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E-commerce and marketing businesses spending big on AI with little gain, says research
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UK-based e-commerce companies are investing significant capital in AI to improve the customer experience, however, many businesses are yet to realise significant gains.

That’s according to a survey of senior executives at 300 large and mid-sized e-commerce companies in Europe and the US by CMS Storyblok.

UK businesses have spent an average of £321,000 in the past year on developing or implementing AI solutions to enhance their digital customer experience, with 21% spending more than £500,000. Yet almost half (44%) state that their AI investment has only made a slight improvement to their customers’ digital experience.

Surprisingly, nearly all of UK business leaders (93%) say that their AI investment has delivered a good Return on Investment (ROI), of which 28% perceive it as a very good ROI. This potentially indicates businesses are taking a longer-term view of AI investment to improve their digital offering.

The research also explores the most popular use cases for AI amongst UK business leaders, which were cited as website content creation (59%), customer service (53%), marketing analysis (51%), translation services (49%), and marketing content creation (48%).

Dominik Angerer, CEO and Co-Founder of Storyblok said: “The transformative potential of AI for the digital experience is enormous, but our research highlights a clear gap between expectation and reality. While UK businesses are seeing some improvements, these remain incremental rather than truly transformative. What’s particularly interesting is that despite this, most business leaders still consider the capital they have committed to AI a good investment. This could suggest that many UK companies do not expect big gains immediately, but are instead taking a longer-term view of AI to transform their digital offering.

“To unlock AI’s full potential, businesses must go beyond surface-level implementations and integrate AI in a way that drives meaningful transformation. Core to this is the flexibility to scale with ease, and that’s where composable architecture comes in, enabling companies to seamlessly integrate AI-driven solutions across multiple channels without the restrictions of legacy systems. From hyper-personalisation to seamless localisation, nearly every possible AI use case could be implemented more effectively, and to a higher standard if businesses raised the digital bar and embraced modern marketing technology.”

GenAI demand to hit $644bn this year
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Global generative AI (GenAI) spending is expected to total $644 billion in 2025, an increase of 76.4% from 2024, according to a forecast by Gartner.“Expectations for GenAI’s capabilities are declining due to high failure rates in initial proof-of-concept (POC) work and dissatisfaction with current GenAI results,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “Despite this, foundational model providers are investing billions annually to enhance GenAI models’ size, performance, and reliability. This paradox will persist through 2025 and 2026.

“Ambitious internal projects from 2024 will face scrutiny in 2025, as CIOs opt for commercial off-the-shelf solutions for more predictable implementation and business value. Despite model improvements, CIOs will reduce POC and self-development efforts, focusing instead on GenAI features from existing software providers.” said Lovelock.

GenAI spending is poised for significant growth across all core markets and submarkets in 2025 (see Table 1). GenAI will have a transformative impact across all aspects of IT spending markets, suggesting a future where AI technologies become increasingly integral to business operations and consumer products.

Table 1. Worldwide GenAI Spending Forecast (Millions of U.S. Dollars) 

 

 

  

 2024 Spending

  

 2024 Growth  (%)

  

 2025 Spending

  

 2025 Growth  (%)
Services  10,569 177.0 27,760 162.6
Software 19,164 255.1 37,157 93.9
Devices 199,595 845.5 398,323 99.5
Servers 135,636 154.7 180,620 33.1
Overall GenAI 364,964 336.7 643,860 76.4

Source: Gartner (March 2025)

GenAI spending in 2025 will be driven largely by the integration of AI capabilities into hardware, such as servers, smartphones and PCs, with 80% of GenAI spending going towards hardware.“The market’s growth trajectory is heavily influenced by the increasing prevalence of AI-enabled devices, which are expected to comprise almost the entire consumer device market by 2028,” said Lovelock. “However, consumers are not chasing these features. As the manufacturers embed AI as a standard feature in consumer devices, consumers will be forced to purchase them.”

Photo by ilgmyzin on Unsplash

‘Majority of major brands’ expect increased investment into customer loyalty
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A survey has found the majority (67%) of businesses expect investment in digital loyalty to increase or significantly increase over the next 12 months.
Apadmi’s second annual Digital Customer Loyalty report, also revealed that 81% of respondents consider loyalty to have always been important or is now more important than ever, with the number one business challenge being solved by digital loyalty programmes being frequency of purchase.
More than a third (36%) of businesses said they are currently developing a digital loyalty programme, while 35% stated they already have a live digital loyalty programme in place. 13% said they plan to create one in the future, while less than 1% admitted they no longer use a loyalty programme. This highlights the importance brands are placing on their digital loyalty strategy.
Almost a quarter (24%) of respondents believe apps are the most responsive CRM channel they use, with mobile apps becoming the preferred channel of choice for customer loyalty initiatives.
When considering the key functions mobile apps play in loyalty programmes, brands ranked the delivery of a more personalised experience (40%) and a cost-effective way to reach customers (40%) top.
Thinking about the tactics used, 81% of respondents said personalisation is a key part of their mobile customer engagement strategy. However, a quarter admitted they only have basic personalisation implemented, or have yet to implement it at all.
Mobile continues to make personalisation a more seamless and effective tool for brands looking to keep customers engaged, whilst also delivering value to customers who expect relevant, convenient content, services and products to be served up in the palm of their hand.
Clearly, appetite for personalisation remains high, with brands suggesting that there’s still room for more. In fact, compared to 2024, there’s been a 10% rise in businesses planning to increase personalisation efforts.
When it comes to the future of loyalty tactics, businesses are already considering where they may want to invest further in loyalty in the future. Topping the list was exclusive offers (49%), up from 40% in the 2024 report.  Future tactics perceived to be less popular included paid membership ( 19%) and scan-and-go (15%), both of which declined by nearly 10% year-on-year.
Compared to last year’s results, it appears that more brands want to start focusing on exclusive offers, loyalty points, instant wins and exclusive pricing; trends already being witnessed with Apadmi’s clients.
While the appetite for digital loyalty programmes is clear, the biggest barriers for respondents were budget restrictions, lack of clear strategy, other areas being given greater priority, and a lack of internal expertise.
Instead of letting these challenges hold back growth, brands should find ways to show value quickly. For example, creating proof of concepts, using fast follow features, conducting user research, and testing features with small groups of customers.
Jake Sargent, Group Marketing Director at Apadmi, said: “Businesses across all sectors are feeling increasing pressure to acquire, engage and retain customers in increasingly competitive markets. Rising living costs for customers and business costs for brands means retaining and engaging loyal customers is essential to safeguarding retention and revenue, with the need to create more efficient and effective loyalty programmes and experiences greater than ever. Our research has highlighted how digital is shaping the world of loyalty, providing a view on the impact these experiences, particularly mobile, are having on loyalty.  An increased focus on personalisation, product and programmes to drive customer and business value is what we’re likely to see more of in 2025.”
Emma Collins, Head of Loyalty and Engagement at Poundland, said: “We had to work really hard to lay the groundwork for our new programme, Poundland Perks. That meant getting buy-in from all internal departments, including our fantastic stores – championing the results of our invaluable testing and learning. Loyalty is about finding a way to create insight, increase personalisation, drive footfall and invite conversations. And the best channel to do all of that at scale is digital, which is why we went mobile-first.”

Brand trust issues among Gen Z impacting conversion rates
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A poll of over 1,500 consumers by Wunderkind in its latest Consumer Insights Report revealed that lack of trust in a brand was the top reason one in three (28%) Gen Z shoppers would abandon a purchase when shopping direct with a retailer online, indexing +9 percentage points higher than the average UK customer.  Trust issues were also a core driver for cart abandonment for over a quarter (26%) of the Millennial shoppers polled.

The role of reputation and trust continues to be a growing consideration within purchasing decisions, with Forter’s Consumer Trust Premium report suggesting UK consumers would spend +44% more, on average, with retailers they trust, while a further 73% said they were more loyal to brands they perceive to be authentic.

And this growing need for authentic brand experiences is also evolving channel choices and preferred customer engagement among younger Gen Z shoppers specifically, with a quarter (25%) saying they would choose to shop on a retailer’s DTC (Direct-To-Consumer) website as their top ‘trusted channel’.  Gen Z is also now almost twice as likely than other shopper demographics to value brand name recognition (16% vs 9%), emphasising the role of reputation and trust in their purchasing decisions.

Meanwhile, when it came to content engagement, authentic brand storytelling indexed +5 percentage higher for Gen Z consumers (15%) compared to the average UK shopper (10%) when it came to encouraging them to visit a brand’s website frequently, with the role of reviews and User Generated Content (UGC) also ranking +9 percentage higher for Gen Zers (48% vs 39%), showcasing the role of social proof in building credibility in buying journeys.

“As Gen Z’s global spending power skyrockets, set to grow to $12trillion by 2030, this represents a significant opportunity for retailers to acquire, engage and retain younger cohorts of consumers who seek more meaningful and authentic interactions with the brands they buy from,” Wulfric Light-Wilkinson, General Manager International of Wunderkind, commented.  “Compelling content plays a pivotal role in driving repeat visits to brand websites and apps.  By helping consumers connect with products, trust brands and find value in their interactions, the right content fosters engagement and loyalty, allowing brands to deepen connections and maximise reach.”

RESEARCH: Only 30% of IT leaders at global brands involve marketing in UX decisions
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A survey of 200 IT leaders from global brands regarding how they plan website development projects shows that while 21% wouldn’t change anything about their planning process, 79% realise it could be better.

The data from Storyblok indicates that on the surface, website development planning seems to be working well for most companies because projects are planned months in advance. 29% plan projects 1-2 months in advance, 26% between 2-3 months ahead of time, and 18% are planning more than 3 months before development. The largest percentage typically develop a proof of concept in 1-2 weeks (31%), with 18% delivering one in less than a week.

Despite that, the fact that an overwhelming majority of IT leaders say they know their planning process could be better points to issues with how the time is spent and who’s involved in the collaboration. While 66% say they work closely with the marketing team on structural page and content changes for websites, only 30% involve them in making UX decisions. 34% acknowledge they need to do a better job of collaborating with the marketing team when planning projects.

To help developers and marketers plan digital projects together, Storyblok is introducing the Concept Room as part of Storyblok Labs, a place for users to test its latest features. The Concept Room is a digital whiteboard where you can visually map out your project structure. The concepts can be linked to components within Storyblok, which makes getting a project started fast and easy.

Dominik Angerer, CEO and Co-Founder of Storyblok, said: “Collaboration between developers and marketers continues to be a struggle for most companies. As this data shows, IT teams like to think they’re working well with their marketing colleagues, but their actions prove otherwise. We built the Concept Room to make planning digital projects in Storyblok as collaborative and joyful as building them.”

Research highlights how gamers are using YouTube in 2025
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Video game marketing agency Big Games Machine has released its latest industry report, ‘How Gamers Use YouTube in 2025,‘ providing insights into the habits and motivations of 1,000 US-based gamers on the platform.

The survey reveals that guides and tutorials reign supreme as the most popular form of gaming content on YouTube, with viewers showing a clear preference for mid-sized channels. These insights provide valuable guidance for developers and marketers seeking to engage gamers through video content. 

Key findings: 

  • Content type: Guides and tutorials are the most popular (47%), followed by reviews and funny moments (40%). ‘Core viewers’ (those watching more than 2 hours per week) are twice as likely to engage with long-form content, like video essays. These responses highlight the importance of diversifying content to cater to varying levels of engagement
  • Channel subscriber size: Mid-sized channels with 100k-1 million subscribers (39%) are the most popular, followed by micro-influencers (10k-100k) at 26%. Casual viewers are more likely to favour micro-influencers
  • Genre and channel size: While medium-sized channels lead across all genres, larger channels (over 1 million subscribers) are more prevalent among those who favour action games compared to other genres 
  • Shifting streaming landscape: Gamers embrace a multi-platform approach to live stream viewing. While YouTube remains the clear leader amongst the respondents (79%), the significant audiences engaging with live content on both Twitch (43%) and TikTok (40%) underscore the need for a diversified live streaming strategy
  • Indies and esports fail to attract: YouTube content from indie developers (5%) and esports organisations (10%) ranked the lowest in terms of viewer preferences, indicating that these organisations are failing to develop content that appeals to viewers

James Kaye, co-founder of Big Games Machine, said: “Following on from our game discoverability report last year, lots of people wanted to better understand how gamers use YouTube. What our survey makes clear is that gamers have very varied tastes and preferences depending on demographics and game genre, and the good news is that Creators don’t need millions of subscribers to succeed on the platform. It also shows that indie developers and marketers investing in YouTube can spread their time and budgets across a broader range of channels rather than betting the farm on one of two huge influencers.” 

The full report is available for download here.

Photo by Sara Kurfeß on Unsplash

The global e-commerce market set to pass $11 trillion milestone
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The global ecommerce market is on a trajectory of rapid expansion, set to reach $11 trillion in 2028, driven by technological advancements, seamless delivery services, and rising internet penetration.

With China and the US dominating the landscape, companies must continuously innovate to meet evolving consumer expectations, embrace ESG compliance, and leverage data-driven strategies to maintain competitiveness in an increasingly dynamic sector, says GlobalData.

Its latest Strategic Intelligence report, “Ecommerce,” reveals that the global value of transactions for the ecommerce market  is set to grow at a compound annual growth rate (CAGR) of 11.1% between 2023 and 2028, driven by improved technology and delivery services and wider internet adoption.

Aisha U-K Umaru, Strategic Intelligence Analyst at GlobalData, said: “The global ecommerce industry is dominated by China and the US, with market shares in 2023 of 33% and 30%, respectively. These countries are home to some of the world’s biggest tech companies, including Alibaba and Amazon, which benefit from the huge troves of data generated by user activity on their platforms.”

Subscription-based services are a growing ecommerce segment. Beauty brands like Estrid and Harry’s started with subscription services and have enjoyed great success. Both are now available in physical stores, further boosting sales. Harry’s filed for an IPO in March 2024 after reaching nearly $1 billion in revenue. However, some subscription services have struggled after a rapid rise. Once valued at almost $2 billion, meal-kit subscription service Blue Apron was bought for about $100 million by food delivery company Wonder in 2023.

Umaru continued: “Consumers are also concerned with the social and governance factors of ESG. As a result, it remains high on the agenda for ecommerce companies, both to comply with relevant regulations and to meet consumer demands. ESG regulations such as the EU taxonomy for sustainable activities are also a method of clamping down on greenwashing, the practice of inflating a company’s ESG performance for marketing purposes.”

Other terms such as carbon neutral, green, and environmentally friendly are being regulated, and ecommerce companies must ensure they comply with relevant guidelines to mitigate the risk of litigation.

Umaru conlcuded: “Initiatives like the Fifteen Percent Pledge, which urges US retailers to allocate at least 15% of their shelf space to Black-owned businesses, highlight the increasing emphasis on social equity within the ecommerce sector. Additionally, issues such as supply chain transparency and diversity remain critical, as brands strive to align with the evolving ESG priorities of Gen Z and Millennial consumers.”

EMEA region ‘sees marketing engagement thrive’ – research
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EMEA’s focus on transparency and consent has fostered trust-focused audience building, leading to an 8% growth in marketing list subscribers – and this foundation perfectly positions marketers in the region to set the global standard for cross-channel tactics such as personalised email follow-ups and targeted automation.

That’s according to the 2025 Global Benchmark Report from Dotdigital, which also reveals that marketers in EMEA get some of the highest email engagement metrics globally. The region has a world-leading email open rate of 47%, and click-through rates (CTR) of 3.5%, far exceeding global averages and APAC’s 2%.

Other key insights from EMEA included:

  • Responsible marketing pays off: With GDPR driving transparency around consent and preferences, email lists in the region grew by 8%, proving the value of trust-focused audience-building. This growth places EMEA marketers in an excellent position to embrace cross-channel tactics like personalised email follow-ups and targeted automation.
  • Automation unlocks higher engagement: The report reveals abandoned cart campaigns in EMEA achieved a click-to-open rate (CTOR) of 16%, the highest across all global regions. This demonstrates the growing appetite for more tailored, data-driven customer journeys.

Dotdigital’s Chief Marketing Officer Juliette Aiken said: “It’s clear that marketers across EMEA excel at email, getting open and click through rates that are well above the global average. This trust-driven success has translated into 8% list growth, highlighting the value of GDPR-compliant marketing practices.

“What’s especially exciting is the role of automation, especially in abandoned cart campaigns, in EMEA delivering another global-leading click-to-open rate. By combining automation, segmentation, and retargeting, marketers in the region are sustaining engagement, reducing churn, and setting the global standard for modern marketing strategies”

The report draws from tens of billions of emails, hundreds of millions of SMS campaigns, and automation workflows sent across 40+ industries. It covers multiple global regions, including Europe, the Middle East and Africa (EMEA), the Americas, and the Asia-Pacific (APAC).

To download the full report visit https://dotdigital.com/global-benchmark-report/ 

Photo by Stephen Phillips – Hostreviews.co.uk on Unsplash

AI assistants set to pull people away from using branded apps as on-device consolidation looms
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By 2027 mobile app usage will decrease by 25% due to AI assistants – instead, smartphone users will turn to AI assistants, such as Apple Intelligence, ChatGPT, Google Gemini, Meta AI, and others to replace apps for many functions.

That’s according to analysts at Gartner, who say in addition to the impact of AI assistants, apps will be consolidated across separate brands and companies, creating mobile app partnerships or consortiums to reach more users per app at scale and defray the cost of creation and maintenance.

“CMOs should begin scenario planning for the impacts of decreased mobile app usage,” saidEmily Weiss, Senior Principal for the Gartner Marketing Practice. “Brands with low app engagement and retention will likely be first impacted – this will be a positive development for brands that are not overly reliant on driving revenue via apps as app development costs will decrease. Other brands may be severely impacted by the disintermediation of users turning to AI assistants for services. The loss of app users will also result in the loss of first-party data collection and the ability to reach fewer users via mobile push notifications.”

By 2026, Over 1/3 of Web Content will be Created for the Purposes of Gen-AI Powered Search

According to Gartner’s 2024 CMO Spend Survey of 395 respondents between February and March 2024, the average CMO allocated almost a quarter of their digital marketing budget to search. Other than end users directly visiting a website, search currently drives more traffic to the average commercial enterprise website than any other referral source. Given this, a loss of search driven traffic due to algorithmic shifts by major search engines would result in tangible, negative commercial impact to any organization.

“CMOs will need to direct their teams to hire talent with a strong understanding of how GenAI, and broader AI influences, impacts the performance of their content in search algorithms,” said Weiss. “It will be important to upskill the function by investing in search and content talent with AI skillsets. These associates will need to have familiarity with creating or optimizing content to train and rank within evolving search algorithms.”

By 2028 Digital Marketers will Move 30% of their Paid Social Budget to Support Advertising and Partnerships on Subscription-based Channels

It is becoming more challenging for CMOs to maintain, let alone grow, their reach and engagement among consumers. This is especially true as consumers shift their tech and media behaviors away from social media, to other platforms and subscription based channels. Gartner’s 2024 CMO Spend survey found that since 2022, paid social has maintained the highest budget allocation for all digital media spend. In 2024, B2C Marketing leaders reported allocating 14.3% for their digital channel budget to social media advertising (an increase from 12.3% in 2023).

“Closed group communities and subscription channels offer a potential alternative for social media weary consumers and content creators who want to do more than feed the algorithm,” said Weiss. “Brands can leverage closed-group subscription channels – such as Substack, Patreon, and Discord – and the professional creators on them to reach relevant target audiences who are already engaging with content they self-selected into consuming.”

By 2027, 85% of Customer Data will be Collected from Automated Interactions or Those Led by AI Agents

Current AI models, such as large language models (LLMs), lack the agency to autonomously execute tasks and adapt in complex environments. However, as new levels of intelligence are added, new AI agents are poised to quickly become more capable and reliable as brands seek to address customer facing use cases.

“There will be more AI agents than people, so while current approaches require humans in the loop, this idea will quickly become antiquated. Marketers will need to determine when and how they can trust AI agents to act on behalf of the brand and customers across key areas,” said Weiss.

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Marketers ‘must focus’ on transcending disruption in 2025
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With increased pressure to deliver growth and support cross-functional work, Gartner has identified three priorities for CMOs to deliver marketing excellence in 2025, namely Transcending Disruption, Elevating Enterprise Impact and Maximising Marketing Yield.

“Marketing faces extraordinary expectations heading into 2025, and CMOs cannot risk incremental change when the enterprise expects transformative results,” said Ewan McIntyre, VP Analyst and the Chief of Research for the Gartner Marketing Practice. “A sharp focus on marketing excellence is key. By applying the resources CMOs have with ever greater vision and discipline, they will earn the confidence of the business to expand their leadership and stewardship of resources.”

In a survey of 395 CMOs conducted in February and March 2024, respondents said they devote almost 40% of their budget to activities focused on change and transformation. The problem is that constant disruption diverts attention from long-term goals. CMOs must identify where tactical thinking has replaced strategic discipline and dedicate resources to ongoing strategy management, such as staff time, training and tools.

“A strategy management capability is a self-funding investment. While managing strategy is a core part of the CMO role, it cannot happen without a supporting organizational capability,” said McIntyre.

Gartner asserts that many CMOs are not fulfilling their growth potential – both in terms of delivering business results and maximizing their leadership effectiveness. In a survey of 125 CEOs and CFOs conducted in August and September 2024, executive leaders reported that only 14% of CMOs are effective at market shaping, or influencing market dynamics by identifying and fulfilling unmet customer needs. Companies where CMOs are effective at market shaping are 2.6 times more likely to exceed revenue and profit goals.

Market shaping CMOs distinguish themselves from C-suite colleagues with their exceptional skill-level in data-based decision making, strategy management and market knowledge. These skills help CMOs make meaning from data and convert trends into visionary strategies.

“This is a different skill set than merely understanding or empathizing with the customer,” said Sharon Cantor Ceurvorst, Vice President, Research in the Gartner Marketing Practice. “With customer data increasingly available to all functions, the CMO edge lies in knowing how to synthesize insight from an array of different sources to find opportunities for differentiation.”

With customer understanding being a significant driver of marketing-led growth, CMOs should be concerned that many customers feel misunderstood by brands. In a survey of over 6,000 U.S. consumers conducted in July and August 2024, 58% reported that the companies trying to sell them something don’t have a good understanding of their needs and preferences. The consequence is that many marketing campaigns underperform, wasting budgets, resources and opportunity.

“What’s perplexing about this is that marketing has never had more access to data, or more technology tasked with building customer understanding and targeting messages. Right now, technology-driven customer engagement is at an inflection point,” said McIntyre. “The vast majority of marketing teams are accelerating AI initiatives; 95% of CMOs in 2024 reported that GenAI investments are a priority.”

Gartner says CMOs must avoid the pitfalls of AI-driven excess and prioritize customer journey investments with the greatest economic return. A data- and hypothesis-led approach will help rebuild emotional connections with customers who are feeling misunderstood and drive a mutually productive growth engine.

Photo by Carl Heyerdahl on Unsplash