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More retailers use AI to improve customer service

Retailers are increasingly applying artificial intelligence (AI) to better personalize customer service initiatives, and momentum is increasing.

Fifty five percent of retailers plan to leverage AI technology within three years, and applications will vary, according to the “2018 Customer Experience/Unified Commerce Survey,” from Boston Retail Partners (BRP).

AI’s ability to learn from data, identify patterns and make decisions with minimal human intervention makes it a credible option to improve customer service. Some retailers use it to offer purchasing suggestions based on customer responses to a series of questions. Others use it to pinpoint the most convenient time of day to reach out to consumers with product suggestions, which are also based on past clicks and website visit data.

According to data from NPR and Edison Research, (AI) personas such as Siri, Alexa and “Google” are becoming much more mainstream, with 16% of Americans currently owning a smart speaker. It is also the catalyst for customers and retailers increasingly embracing chatbots as a viable replacement for traditional human customer service.

Retailers are increasingly leveraging AI-powered chatbots for conversational commerce services. AI uses customer responses to a series of questions of purchase history to offer merchandise suggestions. For example, Sephora uses a Kik chatbot, to offer a one-on-one mobile chat experience to offer ideas on new makeup looks and identify products in tutorials to offer customers a better shopping experience. In-store, the chatbot is becoming a personal shopping assistant by offering product recommendations, reviews and ratings.

Currently, 7% of retailers are using AI as digital assistants and chatbots. Another 48% plan to implement this capability within three years.

While chatbots can be a useful customer service tool, some consumers may not know if they are talking to a real person or a bot until they’ve already entered the interaction. Without transparency, that lack of clarity may also turn off some consumers.

“Transparency is a big discussion for AI. Do you want the customer to think they’re speaking with a real human being or should you disclose that this is a conversation with Watson or some other AI technology,” said Jeffrey Neville, senior VP and practice lead, BRP. “That’s a decision retailers have to make right now, as AI using voice is probably going to mess up the conversation at some point, and the customer is going to realize that they’re talking to a computer.”

Other technologies that will improve customer service over the next three years include augmented reality (31%) and virtual reality (21%). These, along with AI, are expected to continue changing the shopping experience and the customer journey, according to BRP’s study.
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