Retailers ramp up investment in AI and loyalty to secure shoppers, data reveals

British retailers are doubling down on customer experience as competition intensifies in both physical and digital spaces. According to new research, 87% of retailers are prioritising initiatives to attract and retain shoppers, from launching loyalty schemes to experimenting with AI-powered personalisation.

The American Express annual survey of 500 retail decision-makers revealed 82% of respondents expect to expand in 2025, up from 72% last year. Much of that ambition hinges on customer loyalty, with nearly half of retailers planning to roll out or enhance reward programmes in response to rising consumer expectations.

AI is at the heart of these loyalty strategies. Nearly half of retailers already using the technology say it's focused on improving customer experience. Generative AI, including chatbots and product search, is now the top tech investment for many, a dramatic leap from last year’s more cautious approach.

The in-store experience remains crucial, too. 38% of retailers say they’ll open new locations this year, particularly in the beauty and fashion sectors. A strong 88% say experiential retail,  from interactive AR tools to exclusive events, is essential to boosting footfall.

Payments have emerged as a strategic priority. Nearly three-quarters of respondents believe customer expectations at checkout have evolved, while 60% say offering more payment options would boost sales. One in three describe their current payment systems as outdated.

Dan Edelman, UK General Manager of Merchant Services at American Express, said: "UK retail’s super-power has always been how the sector adapts to evolving customer demands. From investment in AI-powered personalisation, richer rewards programmes and a broader menu of payment options, merchants are prioritising ways to build lasting customer relationships."