligence behind it. This requires a deeper understanding of the human experience of marketing, of being a consumer. Such a commitment is a departure from the prevailing wisdom that created today’s most prolific data-driven tools – like programmatic advertising, retargeting and other experiences of marketing that have frustrated, more than aided, consumers.

Artificial Intelligence (AI) can and will be key to delivering personalized customer journeys. The challenge as mentioned above is scaling it effectively across channels. It is almost impossible to achieve cross-channel personalization without eliminating the separate silos of automation that exist in almost every retail organization. Amazon does it well in one channel (web) because it is centralized, cloud based and services a single channel.

The store must move to the cloud to allow scaling AI across the in-store and web channels that drive today’s omnichannel loyalty marketing.

Increasing efficiency (the only real opportunity in AI) is never the way to long term success — but it’s one of the important things to do along the way to avoid failure.

Somehow, business culture has become so wrapped up pursuing efficiency that we’ve forgotten what customers really want: Opportunity to buy the products we want in a well structured store/online store, at good value, and supported by good customer service.

AI can play only a small part in this. Unfortunately, it appears that the process of implementing AI systems is so difficult that retailers might lose years of strategic development getting their AI in place. None of us can let that happen.

AI is a smart direction, but won’t deliver long term strategic value.

I’m not sure it’s the technology that is showing limitations, but more commonly it is the practitioners lacking imagination on how to best leverage it. Part of that comes from treading into new waters and not fully knowing what could be possible, but one thing is for sure – that problem won’t be solved by sitting out on the sidelines.
Loyalty marketing, with its long-term orientation, is the perfect sphere for utilizing AI.

On the topic of achieving true 1:1 personalization, a major goal of loyalty marketing is helping customers feel part of the brand community – so while many brands today are losing sleep over the arduous task of customizing every touchpoint, they must not lose sight that it is still critical that they create an environment where customers can say to brands “I like what you are.” Not what you are trying to be to me, but what you are. When that identification happens consumers will respond by actually personalizing themselves to the brand, and a loyalty marketer’s job becomes just little bit easier.

While it is true that in the future artificial intelligence will play a role in delivering marketing personalization, it is important to recognize that the capabilities described in this article have been available through traditional modeling and marketing technology for a number of years. The strategy of bringing the “right offers on the right products to the right customers through the right channels at the right time” has been present in marketing for many years; however, customization has been available only to this point in segmentation form.

Now, with the introduction of more powerful processing capability, that segmentation can be delivered to smaller and smaller groups, getting closer to the end goal of personalizing communication at a 1:1 level.

Even that level of personalization has been done for limited use cases over the past 10+ years, e.g. Kroger/Sainsbury coupon personalization.

AI will not introduce any new strategies at the beginning; rather the promise is to increase the level of personalization — an important goal, but not a revolutionary one.

People are difficult to predict, things are easier. I think AI machine learning can be used to derive pattern data for loyalty programs, but right now it takes human to understand the nuances and emotions that comes with certain customer interactions and offers. AI is a better fit in the short term in areas like supply chain and merchandising I think where there is rich data, less privacy issues and very little emotions involved.