Retail is evolving with the adoption of generative AI promising to revolutionise operations from product catalogue management to customer support. According to McKinsey, integrating gen AI could unlock an additional $310 billion in value for the retail sector, particularly in optimising customer interactions.
Embracing this technology offers retail businesses a competitive edge, especially with customer service leaders facing the challenge of enhancing experiences, boosting productivity, and controlling costs. Gen AI presents opportunities to scale support efficiently, simplifying processes and delivering enhanced value across the board. Finding the right solution is critical to achieving success.
Tailored experiences: The power of personalisation
Businesses need to prioritise swift and personalised support across various channels to delight their customers. Gen AI offers AI-driven self-service options tailored to customer preferences. Imagine online shopping where every product recommendation aligns with your tastes. With gen AI analysing customer data, retailers can provide highly personalised suggestions, boosting engagement and sales. This approach cultivates customer loyalty and drives revenue growth.
For example, Amazon uses gen AI to enhance customer purchasing experiences by tailoring suggestions to individuals based on their browsing and purchase history, significantly contributing to vendors’ and customers’ success. This technology helps Amazon determine recommended items, ensuring customers find what they need and leave satisfied. Amazon has taken this a step further, recently introducing Rufus, an AI assistant that enhances shopping by providing personalised recommendations through conversational queries.
Seamless support: Elevating customer engagement
Approximately 75% of customers use multiple channels to engage with retailers. They expect seamless support across various channels. Legacy customer service solutions often fall short of this expectation, leading to disjointed experiences and increased costs. By streamlining support processes and creating a single unified view of customer data, businesses deliver consistent information, reduce response times, and simplify setup and configuration for administrators.
Support may involve having AI-powered chatbots handle routine queries, thereby freeing live agents to focus on complex issues. For instance, e-commerce fashion brand Styli, a client of Freshworks, the company I work for, streamlined customer inquiries across channels, resulting in a 42% enhancement in average resolution time and a substantial productivity increase, with bots handling nearly 45% of Whatsapp queries. Timely support is a preferred aspect for customers engaging with the brand.
Smart stocking: Revolutionising inventory management
Some retailers are finding that gen AI provides invaluable insights into inventory management. By analysing historical data, AI predicts inventory needs, mitigating overstocking and understocking risks. AI can also help optimise resource allocation, such as staff scheduling, by identifying peak shopping times and popular products. AI-driven inventory management can help optimise logistics which can be particularly beneficial for Australian businesses who face challenges related to geographical distance.
Retailers like ASOS, Walmart, and Walgreens use AI technology for inventory management, leveraging data such as weather and social media trends to optimise stocking strategies and reduce inventory imbalances. By leveraging AI-driven inventory management, retailers can minimise costs, improve efficiency, and enhance customer satisfaction.
Choosing wisely: Navigating the gen AI landscape
Retailers should look for an omnichannel customer support solution that drives rapid business impact and maximises technology investment returns. Solutions should seamlessly integrate AI-powered conversational self-service, facilitating swift deflection of inquiries and seamless transitions to live agents with AI-assist tools. Look for a solution streamlining workflows and ticketing capabilities to enable prompt resolutions for complex issues, proactive insights to enhance satisfaction, and identify gaps for sustained success.
Retailers embracing gen AI will experience continuous improvements in customer service and operational efficiency, driving long-term growth and success—keeping their competitive edge and taking it to the next level.
Preethi Bridgement is senior director at Freshworks.