The Monthly Marketing Minute: How Lowe's, Taco Bell and KFC Are Leveraging AI to Boost Customer Engagement
The latest industry news in how brands are using AI
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Today marks the first issue of a new series on Backstage Pass, the Monthly Marketing Minute. Each month, this series will cover breaking marketing and business news around a particular topic related to customer engagement. This month’s issue will look at how companies are currently leveraging AI to better engage with customers. We’ll cover 3-5 news stories each issue.
AI is Being Pushed From the Top
eMarketer is a good follow on X if you like keeping up with digital marketing news in particular. Case in point, a new article from eMarketer finds that the CMO/C-Suite is the top driver of AI initiatives at most US and UK brands. This gives you great insights into marketing priorities as we head into 2025. Bottom line is executives don’t need to be sold on the value of AI.
Lowe's Reveals Total Home Strategy for 2025
Last month, Lowe’s shared some general plans regarding its Total Home Strategy launch for 2025. The plan has 5 main pillars, including:
Drive Pro penetration.
Accelerate online sales.
Expand home services.
Create a loyalty ecosystem.
Increase space productivity.
There’s two areas of this strategy that caught my attention. First, Lowe’s is going to integrate AI throughout the areas of the strategy, especially when it comes to employees engaging with customers in-store.
Second, Lowe’s will be combining its DIY and My Pro efforts into one loyalty program called MyLowe’s Pro Rewards. This program is loosely set for a Q1 2025 rollout. I will be covering it more in depth later this year for an issue of Backstage Pass.
Finally, Lowe’s also announced it will be bringing ‘rural offerings’ to 150 additional stores. It seems the main focus of this effort is to offer items needed by rural farmers, especially in the South and Midwest.
YUM! Brands Says AI is Leading to Marketing Wins
On YUM! brands’ recent Q3 call with investors, executives with YUM stated they were bullish on AI heading into 2025:
“This quarter, we successfully launched personalized AI-driven marketing campaigns that, relative to traditional digital marketing campaigns, generated significant increases in consumer engagement, leading to increased purchases and a reduction in consumer churn,” said Yum CFO Chris Turner.
Apparently, Taco Bell is the brand in the YUM portfolio that’s performing the best now, and it will get more marketing attention moving in 2025. Taco Bell, KFC and Pizza Hut have all piloted new AI initiatives in 2024, and Taco Bell in particular will be expanding those efforts moving forward. So draw your own conclusions.
Specifically, Taco Bell will begin integrating AI processes into its drive thrus. If Taco Bell can find a winning formula for using AI to upsell drive-thru customers while also providing more convenience and speeding up the process, it could be a gamechanger for YUM brands.
Grocers realizing 8% boost in sales from AI
A new research study into how grocers can leverage AI to help customers claims that companies in the space can enjoy up to an 8% lift in revenue simply from using AI. Additional findings from the research include:
81% of new online shoppers are first-time shoppers with that retailer, and online baskets average three times larger than in-store.
Fourth quarter in-store shoppers show more willingness to convert to online channel shopping than during other times of year, and retaining them post-holidays leads to a greater than 3% increase in e-commerce revenue.
Small basket transactions are booming, with growth areas including alcoholic beverages and baby products.
Online shopper preferences for larger pack sizes vary by category, showing the need for tailored assortment strategies for increased sales.
Grocery seems to be an area getting a lot of AI attention currently. Many retailers in the grocery space are experimenting with using AI to help shoppers with purchase paths within the store. It will be interesting to see how this unfolds as many players in the retail space (looking at you, WalMart), will routinely re-organize items seemingly for no other reason than to encourage shoppers to spend more time looking for their favorite items, and hopefully discovering a few new ones. Retailers need to be smart enough to make sure convenience for shoppers is baked into their AI initiatives, otherwise shoppers may balk at the changes.
That concludes this first issue of the Monthly Marketing Minute. The MMM will be back as the 2nd issue of Backstage Pass each month. See you back here on Thursday!
Mack
Really interesting breakdown of how AI is being used in different industries from Mack!
I'd love to hear more about different ways companies are incorporating AI in their marketing strategy
Love the quick minute Mack. And also really interesting snapshot from eMarketer regarding executive uptake, especially as what felt like the 'conventional' heuristic in my network is that it's the execs who are the most bearish.