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Transforming the Retail CX

Transforming the Retail CX

/ Technology, Artificial Intelligence
Transforming the Retail CX

How Generative AI will play a pivotal role.

Since its release in late 2022, OpenAI’s ChatGPT has undeniably gained prominence, making waves across various industries, including the ever-evolving retail/eCommerce sector.

The impact of this large language model (LLM) has been widely discussed and analyzed for months, as businesses in the eCommerce industry grapple with how to successfully harness its potential.

While brands are eager to explore generative artificial intelligence (AI), they remain cautious about the risks and pitfalls associated with Generative AI (Gen AI) tools like ChatGPT and Google’s Bard. Notably, one of the biggest differentiating factors between ChatGPT and previous versions of Generative AI is its enhanced Conversational AI capabilities due to its pre-training.

This article aims to explore the benefits and challenges of integrating Generative AI, while also recognizing the journey that lies ahead for brands.

What is Generative AI?

To understand Generative AI’s capabilities and potential impact on the eCommerce industry, we must understand the rapid development and advancements we’ve seen in just the last several months.

First, Generative AI is a type of AI that is capable of generating content, including text, audio, code, images, videos, and more.

Second, since the release of the Generative AI application ChatGPT we’ve seen Open AI release a new LLM known as GPT-4. Even Apple is now testing a new “Apple GPT” to rival Open AI and Alphabet Inc’s offerings, according to recent reports.

Third, Generative AI applications, including others such as GitHub Copilot and Stable Diffusion, provide brands the capability to write information, summaries, stories, and more, serving users with an accelerator and supportive tool to enhance creativity, productivity, and efficiency.

Generative AI plays a vital role in customer support by offering proactive customer care.

According to a recent Insight survey, 81% of business leaders report that their company has already established or is currently developing Generative AI policies and practices with 72% believing the technology will help boost productivity.

Retail has been one of the top two industries forecasted by IDC to have the largest investment in AI-centric technology, as it could rake in a potential added value of roughly $400 billion to $660 billion a year to the industry, according to McKinsey and Co.’s economic report.

Generative AI Benefits

As brands look to implement Generative AI, they struggle with understanding exactly how this technology can efficiently benefit their business and enhance the customer experience (CX).

Generative AI plays a vital role in customer support by offering proactive customer care. It excels in providing tailored recommendations and delivering automated answers throughout the customer’s shopping experience.

For instance, suppose a customer is searching for an anniversary gift for their spouse, the Generative AI-powered chatbot can provide information on bestsellers, new products, sales codes, shipping times, and even “best gifts for her.” This streamlines the browsing processes, making it easier to find the perfect gift.

These tailored recommendations can also include upselling options based on the customer’s browsing and purchase history. This allows customers to make an informed decision and ultimately leads to a more convenient checkout process.

Generative AI can also supply the consumer with real-time updates on the delivery status of the gift, creating a customized experience that meets their rising expectations.

Empowering Customer Support

Previously, AI capabilities had often confined users to rely on specific keywords or auto-populated phrases to navigate self-service options. This approach can be restrictive and may result in a negative CX if customers have other needs or requests that fall outside the scope of the AI’s programming. Now GenAI bots are able to consume large amounts of brand-specific content and quickly enable a positive CX.

ChatGPT enables more natural and conversational interactions. It can understand the flow of language which lends itself to a more human-like experience. In situations where a virtual agent is unable to address a customer’s order request or product challenges, the availability of live agents ensures that further assistance is readily accessible.

This combination of ChatGPT’s conversational abilities and the support of live agents creates a comprehensive and customer-centric approach to customer service.

The Challenges Still Ahead

The expectation is that the use of AI will continue to grow and expand, encompassing customer self-service interactions as well as agent assistance, coaching, and guidance.

Therefore, to optimize the effectiveness of AI and before user deployment, it is imperative to train ChatGPT with relevant content that aligns with use-case objectives.

In today’s retail landscape, customers have heightened expectations for seamless omnichannel shopping experiences and customer care. Consumers seek the flexibility to connect with brands through their preferred channels, access self-service options, and expect brands to recognize their transaction history.

While customers are feeling more optimistic about economic conditions, they are still very mindful of where and when they are spending. According to a consumer trends report, 90% of customers surveyed believe that technology will improve their overall shopping experience. Quick and accurate resolutions with minimal effort are also anticipated.

At the same time, brands face rising operational costs and the need for real-time updates. While brands are trying to integrate technology to increase speed and efficiency and decrease operational costs, they are also aware that their competitors are testing or already adopting Generative AI. And they cannot afford to fall behind and allow the competition to outpace them.

When the Generative AI technology and applications like ChatGPT are new and have glitches, it can easily frustrate customers and turn them away. That’s why it’s important to be mindful when deploying new technology or integrating ChatGPT to offset this potentially bumpy transition.

... to optimize the effectiveness of AI...it is imperative to train ChatGPT with relevant content...

It is also incredibly valuable to have team members dedicated to overseeing the data foundation of the ChatGPT before and after the implementation process to ensure the technology aligns with the brand’s messaging, ethics, and standards. ChatGPT comes with a broad knowledge base, but brands will still need to train it specifically for their brand and products.

ChatGPT requires increased capacity for real-time data processing, data warehousing, data integration, and improved data quality. However, some brands will need to invest in improving their data layer foundation before they see solid ChatGPT results.

In some instances, brands find it easier to partner with a third-party logistics provider (3PL). This allows a 3PL to handle the integration seamlessly and provide real data and insights to brands, aiding in predicting customer buying behavior and necessary inventory adjustments.

Impact Across the eCommerce Landscape

Investing in proper training is essential for brands to ensure their employees are well-versed in new technologies and their applications. AI is not meant to replace human workers but to complement them by handling repetitive tasks, allowing employees to focus on providing enhanced CXs.

To address employees’ concerns about job security, brands and industry leaders must educate and coach them about how to collaborate effectively with AI-based systems. The relationship between machines and humans should prioritize the needs of humans. It is crucial to recognize the value of human interaction with customers, as this aspect will significantly impact their experience.

Additionally, in eCommerce, where online transactions and sensitive customer data are at the core of operations, IT security plays a crucial role. Security breaches can have severe consequences, including compromised customer trust, financial losses, and legal implications. To protect customers and retailers, it is vital to maintain robust IT security measures.

As brands and retailers collect and store vast amounts of sensitive information, ensuring the proper distribution of consumer data is crucial. This segmentation prevents direct access to this data by entities like ChatGPT or other LLMs which could inadvertently compromise user privacy.

Retailers should employ a combination of technical measures and data governance practices to achieve this. By implementing strategies such as access controls and anonymization techniques, retailers can restrict the exposure of specific data points to authorized personnel only.

Additionally, adopting strict data handling policies and regular auditing can help ensure compliance with privacy regulations and maintain consumer trust.

Ultimately for brands, an efficient and seamless omnichannel experience is vital. Integrating AI in customer care enhances agents’ productivity and saves time while delivering exceptional customer service. This approach establishes a strong foundation for sustainable business growth.

Robin Gomez

Robin Gomez

Robin Gomez, Director of Customer Care Innovation at Radial, has been in the industry for 25 years. He has worked in Human Resources, Training, Quality, Operations, Consumer Insight, Project Management, BI, CI and is currently the Director of Customer Care Innovation for Radial. You can follow Robin on LinkedIn.

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