Research Shows Retailers Must Rethink Promotions in the Age of AI

By Dan Surtees, VP of strategy at XCCommerce

Consumers have more ways to find deals than ever before, from social media influencers to AI-powered search tools, and it’s driving them to become more proactive, selective and price-conscious. The shift is forcing retailers to rethink how promotions are designed and delivered.

Essentially, today’s shoppers aren’t waiting around for incentives to come to them. They’re hunting them.

A new U.S. consumer survey from XCCommerce reveals that today’s shoppers are more deal-driven than ever, and, to protect loyalty and increase margins, retailers must deliver consistent and accurate offers — no matter where consumers find them — and personalize incentives that make consumers feel seen.

AI creates a new deal gateway

One of the timelier findings from the XCCommerce survey is the increasing role that AI tools are playing in deal discovery. Many shoppers aren’t waiting for weekly ad emails to hit their inbox but are using AI to surface the best and most relevant offers available. The study shows:

  • More than 70% of shoppers are exploring AI tools to find better deals.
  • About one-third of respondents said they’re already actively using AI for deal-seeking.

Also interesting, 52% of consumers in the survey are in favor of retailers using AI if it leads to a better shopping experience, such as delivering personalized promotions, and 42% are open to retailers using AI as long as they can control their preferences.

What’s important to note here: Retailers need to create promotions and incentives that surface during AI prompts, and a big part of that is ensuring that all of their offers are consistent, streamlined across channels, and controllable. If offers aren’t structured clearly or don’t execute across channels, they may not surface on AI, and they’ll certainly upset consumers.

Value means personalized deals, not just saving money

Offers and incentives are typically built as a way to get consumers to try new products or build loyalty by helping them save money. However, more than a traffic-driving tool, consumers expect offers to feel personal to them.

This makes sense. If consumers have more tools at their disposal to find deals, they also don’t want to be overwhelmed by blanket offers coming from all directions. To cut through the clutter, retailers need to find ways to deliver personalized incentives to each consumer in the ways they prefer to receive offers. The study reveals:

  • 75% of consumers say it’s important that offers feel personalized.
  • 80% care more about getting a quality deal than simply the lowest price.
  • 83% say valuable savings or rewards keep them loyal over time.

The new consumer wants an offer that’s relevant to their needs, shopping habits and timing. When asked what makes an offer worth acting on, respondents ranked whether it applies to items they actually need higher than total savings.

Retailers that rely on mass promotions risk wasting discount dollars. Accurate, intelligent promotions that align with shopper intent create a stronger return, both financially and emotionally.

Read More: SalesTechStar Interview with Mark Walker, CEO at Nue

Consistency in promotions increases shopper trust

Personalization uplevels consumer engagement, but consistent and accurate offers are mandatory.

As consumers fluidly move between shopping via mobile or desktop, and in the physical store, they may research a product online, check a mobile app for availability, and complete a purchase in-store. The incentives and offers need to follow them on their journey. The study demonstrates:

  • Half of shoppers say they don’t care where they receive an offer as long as they work consistently across channels.
  • 52% say consistent prices and promotions make a retailer feel worth buying from.
  • 60% will abandon a retailer entirely if they encounter inconsistent pricing across channels.

Promotion execution has become a front-line loyalty issue. When a discount works online, but fails, or doesn’t stack correctly at the in-store checkout, trust erodes instantly. When loyalty rewards calculate differently depending on the channel, shoppers notice.

Retailers struggle with promotion systems that were built for simpler days, where offers were designed and managed in silos.

Today, incentives stretch across touchpoints, adding complexity to the process. Without a unified promotions strategy and approach, delivering seamless omnichannel incentives, retailers will struggle to earn shopper trust.

Promotions matter more than ever

Retailers are operating in a margin-sensitive environment, in which consumer expectations are high and competitive pressures are relentless. Promotions remain a primary lever for retailers to pull, a powerful tool that influences what consumers choose to buy.

Nearly half of the consumers in the survey say they buy more than planned or try new brands because of incentives. The growth potential and business value that incentives bring to a retailer are massive. But it only materializes when promotions are relevant, accurate, and executed at scale.

Promotions reflect a retailer; they reinforce trust. Today’s consumer wants an incentive personalized and aligned to their desires and shopping behaviors. Retailers need strategies in place to execute consistently across channels and be ready for a future of AI-powered deal-seeking.

AI promptsAI toolsAI-powered deal-seekingAI-powered search toolsBusinessConsumersFeaturedin-store checkoutincentivesloyalty rewardsMobile Apppromotions.retailerssales technologysalestechshoppersShopping Experiencesocial media influencersU.S. consumer surveyXCCommerce survey