It’s only been a few years since a product personalisation was something offbeat that only coolcats could have afford. Today, it is a baseline expectation. Having managed operations across more than 40 countries, I have watched a consistent pattern in how consumers perceive technology.
The tools that once drove significant conversion spikes — generative assistants, predictive logistics, smart recommendations — have become the industry standard. Customers are no longer impressed when a site remembers their size or suggests a matching accessory. They just assume the interface will work that way. Thus, the more companies offer, the more people expect.
This creates a paradox for the 2026 retail. As algorithms become more efficient, they provide less differentiation and become less effective at helping a brand stand out. When every competitor uses a similar high-end tech stack, operational precision levels out. The question for entrepreneurs is no longer ‘Are you using AI?’ but rather ‘What else can be done?’
AI as the Entry Point
With nearly 90% of retailers actively using AI for brand and product growth and the cost of generative tools dropping by half annually, it’s become kind of a fee you pay just to stay in the game. Still, there’s a great difference between a frictionless transaction and a loyal customer. One is handled by an algorithm, the other requires a human touch.
This shift is driven by the customers themselves. Data from Adobe shows that 53% of consumers now use AI tools to shop wisely. Since September 2024, e-commerce traffic from AI assistants has been doubling every two months.
Amazon launched Rufus, an AI conversational shopping assistant, in beta in February 2024. Trained on Amazon’s entire catalogue, customer feedbacks, web info, it attracted 250 million repetitive shoppers by Q3 2025. Monthly active users jumped by 140%, and users chatting with Rufus were 60% more likely to actually buy something.
When the world’s biggest retailer makes AI personalisation a new bare minimum, the rest of the e-commerce follows: Walmart with ‘Sparky’, Shopify with agentic shopping, ChatGPT and Google developing commerce agents. At Flowwow, we launched our AI Gifting Assistant to help users with finding a perfect gift for their loved ones. For us it’s just the beginning, as value is formed at the level of context and meaning, not just data processing.
The Next Competitive Layer
As technical efficiency becomes universal, we can see a new hierarchy in retail. The base lawyer goes to execution. It covers speed, logistics, and reliability. Then comes relevance, with an emphasis on understanding and adapting to customer’s needs. Emotional connection gets to the top, with its trust, shared values, and the feeling of being understood.
Emotional connections mean more than discounts when it comes to brand loyalty and retention. A Bloomreach study found that over half of marketing professionals agree emotional engagement drives more value than financial incentives. Meanwhile, for 88% of consumers a lack of trust can be a real barrier when buying from a particular brand. Quite a big percent of users still don’t feel comfortable with using AI features, especially when it comes to a fully automated format. It should be the business priority to make an AI journey as smooth as possible to build strong relationships with customers.
Nike totally changed their marketing strategy when their DTC digital sales focus, data-driven transactions, and performance marketing led to revenue falling by 10% to $46.3 billion, and digital sales dropping by 20%. By 2025, the company returned to its ‘emotional DNA’ and traditional athlete-centred storytelling format. This shift from operational speed to emotional meaning delivered immediate impact. In Q2 fiscal 2026, North American sales surged 9%, and wholesale grew by 8%.
The Empathy Deficit
Can an algorithm truly understand what to do when it comes to a truly emotional moment? Probably not (or not yet). AI is good in scale and speed, handling the massive datasets that would bury the rest of us. But I’m still convinced that in the moments that actually matter to a customer, automation is too lifeless to compete.
A Gartner survey found that 64% of consumers prefer that companies keep AI out of customer service altogether. The primary concern is not the accuracy of the bot, but the fear of being dumped during a crisis. People need people, not prompts.
In 2024, Klarna launched an assistant that did the work of 700 agents, initially expecting massive profit improvements. However, by 2025, the service quality dipped, and they started rehiring employees, admitting that prioritising cost over empathy led to lower quality.
Choice Without Fatigue
While shoppers are fine with using AI for rare research, they are far more cautious about autonomous purchasing. Only 24% of consumers feel comfortable letting an AI agent complete a transaction without their final oversight.
I see a very clear line here – we want technology to take the stress out of searching, but we have to be careful not to strip away the person’s own choice. It’s about clearing the clutter, but leaving the final decision on users. In the gifting sector, this is especially sensitive. Selecting a gift is an emotional act, and at Flowwow, we’re careful not to let the algorithm get in the way of that. AI should be regarded as a support system that structures choices and offers inspiration. Even giants like Walmart are leaning into this with assistants like ‘Sparky’ – they’re focusing on making you feel informed, not coerced.
Loyalty Lives in Emotion
Harvard Business Review research indicates that emotionally connected customers are 52% more valuable than those who are merely satisfied. They have a 306% higher lifetime value and are less sensitive to price changes. Still, lots of consumers switched their brand preferences in the past few years, meaning ‘satisfaction’ isn’t equal to ‘connection’. Real desire to stay with the brand comes from the emotional response and genuine engagement.
Some brands are even stepping back from the addictive algorithmic rivalry, experimenting with different formats to retain audiences. Lush famously walked away from major social media platforms to focus on sensory, in-store experiences and community-driven values. By 2025, their retention rates got higher compared to their high-spend digital years.
While not every retailer should abandon social media, the Lush example highlights that differentiation is built on culture and values. When every company has access to the same technology, your brand’s unique soul with ethics and community becomes your most defensible asset.
As AI personalisation loses its ‘wow’ factor and most companies work with the same tech stacks, operational efficiency becomes the baseline rather than a competitive win. The real winners won’t be the ones who automate the fastest, but the ones who use AI to clear the path while offering great experiences with human touch.
It’s about building long-term trust instead of just chasing the next click, about bringing emotional context rather than just selling. The most premium feature you can now offer is a genuine connection.
