The Time is Now for Retailers to Leverage AI in Customer Service

For a long time, science fiction made many people unsure, and often fearful, of how technology would shape the future. Fast-forward to today, and many of us can’t imagine our lives without the help technology offers us. The average consumer is accustomed to living a tech-assisted lifestyle, and artificial intelligence (AI) applications are emerging to make daily routines easier and more efficient. With consumers embracing the convenience of AI, the retail industry and the most innovative e-commerce brands are taking advantage of automation. This shift is happening quickly, and retailers that don’t hop on board will be left in the dust.

As we move to the second half of the year, retailers are recognizing the critical advantages AI offers and are looking at the technology as a means to alleviate points of friction and improve customer service and engagement. For example, retailers are automating chat-based service on Facebook Messenger and voice assistance through the Google Home and Amazon Alexa platforms to unlock new revenue, reduce costs and boost customer loyalty. These are among the several surprising results we found from our recent survey, How AI Technology Will Transform Customer Engagement, which we conducted with Brand Garage. The survey revealed a number of thought-provoking trends on the immediacy of AI adoption in retail, including the following:

55% of Retail Executives Report Customer Service Costs Are Rising

Customer loyalty is waning, with customers rapidly switching to other brands if expectations aren't met. As brands focus on creating customer-centric shopping experiences, customer service costs are rising dramatically. Increased human resources is a major contributor to these swelling costs.

87% of Retailers Plan to Increase Their Use of AI in Customer Service in the Next 24 Months

While only 7.7 percent of retailers have rolled out AI as a regular part of customer service to-date, adoption is growing rapidly. With 34 percent of retailers surveyed reporting that they've begun experimenting with customer-facing AI trials or pilots, and an overwhelming majority planning to embrace AI in the next 24 months, the tipping point is near. Retailers are seeking AI-powered solutions to improve customer service and engagement.

1 in 5 Retailers Already Believe Voice and Chat Will be Dominant Channels Within 2 Years

Amazon’s record sales of Echo devices during this year’s Prime Day show consumer adoption of voice assistants is heating up rapidly. As voice-first platforms grow, 44 percent of retailers that are increasing their use of AI will do so through a conversational commerce interface such as a voice platform like Google Home, Amazon Alexa or a chat platform like Facebook Messenger.

Retailers’ Use of AI Will Extend Beyond Routine Customer Service Requests

Rapidly rising customer expectations mean that a wide range of requests need to be resolved quickly across various channels of engagement. Sixty-eight percent of retailers plan to use AI to route customer service requests, 52 percent will use AI to help track packages, 43.5 percent will use AI for product suggestions, and 42 percent want AI to handle returns and exchanges in the next two years. The role of AI won't be limited to post-sale service, either, as the technology will also be used to answer pre-purchase questions (39 percent) and assist marketing efforts (38 percent).

As we approach the holiday season, this data demonstrates that the time is now for retailers to take action. Sitting back and waiting to see what others do isn't a defensible strategy and won't yield favorable results. Retailers have an opportunity to adopt AI technologies that will help them win and retain customers, and reduce costs now; those that take advantage will reap the benefits.

Luke Starbuck is the vice president of marketing at Linc, a company that connects brands and shoppers through automated customer service.