As the global economy continues to face challenges of inflation and tariff wars, the retail market is having to cope with its own difficulties, such as the shuttering of department stores and consumers being more careful when spending.

This all lends itself to a softening market for fashion and apparel — even the most loyal customers are pulling back. With new customer acquisition becoming harder, any potential growth left will come from the consumers the brands already have.

However, most brands are unable to extract more from their established customer base — especially as the implementation of artificial intelligence for brands has created a generic experience, faster. What customers are looking for today is hyper-personalized and more experience-forward.

Jamie Domenici, chief marketing officer of Klaviyo, pointed out that while AI can be useful for brands and retailers, it’s only as good as the context behind it.

She also says the brands that will survive in the next five years will be the ones that close the gap in how deeply they understand the individual customer.

“You can have the most sophisticated AI model in the world, but if it doesn’t know what a customer bought, what they browsed, how they responded to a campaign or what they asked customer service yesterday, it’s still guessing,” Domenici told Fairchild Studio.

With a focus on depth of data with its built-in data platform rather than just AI tools, Klaviyo’s solution boasts an autonomous CRM created for business-to-consumer brands by combining marketing automation, analytics and customer service in one place.

“A real-time understanding of customers” is what Klaviyo has spent years building out — with a focus
on connecting customer signals across marketing, service, commerce and social.

With this context, she said brands can get an in-depth understanding of their customer, anticipate what would be useful and respond in a relevant way. And since the company’s AI tools respond on the same CRM foundation, each interaction enables the following one to be smarter.

The solution allows brands to identify higher-intent customers, make relevant recommendations, resolve purchase drop-off and build relationships post-purchase transaction. And while there is opportunity for brands to retain more customers, Klaviyo said the goal is more to create a valuable and ongoing relationship with consumers over time.

Notably, the customer journey has become more fragmented — consumers are discovering brands via social, then browsing their websites, asking questions, receiving texts, making a purchase, then contacting service later. Klaviyo merges those interactions for brands to better understand the journey as a bigger picture, rather than viewing each channel in isolation.

For Klaviyo, Domenici said automation is about executing a predefined role while personalization is using what they know about a customer to make the experience that much more relevant.

“The bigger shift we’re seeing now is from automation to autonomy,” she continued. “With automation, you’re ultimately still telling the system what to do: if this happens, send that. AI changes the equation because it can understand the customer and the business objective, identify an opportunity and help determine the best action to take.”

Its AI marketing agent, Composer, analyzes what’s happening across a brand’s marketing, surfaces the biggest opportunities, makes recommendations on what to do next and builds a campaign to address them. Its Customer Agent understands an individual consumer’s context and takes action, whether it’s recommending products, completing a return or applying loyalty points.

For Goop, a customer of Klaviyo, retention of its customers starts with understanding them — the brand is seeking out what they’re interested in, how they shop and what’s most relevant to them.

“One of the biggest mistakes a brand can make is trying to be everything to everyone,” said Gwyneth Paltrow, founder of Goop. “We’ve always been very clear about who the Goop woman is and what she comes to us for and that clarity has been a huge part of how we’ve built the business. Klaviyo helps us understand her even better and be more thoughtful about how we reach her, without losing the point of view that makes Goop, Goop.”

Erica Imbrecht, vice president of marketing at Goop, explained that as customer behavior continues to shift, insights into purchase, engagement and loyalty data help the company continue to adapt and ensure that every interaction with Goop is both useful and relevant.

Personalization for Goop, Imbrecht said, is all about understanding where the customer is along their journey and meeting them where they are. “Klaviyo allows us to turn those insights into more relevant experiences at scale, while continually learning from what resonates. The biggest opportunity with AI is helping us move from insight to action faster. Klaviyo helps us identify meaningful customer signals and quickly turn them into more relevant experiences. That means our team can spend less time searching for opportunities and more time testing, learning and acting on them,” concluded Imbrecht.