CTOs at the Helm: Steering Retail Into the AI Future

As the retail industry has increasingly shifted to digital technology, transitioning from traditional brick-and-mortar stores to online platforms, consumers have changed both where and how they shop. Augmented reality apps allow customers to visualize products in their homes before purchasing, and retailers use artificial intelligence-driven recommendations to tailor suggestions to individual tastes. The integration of smart checkout systems reflects the broader trend toward speed and convenience. These trends have dramatically shifted the role of the chief technology officer (CTO) in retail.

Historically, CTOs were the stewards of infrastructure and backend technology. However, the advent of mobile cloud computing, big data analytics, and mobile technology — coupled with the imperative to deliver an omnichannel shopping experience — has pushed CTOs to the forefront, where they play critical roles in developing digital strategies that have direct impacts on operational efficiency, customer engagement and sales.

Leveraging AI for Competitive Edge: The Strategic Imperative for CTOs

CTOs face the challenge of aligning technology strategies with business goals to boost market share and satisfy stakeholder expectations. Retail executives plan to bump automation, analytics and AI spending by 34 percent over the next three years to keep pace. By harnessing the power of AI, retail CTOs can help their brands unlock new levels of efficiency, customer insight and personalized service. Machine learning algorithms and predictive analytics enable retailers to anticipate customer needs, optimize supply chains, and deliver highly targeted marketing campaigns.

A prime example of AI’s impact in retail is intelligent virtual agents (IVAs). These AI-powered assistants drive successful and efficient customer interactions by providing 24/7 customer support. IVAs can oversee customer inquiries and manage transactions with unprecedented speed and accuracy. They can also understand and process natural language, allowing them to engage with customers in a more human-like manner.

For CTOs and their companies, the personalized touch enabled by AI-powered tools means recommending products based on individual preferences and resolving customer issues without the need for human intervention. And the benefits of automation don’t stop when the interaction ends. The data IVAs collect offers companies valuable insights into consumer behavior that they can use to keep their customers satisfied — and coming back.

Methodical AI Integration: A Guide for CTOs

The key to successful AI integration lies in identifying solutions that cater to customers’ increasing demands from their shopping experiences while simultaneously creating new efficiencies for the brand. Here are some key considerations for CTOs during this process:

Empowering Self-Service

Customers today — particularly younger ones — value autonomy in their shopping journey. Recent research suggests that nearly 60 percent of young consumers shopping in stores choose automated self-checkout over cashiers when there's an option, contrasted with only 30 percent of older buyers. Meanwhile, interest in tech-enriched customer experience (CX) is around three times higher for younger customers than for buyers aged 60-plus.

AI solutions that enable self-service options, such as intelligent kiosks or online chatbots, allow customers to find information, make purchases, or resolve issues on their terms. For brands, this self-service reduces the reliance on human agents for repetitive tasks, freeing them up to address more complex customer needs and reduce operational costs.

Enhancing Payment Processing

In an era when security and convenience are paramount, customers expect seamless and secure payment processes. AI-enabled IVAs that are payment card industry (PCI) compliant can help businesses meet these customer expectations and streamline the checkout process, which can also reduce cart abandonment rates. IVAs enable not just a smoother transaction process but also enhanced data security and compliance, leading to increased customer trust and potentially higher sales volumes.

Automating Customer Support

Customers want quick and accurate responses to their inquiries. IVAs powered by AI can automate responses to basic FAQs or troubleshooting queries, delivering customers’ desired instant gratification. This automation translates to more efficient customer service operations for brands as AI handles routine inquiries, allowing human customer service representatives to focus on more complex and high-value interactions.

By focusing on these three considerations, CTOs can ensure that their AI integration strategy meets customers’ evolving demands and drives significant operational efficiencies for their organization. The goal is to create a symbiotic relationship between customer satisfaction and operational excellence, where brands leverage AI solutions to deliver superior service experiences that customers value and distinguish the brand in a competitive marketplace.

Realizing the Value of AI Strategy

The value of a well-considered AI strategy is hard to overstate — it's about harnessing technology to meet customer expectations more effectively. For CTOs navigating this transition, the focus should be crafting a strategy leveraging AI technologies to create a seamless, efficient, and highly personalized shopping experience. By doing so, businesses not only position themselves to thrive in the competitive retail market but also set a new standard for customer engagement and operational excellence. Adopting AI, particularly through applications like IVAs, is a strategic move that reaffirms a brand's commitment to innovation and customer-centricity, promising a future where retail experiences are more connected, intuitive and satisfying for everyone involved.

Steve Akers is the chief product and technology officer at Mosaicx, a conversational AI platform that uses voice recognition and digital messaging to help users find information quickly and resolve issues without an agent.