3 craft promotions that target specific customer life cycle stages (such as new-customer acquisition, customer retention, repeat purchase, or risk of churn) or specific business objectives (such as promoting a particular brand or category or encouraging cross-selling). In a world saturated with promotions, companies can use targeted offers to stand out. Retailers that get this right can help ensure a better shopping experience while also enjoying better margins from saving on promotional costs and fueling more conversions. Ideally, marketers can develop a program of targeted offers at scale that accomplishes the following: • applies business rules and algorithms to determine offerings and timings of delivery • builds flexible, fit-for-purpose coupons (such as tiering discount rates so that those who buy more save more, limiting usage to certain categories or time periods, or designing offers that include or exclude certain premium categories or brands) • delivers targeted promotions through all available marketing channels, such as through a company website or app, push notifications, text messages, or emails • activates personalization with an always-on cadence where relevant • accompanies offers with clear, highly relevant communications, such as with dynamic recommendations that update in real time for individual customers based on their purchasing or browsing history With this variety of targeted offers, marketers can create a seamless omnichannel experience for customers, in which they receive targeted, streamlined promotions without conflicting or overwhelming information from other places. Companies should be smart about how much margin they’re giving away when and where, encourage specific objectives rather than overly broad ones, and ensure that promotions are offered at the right time to the right people (see sidebar “How one retailer unlocked growth by launching targeted offers”). From what we’ve observed, companies that push incremental sales through targeted promotions can see a 1 to 2 percent lift in sales and a 1 to 3 percent improvement in margins. Relevant marketing through gen AI–enhanced personalized content To truly enhance the impact of targeted promotions, companies can use gen AI to highly tailor copy and creative content that resonates more strongly with groups and subgroups of consumers than traditional marketing communications. Marketers have long aimed to improve the customer experience and influence consumer decisions by creating convenience or offering better prices. The next step is to make the buying experience even more convenient or enjoyable through greater relevance. Traditionally, addressing small consumer groups with customized content has been cost-prohibitive and practically infeasible. Generative AI allows marketers to develop such content at scale at lower cost. While many marketers are currently piloting gen AI programs for this purpose, most are doing so manually with one-off experimental tools