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Study: Majority of retailers adding AI tools within two years


Eager to improve customer communication, a majority of retailers plan to increase in the use of artificial intelligence (AI) moving forward.

This was according to “How AI Technology Will Transform Customer Engagement,” a report from Linc and BrandGarage. The study polled 104 senior-level marketing and e-commerce executives from leading retail brands.

Retailers are increasingly evaluating how to alleviate points of friction for their shoppers — a move that can lead to improved customer loyalty and satisfaction. However, 55% of retailers said that their customer service costs are rising, making it hard to achieve their goals.

Increased human resources are the number one factor for these swelling costs, followed by higher shipping, logistics and reverse logistics expenses. However, retailers cannot afford a slip in customer service, as over 80% of customers will look to other brands for a more satisfactory experience after just one bad encounter, according to data.

As a result, 87% of retailers plan to increase their use of AI in customer service, and 44% will use a conversational commerce interface. While only 7.7% of retailers have rolled out AI as a regular part of customer service to-date, adoption is growing rapidly.

Already 34% of retailers reported they have begun experimenting with customer-facing AI trials or pilots. An overwhelming majority plan to embrace AI in the next 24 months, as they seek AI-powered solutions to improve customer service and engagement, the study said.

One in five retailers already believe voice will be an important channel along with chat within two years. As voice-first platforms grow, 44% of retailers that are increasing their use of AI will do so through a conversational commerce interface such as Facebook Messenger and a voice platform like Google Home or Amazon Alexa.

Retailers’ use of AI will also extend beyond routine customer service requests. Rapidly rising customer expectations mean that a wide range of questions need to be answered quickly across various channels of engagement.

To answer these questions, 68% of retailers plan to use AI to route customer service requests, 52% will use AI to help track packages, 43.5% will use AI for product suggestions and 42% want AI to handle returns and exchanges in the next two years. The role of AI will not be limited to post-sale service, either. AI will also be used to answer pre-purchase questions (39%) and for marketing (38%).

“The data provided by this survey is a clear indicator that the time is now for retailers to take action,” said Luke Starbuck, VP of marketing, Linc. “Sitting back and waiting to see what others do is not a defensible strategy and will not yield favorable results. Retailers need to act quickly to adopt AI technologies that will help them win and retain customers.”
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