Some of the UK’s largest retailers are lagging behind smaller competitors in deploying AI-powered personalisation, potentially missing opportunities to improve conversion, revenue and customer loyalty, according to new research.
The Race to Unified Commerce report from commerce technology specialist PMC and Retail Economics found that 15% of enterprise retailers with turnover of £1bn or more have yet to deploy AI personalisation across pricing, offers or product recommendations.
This comes despite evidence of commercial benefits among businesses already using the technology. Some 42% of retailers said AI deployments had improved sales, while half reported higher conversion rates and 53% saw improvements in customer retention.
Mid-market retailers appear to be leading implementation, with 58% having fully deployed AI personalisation. Across the retail sector as a whole, however, the figure stands at 46%, falling to 36% among smaller businesses.
The findings suggest there is still considerable scope for e-commerce teams to improve how customer and behavioural data is translated into personalised digital experiences.
Consumers appear to recognise the gap. Separate research cited in the report found 44% of UK shoppers remain frustrated by personalisation during their buying journeys, while 45% expressed frustration with AI-powered experiences, including poor product recommendations.
According to PMC, technologies such as AI-driven recommendations, dynamic pricing and tailored promotions can deliver relatively rapid returns, but successful implementation depends heavily on the underlying technology environment.
Centralised analytics, connected customer and operational data and modular architectures are identified as important foundations for deploying personalisation consistently across channels.
Rich Lowe, CEO of PMC, said the challenge for large retailers was not necessarily access to AI or a lack of ambition, but the difficulty of operationalising it across complex technology estates.
“Retailers need to be able to connect customer and operational data and turn that insight into action consistently across channels,” he said.
Lowe added that as AI becomes embedded throughout more of the customer journey, the difference between retailers capable of progressing rapidly from experimentation to execution and those constrained by technology complexity will become increasingly apparent, both in customer experience and commercial performance.
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