AI: The Competitive Edge Retailers Can’t Ignore

Artificial intelligence adoption is no longer a question of “if.” The debate on whether AI will add value is over — yes, AI brings value, lots of value. We can look at the how, but the focus should be on the why. According to a Metrigy study, only 34 percent of retailers said that 2024 will be their company’s turning point for acceptance of AI in customer experience (CX).

AI will be viewed differently decades from now, but in today’s market it's enabling retailers to stay competitive and ahead of the curve. If you think that sounds exaggerated, consider the last time you questioned using a CRM or having a website. AI will eventually become a part of all retailers’ standard operations. Why?

Retailers stand to reap significant efficiency, satisfaction and revenue gains on both the customer and employee side. As more retailers integrate AI into their operations, those that lag behind risk losing revenue and market share in both the short and long term.

Kick-Starting Your AI Journey: Easy Steps to Get Rolling

Getting started doesn’t mean reinventing your CX strategy. Start with a small, targeted use case that has high volume but low complexity. Something as simple as identification and verification (ID&V) can, for example, take 30 seconds to 60 seconds on a phone call and be performed on millions of calls a year. If we cut that in half via AI-powered automation for 1 million calls a year, you’ve saved 8,333 hours of agents’ time. Convert that into entire days and you're looking at nearly a year’s worth of saved time.

Looking at it this way may incent you to reconsider having human agents perform simple processes, in terms of operations, employee satisfaction/retention and, especially, retail CX.

When selecting your first AI use case, here’s how to get started:

• Look for high-volume, low-complexity tasks.
• Narrow the issues to those that are solely or mostly manual, repetitive and costly.
• Map the process and identify the stakeholders and systems involved (e.g., your CRM, ticketing, the reservations department, etc.).
• Compare the complexity and estimated return on investment of each.
• Choose and begin!

By following this plan, you can reap massive operational gains and improved customer experiences — all with minimal risk and investment. By taking an iterative approach, you’ll rapidly achieve ROI from AI while validating your strategy and building the internal experience required for further use cases.

A Win-Win Scenario: Happy Customers, Thriving Employees

For customers, AI enhances the shopping experience by offering personalized recommendations and instant support through AI-powered agents. These agents can handle inquiries, track orders, and suggest products based on individual preferences, leading to increased customer satisfaction and loyalty. Imagine a customer being served an Instagram ad and being able to directly interact with it conversationally, asking questions and even completing a transaction.

For employees, AI alleviates the burden of repetitive and mundane tasks by partially or fully automating processes such as ID&V or WISMO (where is my order) inquiries, allowing them to focus on more complex and meaningful work. This means agents have more time and energy to handle the complex issues and edge cases with care and empathy, instead of rushing from call to call while the average handling time (AHT) clock is ticking away.

Moreover, agent copilot technology will sit on the agent’s desktop, proactively supporting every agent in real time, increasing their confidence, lowering error rates and, ultimately, cutting training time and costs.

There is No FOMO; You Are Missing Out

The ability to shape consumer preferences and expectations are unfortunately outside the capabilities of most companies except perhaps the top 1 percent. Amazon.com normalized both free shipping and two-day shipping. Netflix moved the world from CDs and cable to streaming. OpenAI nearly overnight changed how we search for information, write, and do business. Yesterday’s FAQ and scripted bots are simply a bad CX in the same way expensive, slow, nonmobile-friendly retail service options are.

AI is a tool, and an incredibly multifaceted one. Just as your website can share information, serve as a contact point, sell goods and services, and offer support, AI delivers value across many areas of the retail business, from the consideration phase to post-sales support and advocacy.

A Last Word on Retail’s Ultimate Game-Changer

The adoption of AI in the retail industry isn't just an option — it's a competitive necessity. It not only meets customer expectations but reduces friction in the purchase process and improves the overall experience. With a lack of qualified staff in contact centers and an inability to retain them, AI can fill the gap in the labor market while assisting and improving agents' lives. The benefits are clear — you cannot afford to miss out on AI. Your customers, agents and your bottom line will thank you for it.

Alan Ranger is vice president of marketing at Cognigy, the global leader in AI-driven customer service solutions.