In case you haven’t heard, artificial intelligence (AI) has rapidly evolved into a disruptive game-changer, transforming entire industries and reshaping our everyday lives.
For retailers, AI technology has emerged as the secret sauce for enriching customer experience (CX) and gaining a competitive edge, empowering brands to offer efficient, memorable experiences to demanding customers.
Generative AI (Gen AI) has garnered the most attention among the various AI technologies. Tools like OpenAI’s Chat GPT, Google’s Bard, and Midjourney help to craft compelling text, create high-quality images in any style, or even write code, boosting productivity and creativity levels to new heights.
But for retailers, Gen AI stands out for its potential to revolutionize CX, from delivering personalized recommendations that hit the mark every time, to predicting customer behavior with uncanny accuracy, to providing automated customer support that’s available round the clock—the potential innovations are endless.
In this installment of the Reshaping Retail CX series, we explore why generative AI is the key to bridging the customer journey execution gap, aligning the experiences you deliver with the ones your customers expect.
Unleashing the Potential of Generative AI in Retail
In the retail landscape, Generative AI is nothing less than a catalyst for CX transformation, making it more personalized, efficient, and engaging by automating processes, enhancing customer satisfaction, and providing valuable insights.
Here are some of the most impactful use cases and benefits of Gen AI we’re seeing right now.
Enhancing Customer Interactions
Gen AI is like a master key, unlocking vast amounts of customer data, interpreting emails, overseeing the quality of customer interactions, and providing insights into customer sentiment during a call. It can even construct knowledge bases packed with detailed product information.
In the digital shopping realm, Gen AI takes personalization up a notch. It identifies patterns in customer data and crafts product recommendations that strike a chord with individual customers, thereby boosting engagement and conversion rates.
Customer support also gets a Gen AI makeover, with AI-powered chatbots delivering instant, accurate, round-the-clock assistance. This seamless and satisfying customer service experience aligns CX more closely with consumer expectations. Yet, it’s vital to remember the importance of the human touch, especially for complex conversations.
Take Webhelp’s Polyglot, for instance. Now enhanced with Gen AI, this machine translation solution is revolutionizing how we handle complex and multilingual customer interactions. By augmenting the skills of our customer service agents, Polyglot is driving efficiency and improving the quality of customer interactions, making it a perfect fit for retail clients with multilingual customer bases.
Product Design and Content Management
With its powerful image generation capabilities, retailers can use Gen AI to create brand-relevant and on-trend designs instantly, opening up the prospect of customers customizing their own products on demand.
Generative AI is also expected to disrupt content management in retail, with the prospect of more efficient processes and potentially higher-quality content when writing product descriptions.
Regarding trust and safety, AI could be pivotal in managing, monitoring, and controlling user-generated content, reinforcing brand values, and safeguarding vulnerable individuals, which is particularly relevant for retailers that allow user reviews on their platforms.
Unique Physical Store Experiences
In traditional brick-and-mortar stores, Gen AI can help by suggesting optimized store layouts and product placements and providing shoppers with enhanced wayfinding experiences.
Imagine an AI-based app that guides you around your local store, proactively recommending products relevant to your unique preferences at each moment—Macy’s has already introduced its own version of this: an AI-powered shopping assistant.
Moreover, with Gen AI’s ability to generate extraordinarily lifelike images on demand, clothing and beauty retailers can offer advanced “magic mirror” experiences, showing customers how different products, styles, and colors would fit them—and even predict how that fit would change over time.
Operational Benefits
Beyond enhancing the customer experience, Gen AI is also reshaping how retailers operate. It’s great for extracting insights from various unstructured data sources, making it ideally suited for tasks like demand forecasting and inventory management.
Retailers can also gain a more accurate picture of upcoming demand by analyzing historical sales data, market trends, weather conditions, and social media sentiment, enabling them to minimize stockouts, reduce excess inventory, and boost operational efficiency. While not directly linked to customer experience, these efficiencies allow more time to focus on bridging the execution gap.
Understanding the Limitations, Risks, and Challenges
While Generative AI holds immense promise, it’s crucial to approach its integration with a balanced perspective. Like any technology, Generative AI has its limitations and potential risks. Understanding and effectively managing these is key to fully harnessing its benefits.
The swift evolution of AI has ignited a spirited debate among experts, including renowned figures like Elon Musk and Geoffrey Hinton. The central concern is the implications of AI, particularly if it reaches a stage where it can self-improve and surpass human intelligence.
Adding to this, the speed of Generative AI development is outpacing the creation of new regulations. Companies must carefully deliberate when deciding between human or automated customer interactions. For instance, should retailers disclose when a message is AI-generated or when a customer interacts with a bot? While the regulatory landscape is still taking shape, prioritizing transparency in all interactions is vital.
Generative AI is often likened to a ‘black box’ due to the non-transparent nature of its decision-making process. This opacity can make it challenging to ensure the quality of AI responses, especially in a customer service setting. Similarly, the phenomenon of AI hallucination, where AI confidently provides incorrect answers, can potentially erode trust in AI responses and lead to misinformation.
To ensure AI responses align with the brand’s tone of voice and meet customer expectations, retailers must provide the model with additional training data. However, this raises concerns about data privacy and data processing location, which can restrict many companies.
Despite these potential risks and regulatory challenges, the retail sector cannot afford to overlook Generative AI. Retailers should strategically deploy AI to enhance customer experience, always with an eye on caution and responsibility. This balanced approach will ensure that the integration of Generative AI narrows, rather than widens, the customer journey execution gap.
Generative AI: Shaping the Future of Retail CX
As we move into the future, it’s clear that Gen AI will be a transformative force in the retail landscape, but we expect a high adoption of smaller, more targeted AI models that are simpler to build, train, and control.
Gen AI may not drastically alter the volume of customer contact, given that most customer service interactions today are complex and require detailed investigation. However, it can significantly enhance self-service options, aligning with the escalating customer expectations for swift, efficient, and accurate self-service experiences.
Moreover, Gen AI will revolutionize various processes within the contact center. From training and coaching to quality control and real-time support, Gen AI can augment the advisor’s role and improve the customer service journey. It can guide advisors to deliver more personalized and effective service by providing the next best action—we are already seeing these benefits with our Polyglot solution.
Ensuring we use AI responsibly is critically important. Retailers must set guardrails for acquiring, refining, and deploying data, considering cybersecurity operations, and managing regulatory and privacy risks. By partnering with a reliable and skilled partner like Webhelp, retailers can develop enterprise-ready AI solutions and navigate these potential pitfalls.
With a responsible approach, retailers can leverage the power of Gen AI to transform their businesses and serve their customers better, effectively bridging the execution gap in retail CX.
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