The power to revolutionise retail

Like many industries, the retail sector is not immune to cost-of-living pressures, including soaring inflation and the interest rate increases designed to kerb it. As conditions create a slowdown in spending, consumers seek cheaper alternatives when it comes to necessities and cut back on discretionary purchases. Consequently, retailers are compelled to explore innovative strategies to attract customers and offset the decline in sales.

In the dynamic realm of retail, adaptability is vital for businesses to thrive. As technology continues to reshape industries, a powerful combination is emerging to redefine the Australian retail landscape: the integration of generative AI as a tool for retailers.

AI will play a central role in shaping every customer interaction within the next five years. However, it is important to recognise that we are only at the beginning of the AI journey, with much more to come. While it’s exciting to envision the future, we must also acknowledge the existing limitations of current language models, which may inadvertently hinder the customer experience. To ensure optimal results, companies need to grasp areas where generative AI excels and where it still falls short, allowing them to make informed decisions and provide the best possible customer service.

With that being said, how can retailers get ahead of the new challenges that face their CX teams during this cost-of-living challenge in Australia? It comes down to working smarter — and that means AI.

Use data and AI to re-pivot strategies

Data forms the foundation of AI’s power and capabilities. It begins with the vast amount of information readily available onboard: customer profiles, interactions with your organisation, frequent inquiries and preferred engagement methods. Analysing this data provides valuable insights, allowing you to strategically integrate AI and automation throughout the customer journey and to resource accordingly. Harnessing the technology’s potential begins with leveraging the wealth of data to better understand and serve your customers.

According to the Zendesk Customer Experience Trends Report 2023, 75% of leaders and managers in Australia agree that their overall customer experience budget would increase during the economic downturn. Now more than ever, providing a great customer experience is crucial for online retailers in an environment where shopping elsewhere is as easy as clicking into a new tab.

Generative AI offers a powerful tool for fostering significant customer connections, which in turn contributes to customer retention, lifetime value and brand loyalty.

Customer service should feel high-touch for all customers, regardless of their value. While generative AI and LLMs can help, it’s crucial to deploy them strategically and with proper considerations for security, privacy and governance. That’s why we’ve been actively exploring these aspects to ensure a seamless customer experience.

The generative power

The buzz around generative AI has unlocked the potential of conversational AI in retail applications, where it can be used to improve chatbot engagement, generate interesting product descriptions, provide training content for employees and detect potential supply chain issues. Its ability to analyse customer intent and sentiment instantaneously delivers an additional layer of context. For example, a GenAI-powered CX solution could detect an extremely frustrated customer at risk of abandoning cart and route them to an experienced agent with a high-priority tag.

When consumers face a problem, they want to be able to find the answers themselves. Eighty-two per cent of consumers who have interacted with generative AI believe it will be a central tool for discovering and exploring information. Using generative AI solutions like ChatGPT can provide a conversational reply with accurate information a customer needs instead of surfacing a link to an article where the customer still has to search for the information they seek.

The technology offers extensive capabilities — it can easily answer questions, generate perfect responses and facilitate text translation, among other functions. While it does have its limitations, when seamlessly integrated with CX solutions that leverage extensive CX-specific data sets, generative AI has the power to revolutionise the retail industry.

This doesn’t spell the end for human agents, however. Instead, consumers see it as a powerful tool for improving interactions. Together EQ and IQ join forces to ensure that customers reach the right person, issues are escalated when needed and agents can provide better service with the right information (quickly) in hand.

It is here — in the elimination of manual workloads — that companies will realise the largest gains in the short term. Imagine an agent receiving an accurate customer history summary, instead of having to search that information across multiple pages or platforms. This feature alone will deliver vast customer experience improvement.

The future

While generative AI currently captures the spotlight and garners attention, it is crucial to prepare for the future. While a human-like chatbot presents exciting possibilities, the intelligence of AI is limited to its specific training. If AI were a new employee, you wouldn’t necessarily put them in front of customers on their first day. While they may possess excellent communication skills, they lack familiarity with customer support operations and processes.

Now envision AI that’s been designed and trained specifically for customer service interactions and fully optimised to excel in that domain. Suddenly, this new employee comprehends the typical challenges faced by customers and understands when to redirect them or escalate a ticket. This is precisely where the future of AI in retail lies — leveraging the potential of advanced technologies in a way that aligns with the CX use case.

A prudent approach to AI involves identifying immediate opportunities for improvement, such as automating manual tasks and enabling agents to focus on higher-value responsibilities. Simultaneously, it involves exploring, testing and refining additional intelligent layers to continuously enhance customer and agent experiences. These elements serve as the foundational components of an AI strategy that carefully acknowledges the present while keeping an eye on future advancements.

Image credit: iStock.com/AndreyPopov