UK retailers struggle to deliver on digital personalisation promise

Many UK retailers are underdelivering on promises of personalised shopping by relying largely on basic tactics, research of 700 senior industry executives reveals.

Despite considerable investment in digital technology and artificial intelligence, most retailers acknowledge only limited progress in providing seamless, personalised experiences for consumers. This failure affects both shopper satisfaction and retail revenues.

Stalled strategies

Sixty-five percent of surveyed retailers described their personalisation strategies as being in either pilot or basic stages. Only 14 percent said they have achieved advanced cross-channel personalisation. Email campaigns and loyalty programmes remain the most common approaches, cited by 36 percent and 35 percent of respondents respectively. Yet only 27 percent measure repeat purchases and a mere 21 percent track customer churn, indicating that key customer insights are still largely untapped.

Glynn Davis, a retail analyst, noted, "Retailers have pumped millions into personalising customer experiences through technology, but this research suggests progress remains questionable. At the heart of any personalisation is data and insights that provide people with experiences which feel personal - yet, many continue to struggle with poor datasets and a lack of in-house expertise."

Omnichannel challenges

Even among retailers with sophisticated digital operations, delivering genuinely unified shopping remains elusive. Forty-six percent claim to offer a fully unified customer experience across channels, while 35 percent admit to existing integration gaps, and 19 percent operate largely siloed or independent systems. Respondents identified customer identity consistency (17 percent), data integration (16 percent), and inventory visibility (12 percent) as ongoing challenges.

As these operational issues persist, many consumers experience frustrations such as missed discounts, incomplete shopping baskets, and inconsistent service between in-store and online interactions. Surveys suggest that these breakdowns not only reduce trust but also drive customers to competitors with stronger channel integration.

AI ambitions

Artificial intelligence is already in use or on trial at 97 percent of the retailers surveyed. The technology is most commonly implemented for chatbots and virtual assistants (51 percent), product recommendations (48 percent), and marketing campaign optimisation (47 percent). Enhancement of customer experience (45 percent) and improvements in operational efficiency (50 percent) top the list of AI adoption drivers, with cost optimisation (31 percent) also significant.

Still, nearly half of those using AI find it difficult to move beyond pilot phases to consistent implementation. The main barriers cited include lack of in-house expertise (36 percent), data quality issues (33 percent), high setup costs (33 percent), and competing organisational priorities (32 percent).

"AI has been touted as the saviour, but without solid foundations, retailers risk pouring even more money into projects without understanding how they'll deliver value. The real worry here is that AI might be used as a cost-cutting tool rather than a way to genuinely improve shopping experiences," said Davis.

Industry crossroads

Only a minority of retailers claim to provide intelligent, real-time, cross-channel personalisation, highlighting the complexity of data management and consumer engagement even after considerable investment. Brands are now starting to recognise the reality versus the promise of advanced digital strategies.

"The retail industry is at a crossroads," said Matt Hildon, European Retail Director, Valtech. "After decades of digital investment, most brands still struggle to connect data with human behaviour. Shoppers are tired of being treated like transactions. True innovation won't come from more automation, it'll come from rebuilding trust and making personalisation genuinely personal."