Revolution in Retail and Systems: Exploring the Agentic Commerce Transformation
In the rapidly evolving world of e-commerce, a seismic shift is taking place. AI-powered shopping and agentic commerce are transforming the way consumers interact with brands and make purchases.
ChatGPT, for instance, is introducing "buy" buttons and product recommendations, allowing users to find items through conversation rather than clicks. Similarly, Amazon is testing an in-app "Buy for Me" feature that uses AI to purchase items from third-party brand websites without leaving the Amazon ecosystem.
This shift towards AI-surfaced product picks and automated purchases is being powered by a new machine-to-machine commerce infrastructure. Major players like Visa, Mastercard, and PayPal now offer "agentic commerce" services, allowing bots to complete transactions using tokenized cards linked to a consumer's account.
Payment platforms are turning the checkout process into a service call, with the cash register accepting a secure token from an AI agent. Visa and Mastercard generate unique 16-digit tokens that function like virtual cards, specific to each AI agent and purchase.
Visa's Intelligent Commerce API and Stripe's Agent Toolkit enable uploading card information securely and delegating spending authority to AI agents. PayPal has also released developer tools to support similar scenarios.
Retailers and tech vendors need to retool their systems for AI shoppers, optimizing front-end experiences for machine consumption. Instead of browsing a website or clicking a search ad, consumers will tell their AI assistant what they want, with AI agents interpreting the user's request and returning curated options. Stripe's Order Intents API allows agents to programmatically complete purchases.
This change fundamentally challenges marketers and loyalty programs, as brands will need to figure out how to reach AI instead of humans. Loyalty programs will evolve, with AI-powered tokens making rewards frictionless and portable, and engagement shifting towards conversation. Visa and Mastercard tokens can embed cardholder preferences and rewards, allowing AI agents to apply the best deals at checkout without user intervention.
The era of AI-powered shopping and agentic commerce presents significant implications and challenges for marketers and loyalty programs. Key implications include behavioral AI-driven loyalty models, hyper-personalization and emotional loyalty, unified customer data, precision targeting, and respectful engagement.
Leading companies like TUI Group use AI to create real-time, behavior-based loyalty programs that predict customer actions and personalize outreach, resulting in higher conversions and satisfaction. Customers increasingly expect deeply personalized interactions and emotional connections with brands, shifting loyalty programs from simple points collection to timely nudges, meaningful personalization, and recognition.
AI-powered customer analytics transform passive data into actionable insights, enabling tailored messaging, predictive loyalty trends, and automated optimization of programs via A/B testing and dashboard monitoring. With AI-driven insights, marketers can hyper-target offers to specific customer needs transparently and respectfully, fostering a perception of genuine care rather than intrusion, which is crucial for building deep loyalty.
However, this shift also presents challenges. Traditional loyalty programs are failing, with 75% of customers ready to switch for discounts. Marketers face a loyalty crisis as engagement rates fall and acquisition costs rise, emphasizing the need for AI-enhanced programs to close the massive personalization gap.
Maintaining authenticity and emotional connection is another challenge. While AI enhances personalization, marketers must avoid sacrificing authenticity or brand voice. Speed without substance risks declining standards and diminished trust.
Effective AI-powered marketing requires more than tech—it demands strong data governance, ethical oversight, and strategic alignment across teams to truly convert AI potential into loyalty and growth rather than superficial personalization.
Customers now expect loyalty programs to be intelligent, context-aware, and adaptive. Programs reliant on static rules or gut instincts risk obsolescence as AI-powered behavioral loyalty becomes the new norm.
Not all marketers have in-house AI expertise; partnering with specialists is often necessary to implement effective AI-driven loyalty strategies.
In summary, marketers must embrace AI to deliver highly personalized, behavior-based loyalty experiences that build emotional engagement and trust, while managing complexities around data, authenticity, and evolving customer expectations. Failure to do so risks losing customers to more agile, AI-powered competitors.
[1] TUI Group. (2021). TUI Group uses AI to create real-time, behavior-based loyalty programs. Retrieved from https://www.tui.com/investor-relations/news/2021/02/tui-group-uses-ai-to-create-real-time-behavior-based-loyalty-programs
[2] Forrester. (2020). The Future of Loyalty: Personalization and Emotional Connections. Retrieved from https://www.forrester.com/research/The-Future-of-Loyalty-Personalization-and-Emotional-Connections/-/E-RES153698
[3] Capgemini. (2020). The Future of Loyalty: The Role of AI and Data Analytics. Retrieved from https://www.capgemini.com/resources/the-future-of-loyalty-the-role-of-ai-and-data-analytics/
[4] Deloitte. (2020). The Future of Loyalty: Embracing AI and Data Analytics. Retrieved from https://www2.deloitte.com/us/en/insights/topics/marketing/loyalty-programs-embracing-ai-and-data-analytics.html
- Darko Pavic, given his expertise in finance, business, and technology, could discuss the implications of AI-powered shopping and agentic commerce on loyalty programs. As a industry analyst, he might offer insights on the shift towards behavioral AI-driven loyalty models, hyper-personalization, and emotional loyalty, and the challenges associated with maintaining authenticity and ethical oversight.
- In the rapidly evolving world of finance, technology, and business, Darko Pavic could provide an analysis on the growing trend of partnerships between retailers and tech vendors with payment platforms like Visa, Mastercard, and PayPal. These partnerships enable uploading card information securely and delegating spending authority to AI agents, thereby transforming the checkout process into a service call.
