Will ChatGPT Transform Retail CX? Making the Case for AI in Customer Support

Since its launch in November, Open AI’s ChatGPT has left no industry untouched and retail is no exception. Grocery delivery giant Instacart recently partnered with Open AI to launch a new artificial intelligence (AI) chatbot feature called “Ask Instacart.” Shopify has integrated ChatGPT into its Shop app. Many retailers are quickly realizing they need to figure out how to use this technology themselves.

One area where AI will change the game for retailers is customer service. Talkdesk’s Future of Retail Customer Service Report found that 54 percent of retailers investing in customer service software are doing so to increase customer retention. While AI isn't necessarily new to retail customer support, it's quickly advancing, creating new opportunities to improve customer experience (CX). Here are three ways AI can enhance customer service capabilities, ultimately boosting customer retention.

AI as a Chatbot Game-Changer

ChatGPT is a language-based AI capable of holding entire conversations with users. AI like ChatGPT can effectively manage initial customer interactions, setting up human agents for success. If AI-powered chatbots assume the role of contact center agent, they can accelerate contact centers from a cost center to a growth channel. In our research, we see that retailers have started to recognize the value of their contact centers. Fifty-eight percent of respondents said growing revenue is their primary reason for investing in customer service, with 19 percent citing cost savings. What makes ChatGPT so alluring is that it can potentially do both.

It's estimated that AI systems can handle most customer interactions outside of complex scenarios comprising 20 percent of conversations. GPT-3 has 175 billion parameters, which function similarly to brain neurons, and these platforms have studied the internet to predict the next word or phrase in a conversation. Moving forward, retailers’ CX agents could fall into two categories: 1.) high-value agents who handle complex matters and, 2.) steering agents who oversee a team of chatbots and step in to keep things on track when needed. For example, generative AI-powered chatbots can manage the initial customer support interaction, either resolving the issue or providing a detailed summary of the interaction with suggested solutions for the human agent upon escalation. Supported by AI, human agents can oversee multiple conversations simultaneously and create an interruption-free experience.

Revolutionizing Customer Data Collection

Our research found only 43 percent of companies use data to personalize service interactions. This means most brands aren’t learning from past mistakes to improve CX, and instead provide generic or potentially irrelevant information to customers. Consider a customer who previously called with a question and is now back with another issue. If the agent doesn’t have a record of the previous interaction, they're likely to repeat bad practices. Conversely, good customer interactions can be training tools for agents.

AI offers in-depth insights that humans cannot generate alone. It empowers self-service for shoppers, enabling them to find answers without speaking to a human agent. When a live agent is needed, AI can evaluate the context of the conversation and recommend an efficient resolution. In fact, our Future of Customer Loyalty report found that the top driver of customer loyalty is issue resolution on the first contact. Additionally, generative AI’s ability to “remember” previous conversations and interactions enables AI-enhanced chatbots to generate automatic FAQs that account for the issue at-hand and previous customer concerns.

Fostering Ongoing Conversational CX

Companies often interact with customers across multiple channels, but only 14 percent of retailers’ contact centers are integrated across platforms — creating friction for customers. To resolve this friction, AI can identify and address common challenges across platforms to make customers feel they’re part of a seamless, personalized journey.

Our latest report found that 64 percent of consumers are open to interacting with AI if it results in faster resolution, and tools like interaction analysis and real-time experience sensors can offer powerful insights to transform transactions into conversations. Another customer pain point with chatbots or automated support is the lack of empathy, and a sense that they’re talking to a robot with a limited set of pre-programmed responses. However, generative AI has the power to foster empathetic chat and voice bots that can mimic an interaction with a “real” customer service agent.

AI can be a dirty word for some retailers given prior experiences, but the reality is that the technology is key to creating meaningful and efficient customer engagement. This means embracing a unified approach that captures interactions in all channels and a customer data platform that serves as a single source of truth throughout the organization. The insights from customer interactions will tie to strategic outcomes that drive the business forward. Whether a conversation begins in person, online or on social media, customer support should be able to pick it up where it last ended, letting the consumer know that the retailer cares about them as a person and not just as a number.

Shannon Flanagan is vice president of retail industry strategy at Talkdesk, an end-to-end cloud contact center and CX solution.