How AI is Redefining Retail Customer Service

31 July 2018

Artificial intelligence, or AI, is slowly becoming a part of our daily lives.

Siri and Alexa are now household names, and their users have grown accustomed to how easy they make it to access information.

And while these types of virtual assistants are primarily for personal use, AI also presents huge opportunities for businesses, particularly for customer service.

Some companies are already using AI to provide better, more efficient service, and this technology will likely play an increasingly significant role over the next few years.

AI and Customer Service

Artificial intelligence is still a relatively new concept for most businesses, but interest has increased dramatically over the past few years and shows no sign of slowing down.

At this point, that interest has mostly been centered on marketing — and has proven to be a valuable addition for many of the companies who’ve added it to their strategies.

In fact, 80% of marketing executives believe that AI technology will revolutionize the marketing industry by 2020.

AI Retail Customer Support

But AI’s value to businesses isn’t limited to marketing, and many experts have already shifted their focus to its potential for improving customer service.

As a result, IBM predicts that by 2020, 85% of customer interactions will be handled without a human agent.

This could lead to a significant improvement in the standard customer service experience, especially when you consider how much many support teams struggle to keep up with their customers’ needs.

One study from IBM found that 52% of customers have hung up on a customer support line because they didn’t wait to wait for an agent and that 50% of all customer support calls go unresolved.

While these results paint a bleak picture of the current state of customer service, they also show that there’s plenty of room for improvement — and AI might be just what it takes to improve customer service across the board.

4 Advantages AI Brings to Retail Customer Service

Automation already plays a role in many companies’ customer service processes, and many on the forefront of adopting new forms of technology are also incorporating AI.

This shift has the potential to help all types of businesses better serve their customers but holds a few unique advantages for those within the retail industry.

1. The Ability to Proactively Address Issues

AI presents huge opportunities for more advanced data analysis, and many experts believe that this will help companies more accurately identify their customers’ needs.

IBM, for example, offers a “struggle analytics” report that shows companies where customers struggle on their sites.

AI Retail Customer Support

These types of reports simplify the process of identifying user experience issues and can help businesses address the issues that are preventing customers from taking action.

Beyond that, some forms of AI can also be used to address those issues automatically.

According to the Forrester 2017 Customer Service Trends report, companies who utilize artificial intelligence will be able to, “anticipate needs by context, preferences, and prior queries and will deliver proactive alerts, relevant offers, or content. They will additionally become smarter over time via embedded artificial intelligence.”

So although simple, cookie-based personalization features have been around for years, AI offers the potential to create site experiences that are more relevant to each user.

For example, if a user browses a site in a way that indicates that they’re struggling, AI could be used to identify that struggle, then assist them by suggesting relevant knowledge base articles, FAQs, or other resources.

This way, the user could find a solution without reaching out to a customer service representative and continue browsing the site.

And in case you’re concerned about whether eliminating interactions with human customer service agents will create a less personal experience, it’s worth noting that this shift is in line with what consumers want.

Today, 71% of consumers want the ability to solve customer service issues on their own.

AI Retail Customer Support

By incorporating AI, you could help them find information even more efficiently.

Plus, when you use automation to resolve simple issues, you also free up your customer service team to focus on more complex ones.

2. Advanced Chatbot Integration

Although the earliest chatbots weren’t great for much beyond offering canned responses to simple questions, AI has helped them become much more helpful.

For example, retailers like H&M use them to help customers find specific products.

AI Retail Customer Service

When you consider the overwhelming preference for text-based support, this type of bot could be an extremely valuable addition to any retail company’s strategy.

Today, 70% of customers prefer messaging over voice for customer service. In fact, messaging is now the most preferred customer service channel for consumers in the United States, South Korea, India, and Singapore.

AI Retail Customer Service

So although chatbots are still a relatively new addition to the customer service world, they’re very much in line with the type of support most customers want.

And from a business standpoint, they can also reduce customer service costs by up to 40%.

So if you’re on the fence about using AI for your business, a simple bot could be a great starting point.

3. Faster Response Times

Today’s consumers are impatient. They expect instant responses to their questions and fast resolutions for their issues.

AI can help deliver that.

The most obvious reason for this is that they eliminate the need to wait for a human customer service representative. Automated bots are always available to help, regardless of the time of day or the current volume of requests.

But beyond that, AI can also help your customer service team work more efficiently.

In fact, according to one study by Juniper Research, a chatbot can save an average of 4 minutes per inquiry when compared with traditional call centers.

Even if your business only gets a handful of inquiries per day, that could translate to much more efficient workflow.

And if you’re not convinced, just consider that when software company Autodesk developed a virtual agent, they were able to speed up response times by 99% and cut average resolution time from 1.5 days to just 5.4 minutes.

That’s the kind of improvement that doesn’t just cut down on a company’s average wait times but helps them more efficiently handle customer service as a whole.

4. Increased Personalization

Although some businesses worry that automation will cause them to lose a “personal” feel, AI can actually help you deliver more personalized content to each of your customers.

That’s because it allows businesses to automatically adjust content and offers based on a visitor’s past browsing history and purchasing behavior.

And this approach gets results.

Just consider the following MailChimp study, which showed that segmented campaigns performed better in all metrics than their non-segmented counterparts.

Ai retail customer support

And the reason for these improvements isn’t difficult to understand.

When you use automation to tailor your campaigns and offers to individual customers, you increase the chances that the content you provide is in line with their interests — and, as a result, the chances that they’ll decide to take action.


Although AI is still in its beginning stages, it’s clear that it has the potential to shape how businesses interact with and help customers.

So if you’re looking to improve your customer service, it’s certainly worth looking into.

Whether you use it to identify customer issues, create custom chatbots, improve your site’s personalization, or simply speed up your response times, there’s still time to get ahead of the curve.

This way, by the time your competitors start using AI, you’ll be ahead of the game — and ready to move on to even more advanced functionality that’s sure to develop over the coming years.