AI-Generated Personalization as a Retail Growth Lever for 2023
Published December 12, 2022 by Coresight Research in partnership with Persado, this report looks at retail going into 2023 — a year defined by decades-high inflation, rising acquisition costs, the ongoing collapse of third-party cookies, and the saturation of digital noise across consumer inboxes. The argument: retailers that treat AI-generated, first-party-data-powered personalization as core infrastructure can break through the noise and defend both top- and bottom-line growth, while those that stick with traditional playbooks risk leaving revenue on the table.
Authored by Deborah Weinswig, CEO and Founder of Coresight Research, with Primel Konok and Steven Winnick. Draws on Coresight surveys from October 2021, November 2021, and November 2022, plus third-party data from CommerceNext, Acquia, and Statista/Dash Network.
Where Retail Marketing Breaks — and Where AI Can Fix It
The report frames the retail challenge around four pressures: higher acquisition costs, tighter privacy rules, saturated digital channels, and squeezed consumer wallets. Against that backdrop, the data makes a clear case for AI-generated personalization.
- Acquisition costs are the #1 obstacle: 61% of retailers — and 66% of digital-first retailers — cite rising customer acquisition costs as their top obstacle to e-commerce goals, according to CommerceNext's 2022 study.
- The personalization market is scaling fast: Global CX personalization and optimization software revenue is estimated at $8.3 billion in 2022, growing to $10.7 billion by 2025 — an 8.8% CAGR.
- Personalization expectations outpace execution: 71% of US brands and retailers think they excel at marketing personalization, but only 34% of US consumers say retailers are actually succeeding at it — a 37-point perception gap.
- First-party data is the strategic pivot: 78.2% of executives consider first-party data "very" or "extremely" important for AI in digital marketing, and driving online sales (56%) plus delivering the right message at the right time (51%) are the top benefits.
- The Michaels example: The arts-and-crafts retailer used Persado to build a brand-specific language model, and now personalizes more than 95% of its email campaigns — driving a 41% CTR lift on SMS and a 25% CTR lift on email.
Three Levers for Retail Marketers Heading into 2023
Coresight's recommendation boils down to three moves. First, leverage generative AI to produce and optimise language at scale, rather than relying on hand-authored copy that cannot keep pace with channel and segment variation. Second, ground every personalisation decision in current, accurate first-party data — not generalised assumptions about broad consumer segments. Third, track personalisation performance rigorously across channels, so every message is accountable for the KPIs it moves.
For retail CMOs, the strategic stakes are concrete. US personal savings dropped to 2.3% in October 2022, the lowest rate since 2005, and 49.4% of consumers who noticed recent price increases said they plan to buy fewer items. In a market that unforgiving, the cost of shipping a lower-performing message is measurable — and so is the upside from getting it right. Retailers that combine AI-generated language with enriched first-party data stand to defend engagement, hold margins, and grow through the downturn rather than cut their way through it.
Download the full Coresight custom report for the complete analysis, charts, and the Michaels case study in detail.
