The Role of AI Agents in Building Loyalty and Driving Conversions

Retailers are spending more than ever to win repeat customers, but many are losing ground. As consumer expectations evolve, traditional loyalty strategies are falling short.

Every year, the data gets more grim:

• 61 percent of consumers say they’re less loyal to brands than they were just a year ago;
• 77 percent of Gen Z shoppers are open to trying new brands;
• more than 50 percent of shoppers say a single bad experience is enough to make them never return; and
• with salaries lagging behind inflation, price sensitivity is at an all-time high.

It's not just that consumers are fickle; it’s that expectations have fundamentally changed. People are more selective with their dollars and less forgiving when brands fall short. They want relevance, consistency and value, not just another promotion.

So the question isn’t whether consumers are still loyal. The question is: Are retailers giving them a reason to be?

Too often, the answer is no. Many retailers have become trapped in a cycle of overoptimization, chasing short-term conversions like clicks at the expense of long-term loyalty. CRM strategies lean heavily on batch-and-blast emails and rigid campaign calendars. The result? Fatigue, disengagement, and worst of all, churn.

The best brands are breaking that cycle. Instead of overloading customers with more marketing, they’re building smarter, more personal connections, earning loyalty by showing they actually know their customers with artificial intelligence-powered customer experiences.

Related story: How Agentic AI and Human Collaboration Are Enhancing CX

Opportunity: Personalization That Feels Personal

Today’s loyalty strategies are built on transactions and discounts. However, chasing repeat purchases through promo codes and points alone has turned into a race to the bottom. You can see it in the marketing — rigid calendars, broad audience segments, and messages that feel impersonal and interchangeable.

Why would a customer feel loyal to a brand that doesn’t feel loyal to them?

Take a common CRM example: targeting “tech enthusiasts.” That label might include a 19-year-old gamer and a mid-career IT professional, but lumping them into the same campaign ignores the nuance that actually drives engagement.

• The gamer might never open an email, but engages with SMS multiple times a week.
• The IT professional might ignore in-app notifications entirely but check email during work hours.

Traditional marketing systems can’t adapt to these behavioral differences, so both customers get the same messages, often at the wrong time, on the wrong channel, with the wrong tone.

This is where the next generation of loyalty takes root: experiential loyalty. It’s not just about what you offer, but how well you deliver it. The brands pulling ahead are using AI agents to make personalization truly one-to-one.

By understanding individual preferences, behaviors and timing, AI agents help brands to finally deliver the right experiences, in the right moments, in the right channels — moving beyond discounts to actual connection. In doing so, they’re creating loyalty that lasts far longer than a coupon code ever could.

How Retailers Are Rewriting Loyalty

Forward-thinking retailers are moving beyond segments and building personalization engines that operate at the individual level. By layering AI decisioning agents on top of their first-party data, they’re shifting away from rigid calendars and batch messaging and toward dynamic, real-time personalization at scale.

Traditional CRM tools rely on static rules: “If user clicks X, send Y.” Agentic AI works differently. These systems continuously learn from every customer interaction, adapting messages, timing, frequency and channel choices to optimize both immediate conversions and long-term loyalty.

Let’s revisit our earlier “tech enthusiast” example. Instead of sending the same generic campaign to both the gamer and the IT professional, AI agents would learn each of their preferences and adapt accordingly, texting the gamer twice a week with flash drops while emailing the IT professional during work hours with long-form product reviews. The same audience segment, radically different execution.

That’s the power of segment-of-one marketing. And that’s how the best retailers win loyalty today — not by shouting louder, but by listening, learning and deciding smarter. Smart retailers are laying an AI engine on top of their first-party customer data to create experiences that lead to loyalty. AI agents built specifically for marketing get past the limitations of batch-and-blast emails, triggered journeys, calendar restrictions. They can reach the full volume of your customers, but with the relevance of one-to-one personalization.

Retailers that embrace AI-driven decisioning gain a competitive edge — not by sending more messages, but by sending the right ones. The key is balancing incrementality with brand building, ensuring that every touchpoint deepens relationships rather than exhausting them. As AI reshapes retail marketing, the real question is no longer how often you communicate, but how intelligently you do so.

Tejas Manohar is the co-founder and co-CEO of Hightouch, a data and AI platform for marketing and personalization.