Brand loyalty has evolved from a linear model to a fluid one influenced by the rise of large language models (LLMs) like ChatGPT and Gemini. Traditional loyalty strategies, such as tiered status programs and redeemable points, are losing effectiveness in a market marked by high churn rates and low conversion rates. Customers increasingly demand faster, more personalized experiences. Brands like Starbucks and Sephora leverage AI for tailored product recommendations, enhancing customer engagement and fostering loyalty by meeting these changing expectations for speed and relevance.
In an era of high churn, razor-thin 2% conversion rates, economic headwinds, and fierce competition, brands are challenged to maintain loyalty with new customer expectations.
ChatGPT and Gemini have started to bulldoze the old customer journey by becoming de facto research assistants, changing how customers engage through discovery and consideration stages.
Brands like Starbucks and Sephora are using AI to deliver one-to-one product recommendations at scale, boosting purchase frequency and encouraging adoption of new items.
72% of people say fast service earns their loyalty, and two-thirds will stick with brands that offer more relevant, personalised experiences.
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