3 Key Questions to Ask Before Adopting AI Tools for SMS Marketing

SMS marketing can yield strong results for retailers – and leveraging AI can help power personalized text-message marketing at scale. SMS is an increasingly key tool for retail marketing. According to Listrak’s research, shoppers are twice as likely to convert after receiving an SMS cart abandonment message, and 2.

6 times more likely to convert after receiving an SMS price drop alert. With SMS yielding such high conversion rates, Listrak research also found a surge in retailers’ messaging volume last year, increasing an astounding 93% year-over-year. To fuel this surge, AI can be a game changer.

Marketers can leverage AI as though it were an assistant, creating conversion-ready messages and extending their brand’s unique voice, with AI-level scale and speed. In order to reap the benefits of AI-powered SMS marketing, however, it is essential for digital marketers to also be aware of AI’s associated risks around data security and compliance.

AI, Data Privacy and Regulatory Compliance According to Deloitte’s 2026 State of AI in the Enterprise, “As AI moves from experimentation to deployment, governance is the difference between scaling successfully and stalling out.”

The report found that the AI-related risks companies are most worried about all relate to governance — data privacy and security topped the list at 73%, followed by legal, intellectual property and regulatory compliance (50%).

Enterprise leaders are right to be concerned about AI data privacy and regulatory compliance, and this consideration is especially important in regard to text message marketing. From a compliance standpoint, it’s critical to adhere to the rules to avoid penalties and ensure an optimum experience for subscribers.

From quiet hours to TCPA opt-outs and frequency caps, there are numerous regulatory requirements around SMS marketing, both at the federal and state levels. Programs that deploy AI to scale messaging programs must adhere to these rules.

In addition, from a data standpoint, there is the question of how the AI is being powered, and how the retailer’s consumer data might be secured, shared or even leveraged for other purposes beyond the brand’s own marketing campaigns.

Key Questions for Marketers When adopting and implementing AI programs for marketing, retail marketers should ask key questions about how their data will be secured and how it might be used. Here are three key questions to ask when vetting AI tools for SMS marketing: What data powers the AI model?

It is important to understand where the data is coming from to power the AI program. Is it sourced from your specific retail vertical? If not, do you want performance data sourced outside of your vertical and target demographic to inform your campaigns?

On the flip side, if the data is coming from your vertical, might your brand’s data be used in turn to power the model going forward, with other retailers benefitting from insights gleaned from your program? What is the data source?

With stricter privacy laws, the decline of cookies and rising consumer expectations, a first-party data strategy enables marketers to build trust and engage more effectively than third-party data, since first-party data is willingly shared by customers through SMS opt-ins.

For first-party data sourcing, make sure there are transparent privacy policies and clear language when collecting consent, that data collection is minimized and that there is purpose limitation, with data used only as previously disclosed to the data subject. How do you handle compliance?

With emerging technology like AI, data privacy and security rules are constantly changing, so it’s important to trust your vendor and understand how, where and why your customer data is used.

The people behind the AI tools also matter; ensure they’re up to date on compliance rules and that there’s oversight into your program so that you are not the only one looking out for your best interest. ‍The Bottom Line Mobile messaging is a powerful way for marketers to drive growth and create meaningful connections with consumers.

As consumers increasingly expect to receive timely text communications that are tailored to their shopping habits and needs, AI is an invaluable tool to scale retail SMS marketing programs. But before you adopt a new AI technology, it is important to ask key questions to ensure data security, regulatory compliance and, ultimately, generate long-term success.

Cheryl Sanders is the VP of Mobile Strategy at Listrak, a leading cross-channel personalization platform. In her role, Sanders spearheads Listrak’s mobile messaging strategy, enhancing market presence and customer engagement, providing subject matter expertise in SMS compliance and analyzing technology and market trends to drive innovative mobile solutions.

Sanders has been named among Mobile Marketer’s Mobile Women to Watch.