AI-Powered Marketing Solutions Gain Traction Amid Retail Personalization Push

Jake Goodman (MBA ‘26) shares his thoughts on how AI is changing marketing for retailers.

The medium is the message, and artificial intelligence (AI) content is the new medium for retailers. Artificial intelligence is rapidly transforming the retail and e-commerce marketing landscape, and AI marketing tools have been a particularly active focus for the sector. As brands and retailers scramble to meet rising customer acquisition costs on increasingly tighter budgets, AI-enabled marketing platforms are emerging as one of the most attractive market opportunities in the broader artificial intelligence ecosystem.

Consumer demand for personalization within the shopping experience is a key driver. A striking 71% of consumers expect companies to deliver personalized interactions, and 76% report feeling frustrated when personalization is lacking, according to recent surveys. This pressure is translating into clear performance gains from AI-powered tools for marketers, with hyper-personalized campaigns created with AI increasing click-through rates by as much as 40%. As companies race to reinvent how consumers approach their marketing assets, AI tools are becoming essential to deliver personalization at scale.

At the same time, marketers are under pressure to achieve more with less. Chief marketing officers are being tasked with delivering ambitious growth targets while operating with leaner teams. In this environment, AI is proving its worth. A report by Bain suggests that AI-powered marketing tooling is outperforming AI-powered tooling for other functions, such as sales and customer support, on behalf of retailers. Early adopters of AI-powered marketing tools are reporting up to 50%  faster campaign deployment, and as large language models (LLM) become more efficient, that number is expected to rise. Notably, marketing and advertising content generation leads all retail AI use cases in return on investment (ROI), with an average return of 23%.

Despite these promising results, there remains a significant runway for AI adoption in marketing. According to Salesforce, only 51% of over 1,000 marketers surveyed are currently using or experimenting with AI. However, interest at the executive level is surging, with mentions of AI-driven personalization on earnings calls rising sixfold since 2022, according to CB Insights data. This signals growing enterprise-level urgency to implement AI tools that can personalize experiences and optimize performance.

The rapid evolution of AI, particularly in areas like LLM-driven search, is also generating fear and uncertainty, prompting marketers to seek new solutions that can future-proof their strategies. Companies like Profound, for instance, are capitalizing on this moment of disruption by helping brands adapt to the declining relevance of traditional search engine optimization (SEO) and increasing relevance of answer engine optimization (AEO). AEO startups may not slot neatly into conventional cost-saving or revenue-generating categories, but they are well-positioned to thrive by easing marketers’ anxiety about AI’s reshaping of the digital marketing playbook that has been solidified over the course of the past 15 years.

Furthermore, with higher adoption by retailers of content generation tools, a new marketing ecosystem is emerging, where the declining costs to produce content may flood users with AI-generated content. Yet consumers have been quick to catch on. According to Mintel, 61% of consumers have noticed that an ad is AI-generated. As AI technological advancements eventually veil whether content is generated by AI or not, authenticity may become a more powerful tool to reach consumers than quantity of content. Still, I am hopeful that there will be some type of middle of the road outcome that straddles the line between a veritable avalanche of AI-driven ad slop and the perhaps trite reassertion of human-centered design through bold-text, single-color-palette-branding assets. 

Maybe one of the biggest questions is how brands will use the dollars that these AI-powered marketing tools will free up to invest in other corporate activities. The best outcome to me is a world in which the barriers to entry for smaller retailers and consumer packaged goods (CPG) brands are lowered by AI-powered marketing tools. Meanwhile, for incumbent retailers and brands, the dollar savings can be used to reinvest in innovation and provide higher quality products at lower prices. 

As AI continues to penetrate the retail sector, marketing solutions will continue to stand out as a high-impact, high-return category facing a problematic balance between quality and quantity of marketing content.

Jake Goodman (MBA ’26) is originally from Davie, Florida. He graduated from Brown University with an honors degree in English and Economics in 2019. Prior to HBS, Jake worked in corporate development, strategic finance, and retail strategy and operations at Gopuff, a rapid convenience app, in Miami, and for Barclays in New York City. He is an avid banjo and guitar player and misses the Florida sun dearly.