UK retailers are putting customers at the heart of their growth strategies, according to new research from American Express, with 87% funnelling investment into initiatives to power consumer loyalty and drive sales.
The annual study, which surveyed 500 senior executives from a range of UK retailers of all sizes, reveals notably upbeat ambitions amid an evolving external landscape; the percentage of respondents aiming to grow their business this year increased 10 percentage points year-on-year to 82% in 2025.
Respondents see ramping up loyalty as integral to driving that momentum, with nearly half (45%) of those surveyed planning to either launch or enhance an existing loyalty programme this year. This is in response to customer demand, with almost two-thirds (64%) of retailers believing customers now expect to be rewarded for shopping with them.
The study found that retailers are increasingly turning to Artificial Intelligence (AI) as a way of forging stronger customer connections in growing numbers. Of the businesses already using the technology, almost half (46%) highlight improving customer experience as their main focus. Leveraging Generative AI, such as conversational chatbots, topped the list for tech investment among those surveyed, while over two-fifths (43%) of those surveyed say they are using Gen AI to enhance online product search; and the same proportion are using it to help resolve customer queries or complaints. By contrast, last year’s study pointed to more cautious adoption, with just 14% applying the tech to improve the online customer experience.
Retailers are not just focused on digital engagement strategies; almost two-fifths (38%) of those surveyed say they are planning to open new stores in the coming year, with beauty, electricals, fashion, and grocery among the top sectors planning bricks and mortar investment. When asked about motivations for doing so, the vast majority (88%) believe experiential retail is key to driving footfall – this can encompass in-store events to augmented reality that allows shoppers to visualise products in their own environment, for example.
The study revealed that payments are moving higher on the strategic agenda, with almost three quarters (74%) of retailers surveyed agreeing customers now have increased expectations when it comes to the checkout experience. Three-fifths (60%) believe they would generate higher sales if they offered more payment options, with almost a third (32%) of retailers surveyed describing their current payment experience as ‘outdated’.
UK retail’s super-power has always been how the sector adapts to evolving customer demands. From investment in AI-powered personalisation, richer rewards programmes and a broader menu of payment options, merchants are prioritising ways to build lasting customer relationships. At American Express, we’re committed to supporting that ambition by connecting merchants to our loyal, high-spending Cardmembers, and providing insights and incentives that help drive greater sales.
– Dan Edelman, UK General Manager, Merchant Services, American Express
