Consumers Voice How They Really Feel About the Use of AI and ML in Retail Experiences

It’s rare that a new technology draws as much fevered interest as ChatGPT, but then again an OpenAI chatbot that speaks and writes full paragraphs, writes college essays, and de-bugs and explains code fixes doesn’t come along every day. Most conversational chatbots today aren’t as advanced as ChatGBT, even with its many limitations. Even so, because the chatbot is a staple on many retail websites and is often one of the first interactions consumers have with a brand, consumers tend to have strong opinions about how it’s used by brands to communicate with them.

Responses from a recent Redpoint Global survey indicate that consumers are aware of artificial intelligence and machine learning in a marketing context, with 73 percent saying that the advanced technologies have a potential to impact customer experience. However, nearly half (45 percent) said they don't understand how the technologies are being implemented. The chatbot exemplifies these findings, with consumers rating it as the most ideal use of AI to improve the customer experience (of several options), yet a majority (70 percent) still say they prefer human interaction over a chatbot.

Beyond chatbots, AI has the potential for a much broader impact on customer experience. Asked to think of their own customer experiences, 77 percent said that a positive CX still needs an element of human touch. Consumers also expect transparency, with 58 percent claiming that they want companies to be clear about when AI is used. More important than transparency is a desire for consistency, with 76 percent of respondents saying that if they sensed disjointed communication with AI across channels, it would make them less likely to trust and continue interacting with a brand.

A familiar example of such a disjointed experience might be answering questions from a chatbot, only to be transferred to a customer service rep who asks the same questions.

One takeaway from the survey is that retailers need to be aware that consumers expect more of advanced technologies as they contribute to their own experiences. As we’ve seen from other research, consumers expect a seamless CX across all channels of engagement, with most expressing frustration when a retailer’s communications and marketing messages are inconsistent depending on the channel they visit.

To deliver on this expectation, any AI or ML tool intended to enhance customer experience must have a full understanding of the customer. That's where ML tools like ChatGPT break down as they only understand the customer at a surface level. The best uses of ML are more pointed use cases to segment customers effectively, to recommend products for cross-sell, to place the right messages in front of the customer at the right moment in the right channel. These ML use cases require a more nuanced understanding of customers that's fueled by customer data — their preferences, their behaviors, their intent.

Again, thinking about a chatbot on a retailer’s homepage that identifies a customer through a device ID, will it have any concept of household dynamics? If the customer self-identifies, will it know when a call was placed to the call center, or if the customer recently initiated a return? Pairing the right data with the right ML tools resolves these issues.

In short, consumers welcome AI and ML as complementary components of a digital-first, seamless customer experience. Whether consumers are familiar with how these tools are being used or whether the technology works behind the scenes, they will spot any errors. What’s most important is that a consistent and relevant CX remains the priority, which clearly needs to be driven by precise customer data used in the right omnichannel context.

John Nash is chief marketing and strategy officer at Redpoint Global, a customer data platform.