UK manufacturers see AI as key to customer loyalty

Research published by SAP Engagement Cloud shows that 86% of UK manufacturing decision-makers believe AI will be essential to winning and retaining customers over the next year. The findings are based on a survey of 750 UK decision-makers across several business functions.

More than four in five manufacturers said AI is already embedded in business workflows rather than used as a standalone tool. The same share said it is increasing human productivity without reducing human control, suggesting wider use in day-to-day operations rather than small-scale trials.

The research indicates that manufacturers are applying AI across both customer-facing activity and internal processes, including supply chains, inventory management and fulfilment. It also points to a growing focus on linking customer data with operational information so businesses can respond to changes in production, service and delivery in real time.

That approach is becoming more important as manufacturers try to improve customer engagement while keeping decisions grounded in what the organisation can actually deliver. The survey suggests connected data is increasingly viewed as a commercial advantage as AI use spreads across the business.

Security concerns

Cybersecurity and privacy remain the main obstacles to broader AI adoption for many manufacturers, with two in five respondents saying those issues are the biggest barrier to scaling it.

Even so, companies appear to be putting formal controls in place as adoption grows. More than four in five decision-makers said their organisations have established AI guardrails covering data lineage, personally identifiable information and human approval points.

This mix of concern and implementation reflects a shift in how manufacturers are approaching the technology. Rather than treating AI as an isolated experiment, many appear to be building governance structures around tools already used in core workflows.

Sara Richter, Chief Marketing Officer at SAP Engagement Cloud, said the practical value of AI in manufacturing depends on the quality and connectivity of data across the business.

"Manufacturers depend on thousands of micro-signals every day, from inventory updates to fulfilment and service interactions," Richter said. "When trusted data is connected across an organisation, customer engagement becomes an integral part of how the business operates, rather than something that sits alongside it. When AI understands context and what's happening across the entire business, insight turns into action, enabling every interaction to become more personal, relevant and grounded in what the business can actually deliver."

Data focus

The findings come as manufacturers face pressure to improve customer relationships while managing increasingly complex operations. In that environment, the ability to connect production schedules, stock availability, supplier activity and fulfilment data with customer records can shape how companies market, sell and provide service.

SAP pointed to DAW, a European manufacturer of paints for the construction industry and thermal insulation materials, as an example of a business working to bring together fragmented data sources. The goal, according to SAP, was to create a fuller picture of customers and support future AI-led products, services and decision-making.

"We wanted to tailor our offering to the needs of different professional target groups, and to design the digital customer experience for painters in such a way that they are supported in their everyday lives," said Alexander Kuhl, Head of Data at DAW. "In order to further develop our product and service offering in a targeted manner, we had to make better use of our data sets."

The research covered UK decision-makers in IT, technology, marketing, service and revenue roles, including respondents from manufacturing. While the survey highlights confidence in AI's role in customer acquisition and retention, it also shows that concerns over security and privacy persist as use expands.

"In manufacturing and beyond, the principle is the same. Organisations often think about AI first, but competitive advantage starts with connected data. When AI has access to trusted, real-time information across the enterprise, businesses can move beyond isolated marketing activity and towards meaningful, coordinated engagement across every customer touchpoint," Richter said.