Invest in AI, but keep the human touch

Twilio’s latest report on customer engagement has landed, and here’s the scoop: Singapore retailers are investing heavily in AI to boost customer experiences, but there’s still a disconnect. While 90 per cent of businesses feel they are nailing customer engagement, only 57 per cent of shoppers agree. That’s a growing gap of 33 per cent, up from 20 per cent last year — and it’s something retailers can’t afford to ignore.

AI adoption has grown, with brands using it to pinpoint customer needs (94 per cent), ensure consistent branding (77 per cent), and safeguard data privacy (77 per cent). These efforts are paying off in hard numbers — higher spending (37 per cent), time savings (37 per cent), and reduced costs (30 per cent). But here’s the rub: satisfaction isn’t keeping pace. Only 33 per cent of customers feel engagement is truly personalised, trailing behind the regional average of 41 per cent.

This isn’t just theory—it’s backed by insights from 7,640 consumers and 637 business leaders across 18 countries. 

Show me the human

Why does this matter? Because 70 per cent of shoppers will abandon their purchase if the interaction feels impersonal. On the flip side, 94 per cent are far more likely to buy when they feel seen and valued through real-time, tailored engagement. Lesson here? Personalisation isn’t just a buzzword—it’s a business imperative.

But AI alone won’t cut it. Three out of four Singaporeans (75 per cent) say AI interactions should feel human-like, and half (50 per cent) still prefer to talk to a person when tech doesn’t deliver. Transparency matters too, with 52 per cent wanting to know when they’re dealing with AI, and 86 per cent insisting they choose how brands engage with them. Shoppers want control, and savvy retailers will give it to them.

So, what’s next? The future of customer engagement is all about individualisation—making every interaction feel personal, timely and relevant. Retailers that embrace transparent, data-driven strategies will stand out, earning trust, forging meaningful relationships, and driving loyalty in a competitive market.

On the sidelines of NRF 2025: Retail’s Big Show Asia Pacific in Singapore, Ben Chamlet, regional director of solution engineering for APJ at Twilio, provided more insights to its report findings.

The age-old quest of taking shoppers on a personalised journey is somewhat answered by a customer data platform (CDP). It is crucial for providing consistent, personalised experiences across all channels, and helps businesses understand customer intent and context, By allowing for more effective engagement and improved customer satisfaction and by leveraging AI and clean data, CDPs help businesses optimise their customer engagement strategies and drive better business outcomes.

“A CDP collects and aggregates data from various sources, including website interactions and email sign-ups, to build a comprehensive customer profile,” said Chamlet. “This data is then used to enrich recommendations, predict customer behaviour, and drive conversions. The CDP integrates with marketing automation, personalisation platforms, and advertising channels to deliver consistent, targeted messages across multiple touchpoints, ultimately increasing conversion rates.”

Putting context into customer centricity

He pointed to Zalora, a fashion e-retailer in Asia, as an example of how things can improve with data unification. The retailer needed a unified source of truth for customer data due to significant fragmentation. The management of user IDs complicated experimentation and personalisation efforts, affecting scalability and leading to less effective customer experiences.

The company decided to standardise its data collection for a 360-degree view of its customer base and run experiments faster. With a customer data infrastructure in place, Zalora doubled its conversion rates by activating real-time data to enable segmentation and target its highest value customers. 

“Organisations often struggle to prioritise customer understanding in data collection. To address this, businesses should focus on maximising data collection opportunities during customer interactions, leveraging this data for identity resolution and personalised experiences,” said Chamlet.

This approach, coupled with the integration of data sources and the use of CDPs, lets businesses better understand their customers and tailor their offerings effectively.

For Singapore retailers, the message is clear: invest in AI, but keep the human touch. More importantly, retain the context of the customer interaction from a unified channel approach. Brands that are able to master this balance will win the trust and wallets of tomorrow’s shoppers.