Building customer trust with responsible AI in retail

In recent years, the usage of personal data to drive commercial initiatives has often faced public scepticism. When dunnhumby asked customers across Spain, France and Italy in our latest RPI research (Retail Preference Index), we found that on average one in three people are perplexed about how retailers protect and use their personal data.

Consumers have grown wary of how their data is used since past missteps across industries have eroded trust. As AI and advanced data science become more embedded in the retail experience, we face a pivotal moment: will AI follow the same path of mistrust, or can we chart a new course grounded in responsibility and transparency?

At dunnhumby, we believe the answer lies in the latter. Responsible AI is not just a compliance requirement, it is a strategic opportunity for retailers and brands to lead with integrity, earn trust, and deliver value to customers.

The retail sector’s unique role in shaping trust

Retailers and CPGs are uniquely positioned to lead the way in responsible AI. These are brands that consumers interact with daily, often in deeply personal contexts like feeding their families or managing household budgets. The trust placed in these relationships is powerful, and it must be protected.

In the UK, the Information Commissioner’s Office (ICO) recently recognised Tesco Clubcard as one of the 40 innovations that have shaped privacy rights over the past four decades. This recognition underscores the potential of loyalty programmes to deliver societal and economic value when they are built on a foundation of transparency and respect for privacy.

Personalisation: a consumer expectation, not a peril

Despite the concerns, personalisation remains not only accepted but expected by many consumers. A recent IAB Europe study found that 80% of consumers believe that personalised ads can be useful if delivered transparently and with clear value, and they prefer fewer, more relevant ads over a high volume of generic ones. Just as we expect a doctor to tailor advice to our medical history, or a teacher to speak to us as the parent of a specific child, consumers increasingly expect retailers to understand their needs and preferences.

From email and app promotions to in-store product ranges that match customers' shopping needs, retailers and brands have opportunities to demonstrate the value they create with customer data. They can show customers how this incredible asset, the personal data customers trust them to manage and utilise through AI, truly improves their daily lives. Trust in data usage stems from how well retailers and brands prioritise customer interests and needs above all else.

AI and data science can power this kind of hyper-personalisation but only if they are deployed responsibly.

Responsible AI: what it looks like in practice

• Transparency: Timely and clearly informing customers about what data is collected and why (for example, a grocery app displays a short notice explaining that it tracks purchase history to improve weekly offers via a personalisation algorithm).
• Choice: Giving customers meaningful control over their data and how it influences their experience (for example, a retailer offering granular options of personalised browsing experience in the retailer’s ecommerce site, personalised recommendations and tailored marketing).
• Explainability: Making automated decisions (such as personalised pricing or product recommendations) understandable and accountable (for example, a loyalty program explains why a customer received a specific discount e.g., ‘Based on your frequent purchases of organic snacks’).
• Customer Benefit: Design AI-driven services for maximising value for the customer, not just the business (for example, a pharmacy chain uses AI to remind customers when they’re due for a refill, helping them stay on track with their health).

When these principles are embedded into retailer and brand interactions and services, the results speak for themselves: lower opt-out rates, fewer complaints, increased customer engagement and net promoter score, and stronger customer loyalty.

A call to action for retailers and brands

The retail industry has a chance to lead by example and reverse the negative sentiment that has too often accompanied data-driven innovation. Retailers and brands can show that personalisation and privacy are not mutually exclusive, they are intertwined and mutually reinforcing.

This approach is not only good practice, but also increasingly expected. The ICO, in its 2025 strategy on Artificial Intelligence, emphasises that AI systems must be designed and deployed in ways that build public trust and safeguard individual rights. The ICO highlights the importance of transparency, accountability, and responsible innovation as pillars of trustworthy AI.

At dunnhumby, we share this vision. We are committed to helping retailers and CPGs build data-driven, AI-powered experiences that are not only effective but trustworthy. Because in the end, trust is the most valuable currency we have.