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Despite widespread adoption of artificial intelligence (AI) in marketing, a new study indicates a growing disconnect between brands and consumers. According to SAP Emarsys’s research involving over 10,000 consumers and 1,250 marketers, 40% of consumers feel misunderstood by brands’ personalization efforts, a significant jump from 25% last year. This “personalization gap” highlights a critical issue: while 92% of marketers leverage AI for increased efficiency and customer engagement, consumers are increasingly skeptical about how their data is used.

Globally, consumer distrust in AI’s handling of personal data has surged to 63% from 44% in 2024. Stringent regulations, such as the EU’s AI Act, are pushing marketers towards more ethical practices, though concerns linger about potential impacts on innovation.

The report emphasizes the importance of demonstrating clear value to consumers. While shoppers appreciate AI that streamlines the shopping process, they prioritize transparency and data privacy. Success stories like those of Gibson and City Beach demonstrate the effectiveness of using AI to address specific customer pain points rather than simply automating tasks. Retailers must prioritize building trust by aligning their AI-driven marketing strategies with customer expectations to ensure the sustainable success of AI in the retail sector.