The Retail Experience Gets Immersive in 2023 With AI- and AR-Powered Tech

With economic uncertainty and the ongoing pandemic, many people — including retailers — were ready to leave 2022 to the history books.

Looking ahead to this new year, retail trends that surged during the pandemic, like the rise of e-commerce, will continue. Recovery from the disruption caused by the pandemic will force retailers to get creative and find new and innovative ways to engage customers in 2023.

Immersive Experiences Get Real

Scrolling through Instagram instead of strolling through the mall is the preferred way to shop for many Americans. And shopping on apps like TikTok is increasingly viewed as entertainment, with Forbes reporting that 37 percent of Gen Z consumers regularly shop online for amusement.

Now that pandemic restrictions have eased, customers want to experience shopping-as-entertainment in person. Experiential retail offers shoppers hands-on activities like free classes, pop-up shops and parties. Some retailers are even renovating their storefronts to become more of an entertainment destination than just a place to purchase goods.

In 2021, LEGO launched a flagship store on Fifth Avenue in New York City that features a variety of opportunities for kids and adults to play with the brand's famous plastic toy bricks. The immersive shopping concept — which the company plans to expand to its other stores — aims to “create memorable experiences people will talk about long after they leave,” according to LEGO CCO Colette Burke.

Meanwhile, Ikea held a contest offering customers a chance to spend the night in one of its home furnishing stores before lockdowns hit in 2020. The event offered customers games, a silent disco, and an “insomniac lounge” featuring ASMR.

Consumers are willing to pay a premium for this kind of shopping entertainment, and retailers are responding accordingly. According to the Zendesk Customer Experience Trends Report 2023, 59 percent of retail leaders will increase their budget on personalization in relation to customer experience over the next 12 months.

Identifying Customer Intent is the Way of the Future for Retail

Customers want to be dazzled by immersive shopping experiences, but the pandemic has worn their patience thin for bad or indifferent customer service. Zendesk’s research shows that it takes just one bad experience for half of customers to switch to a competitor.

One proven way to improve the customer experience is for retailers to get a little help from artificial intelligence (AI). With AI, a conversational bot helps customers with simple questions, freeing agents to spend more time with customers who may have more challenging queries.

Chatbots work 24/7, organizing conversations by intent and increasing visibility on where to prioritize care. And AI’s powerful machine learning and natural language processing can be leveraged to identify customer intent — and show agents recommendations on what to do next.

Retail Tech Will Continue to Soar Into 2023

While customers want to take advantage of new technology when they shop, they may have to wait a little while longer for the promise of the metaverse to fully take shape.

In the meantime, retailers are experimenting with augmented reality (AR) to better engage with customers. Sephora offers shoppers virtual makeovers, while Tesla encourages potential buyers to virtually design their own electric car.

These kinds of immersive shopping experiences yield higher conversion rates, lower return rates, and higher sales volume for retailers, according to Forbes. But no matter how retailers innovate in the new year, creating memorable experiences for customers — whether online or IRL — will always be on trend.

Teresa Anania is senior vice president of customer success at Zendesk, a service-first CRM company that builds support, sales and customer engagement software designed to foster better customer relationships.