3 Ways to Use AI to Thrive in a Consumer-Driven World
The reason? When it comes to shopping, power has officially shifted from the retailer to the consumer, who demands what they want, how they want it, and when it’s most convenient for them. With the rise of technology (and e-commerce, of course), customers can make purchases 24/7 via mobile devices, computers and endless other methods.
To keep pace with customer demands — and deliver seamless, hyperpersonalized customer experiences — companies must adjust their business strategies with an artificial intelligence-first lens. In fact, retail is primed to be the industry leader in AI spending this year, with retailers expected to invest $3.4 billion on a range of AI systems, from automated customer service agents to shopping advisors to merchandising for omnichannel operations.
Today’s cutting-edge retailers are leveraging AI to build digital, customer-first, end-to-end experiences. Successful and innovative retailers are captivating consumers with these simple, but profitable strategies:
1. Automate customer service with voice-activated assistants.
When it comes to customer service, consumers expect an always-on approach. Yet, how many times have consumers gone to social media to post about a horrible experience they had with a store or brand, usually about how customer service failed to meet their needs. Thus, it's not surprising that customer service is retailers biggest pain point. Only 9 percent of consumers claim to always receive excellent customer service.
Whether dealing with a return, complaint or question, services must be attentive and helpful — not to mention delivered at hyperspeed. The days of picking up a phone to call a customer service representative are dwindling. Today’s consumers can simply go online to get their question answered and their complaints resolved.
Therefore, it's no surprise that 87 percent of retailers plan to enhance and expand their customer experiences with AI tools, mainly in the form of chatbots and voice assistants. Serving as the catalyst for customer retention and lead generation, chatbots allow retailers to not only comprehend a shopper’s previous behaviors, but also provide future recommendations — in the form of hypertailored coupons and advertising.
2. Personalize product recommendations to create unique retail experiences.
In addition to offering help, alerts and unique offers, AI technology is enabling hyperpersonalized shopping experiences. Through content-based filtering, AI is constantly collecting consumer profiles based off what they click on, add to their cart, and even scroll past to generate likes and dislikes.
Through consumer profiles, AI can generate product recommendations, often displayed through “Frequently bought together,” “Related to items you’ve viewed,” and “Things you may like” pop-ups. This level of personalization is driving tangible results: Retailers with personalized offerings are converting sales two times to three times faster than those without them.
Take, for example, clothing retailer North Face and its AI online shopping assistant, XPS, which helps consumers navigate through the retailer’s over 300-item inventory. Previously, North Face shoppers struggled to find the items they wanted, and as a result, nearly 70 percent of online carts were left abandoned. With its shopping assistant, consumers can now select their personal preferences and the app generates real-time recommendations. Of the consumers who used North Face’s XPS application, 75 percent said they would use it again.
3. Merchandise for omnichannel operations.
Retailers need to provide end-to-end customer experiences, creating seamless experiences across in-store, online and retail applications — not to mention integrated across multiple devices (iPad, computer, cell phone). According to a recent IBM study, 48 percent of consumers believe it's important for retailers to provide on-demand personalized promotions when online, while 45 percent want the same options in-store.
Omnichannel merchandising operations facilitate cross-channel and device expectations, while simultaneously enabling shopping experiences where consumers can access multiple channels at once — e.g., comparing prices and reviews; navigating in-store inventory; shortening waiting times; and purchasing, shipping and receiving products.
If the past failures of veteran brick-and-mortar retailers reveal anything, it's that e-commerce has come, and it's certainly here to stay. Those retailers that are unable to adapt fast enough will die and be quickly replaced by those with more accessible and personalized offerings. An AI-first mind-set enables retailers to provide customers with complete experiences, ones that meet their expectations from beginning to end.
Rohit Adlahka is vice president of Wipro HOLMES, an artificial intelligence-based automation platform.
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