Turning AI-driven communication networks into loyalty engines

By Dr Harish Kumar & Swarn Sagar

Consider an e-commerce platform like Amazon that presents product recommendations aligned with user preferences before a search is initiated. Or a streaming service like Netflix that suggests the next viewing option before the current selection concludes. These are not accidental experiences—they are driven by Artificial Intelligence (AI), which is transforming how brands engage with consumers.

AI has evolved from a background function to a central component of customer engagement. It enables organisations to analyse, anticipate, and respond to consumer behaviour with increasing accuracy. Today, AI not only powers operational processes but also redefines how brands interact with customers, shifting from generic messaging to deeply personalised connections.

The Changing Role of AI in Brand Engagement

AI has quietly undergone a metamorphosis in the marketing world—evolving from a backstage assistant to a central architect of brand-consumer relationships.

Its early use was largely reactive: streamlining repetitive tasks, such as answering frequently asked questions or processing service requests. As data capabilities matured, AI entered a predictive phase—drawing from behavioural insights to recommend products, anticipate needs, and nudge consumers toward decisions.

The current stage marks a further evolution: the emergence of empathetic AI. This phase involves systems that go beyond prediction and response, incorporating mood, context, and cultural understanding to enable more nuanced and human-like interactions.

This transition represents a critical inflexion point. The role of AI is expanding from automation to emotional simulation at scale. In this model, brands are not merely disseminating information but engaging through intelligent systems capable of adapting to user context and fostering interactions that resemble personalised, human engagement.

AI powers operations and reshapes brand interactions—moving from generic communication to personalised, data-driven consumer engagement at scale.

AI in Action: Leading Indian Brand Use Cases

This shift from functional automation to contextual engagement is already underway across several Indian enterprises.

HDFC Bank’s EVA, an AI-powered chatbot, handles more than 2.7 million customer queries annually. By providing 24/7 assistance, EVA significantly reduces service costs and customer wait times, illustrating a successful application of reactive AI for operational efficiency.

Myntra’s “My Stylist” feature utilises predictive algorithms to curate outfits tailored to user preferences, body types, and current fashion trends. This has resulted in a 20% increase in cross-selling and improved customer engagement. Similarly, BigBasket utilises AI to analyse purchase cycles and proactively remind users to reorder frequently consumed items such as milk or rice, leading to a 25% rise in repeat purchases.

One of the most emotionally intelligent uses of AI is evident in Zomato’s user engagement. For instance, during rainy weather in Delhi, the app may suggest hot snacks such as momos, drawing on behavioural data and real-time weather conditions. This context-driven interaction exemplifies empathetic AI—creating moments that replicate personalised, human-like gestures.

These examples reflect a growing trend toward AI systems that not only automate but also personalise and contextualise brand–consumer interactions at scale.

Beyond Efficiency: Measuring Emotional ROI

Traditionally, the success of AI implementations has been evaluated through operational metrics such as cost reduction, response time improvement, and workforce efficiency. While these indicators remain relevant, they do not capture AI’s broader strategic value—its capacity to build emotional resonance with consumers.

Brands that personalise customer engagement through AI consistently observe 25–30% higher conversion rates and longer user interaction windows. In highly competitive markets, where product and service differentiation is razor-thin, such outcomes are not just incremental; they are existential.

AI is no longer just an optimisation engine. It is now becoming a catalyst for relationships, transforming data into meaningful interactions and transactions into sustained consumer trust.

Ethical Imperatives for Responsible AI Use

As AI becomes increasingly integral to customer engagement strategies, ethical considerations are becoming more critical. Regulatory frameworks such as the General Data Protection Regulation (GDPR) and India’s Digital Personal Data Protection Act (DPDPA) require organisations to handle personal data with transparency, fairness, and accountability.

Regulatory frameworks such as the GDPR and India’s DPDP Act require organisations to handle personal data with transparency and accountability.

Consumers now expect brands to manage data responsibly. Companies that adopt ethical AI practices—ensuring data integrity, fairness, and clear consumer consent—are better positioned to foster trust and strengthen long-term customer relationships. Ethical compliance is no longer optional; it is a strategic differentiator.

Emotional AI: Building Deeper Brand Connection

The future application of AI in branding lies in its ability to deliver empathy on a large scale. Brands that combine predictive intelligence with emotional understanding can deliver experiences that resonate deeply with consumers. The brands that succeed will not just know what customers want but also how they feel, creating emotionally relevant experiences.

Brands that successfully blend machine efficiency with human empathy will create authentic, lasting relationships that transcend transactional interactions, building genuine consumer trust.

AI as a Driver of Consumer Loyalty and Trust

AI has moved beyond a luxury—it is now the foundation of brand-consumer engagement. As it evolves from reactive automation to predictive personalisation—and ultimately to empathetic interaction—organisations that evolve accordingly will win consumer loyalty—not just for a season, but for a lifetime.

In this emerging landscape, trust and personal relevance will become critical drivers of brand value. AI will serve as the enabler, translating data into connections and insights into trust. Brands that recognise and balance the technological with the human will be best equipped to thrive in an increasingly AI-driven marketplace.

AI has the potential to change everything—but its true power lies in its ability to amplify the human side of brand interactions. Brands that understand this balance will be the ones that succeed.

Dr Kumar is an Assistant Professor and Chairperson of Research at Great Lakes Institute of Management, and Sagar is an Associate Solutions Advisor with Deloitte.