The National Retail Federation forecasted 2023 holiday sales to grow between 3 percent and 4 percent. And while sales growth has slowed due to the pandemic, economic uncertainty, and other factors, retailers must still compete — if not compete even harder — for consumers’ eyeballs and wallets. The smartest retailers will leverage advanced technologies like conversational artificial intelligence to stand out from their competitors.
While the 2023 holiday sales season presented an opportunity for retailers to test conversational AI, this year will see leading brands fully integrate solutions like AI-powered voice assistants for sustainable gains. In fact, 75 percent of retail and consumer product CEOs believe companies with the most advanced generative AI will end up on top. Advanced conversational interfaces will become pivotal in 2024, giving companies excelling at both customer experience and operational efficiency a competitive edge.
Organizations that create customer-led AI voice assistants to deliver on-brand conversational experiences will take retail to the next level in 2024. Benefits of harnessing this technology include:
1. Improved Customer Experiences
The majority of customers (64 percent) want to shop with companies that can meet their needs in real time. Intuitive voice assistants and chatbots can meet this expectation by providing instant access to product details and account information through self-service options. Hyperpersonalized recommendations based on individual purchase history and browsing behavior will create tailored shopping experiences. With well-trained voice AI in place, customers get quick answers without wait times.
These voice assistants also ensure that only complex customer inquiries reach human agents. Intelligent routing based on machine learning prevents overloading call centers. First-call resolution rates also see significant improvement. This reduces the call volume that agents have to handle and makes resolving callers’ issues more efficient.
2. Fewer, Easier Returns
In 2022, 10 percent — and even as high as 16 percent — of e-commerce orders in the U.S. were returned each week during the holiday season. With 2023 forecasted to be even worse, retailers must find new ways to manage this trend in 2024.
Clarifying product details upfront using AI assistants reduces returns driven by unclear information. Conversational interfaces mimic human salespeople by answering all customer questions before purchase. Building confidence in a product leads to better buying decisions and, ultimately, less returns.
In the case of an actual return being made, automated systems quickly route returned items back to inventory or flag them for inspection. This speeds up processes like crediting accounts and sending replacements, improving customer satisfaction and bottom lines.
3. Overstaffing Prevention
Retailers face a challenging balancing act when staffing stores throughout different times of the year. To optimize the shopping experience, retailers must have adequate staff on hand to provide quality customer service amid higher store traffic while striking the right balance to control costs.
This is where AI can make a difference. By leveraging customer data and predictive analytics, retailers can forecast store traffic patterns and better align employee schedules with customer demand. Machine learning algorithms can then continuously optimize schedules to avoid overstaffing. This prevents retailers from incurring unnecessary staffing costs that eat into slim profit margins.
The future success of retailers hinges on deploying advanced AI to remove friction, increase efficiency, and strengthen engagement. Deploying AI throughout the customer journey will provide a key competitive advantage in 2024 for brands striving to deliver personalized, branded shopping experiences that promote customer retention.
Yan Zhang is the COO of PolyAI, a company that builds enterprise conversational assistants that carry on natural conversations with customers to solve their problems.
Yan Zhang is a tech leader bringing revolutionary AI to the hospitality sector. As COO of PolyAI, he brings together business and AI leaders to deploy virtual assistants in large-scale enterprise applications. Recent deployments include restaurants, hotels, and casinos in the UK and US. Previous to PolyAI, Yan was a Sloan Fellow at London Business School and ran a series of successful startups.