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Putting the AI in retail

By Navkinder Sanghera, Salesforce head of UK retail | Wednesday December 20 2023 | UPDATED 21.12.23

Navkinder Sanghera, head of UK retail & consumer goods, Salesforce explains how AI will reshape the retail ecperience

The growing potential and reality of artificial intelligence (AI) on the customer experience has become a pivotal driver for growth and efficiency across all industries this year. As AI continues its evolutionary journey, the impact on the retail sector is poised for transformation. 

Anticipated developments include enhanced personalisation, the optimisation of advanced supply chain management, the realisation of immersive virtual reality shopping experiences, and the seamless integration of online and offline retail platforms.

However, amidst the enthusiasm for AI's potential, it is important to address key concerns of bias and misinformation, data privacy, and the preservation of the human within the shopping experience.

To navigate these challenges successfully, retailers must proactively invest in re-skilling its workforce, robust data protection measures, and the development of ethical AI that prioritises trust and unbiased decision-making. Striking this balance will be pivotal in harnessing the full potential of AI to shape a more efficient, customer-centric, and sustainable future for the retail industry.

Incentives for returning customers

In 2024, customer loyalty will remain a focal point for growth, especially as acquiring new customers becomes increasingly costly. The key to success lies in delivering outstanding personalised customer services and developing loyalty programs to identify and retain valuable customers.

Generative AI holds substantial potential to enhancing this loyalty. AI-powered chatbots, for instance, can reduce wait times and enhance agent efficiency by handling routine customer queries, such as order location or shipping detail changes. Retailers can further capitalise on purchase history and abandoned cart data to provide loyal customers with targeted rewards and incentives.

Through intelligent data utilisation, brands now possess the capability to transform each shopping interaction into a meaningful and gratifying personalised experience. AI empowers retailers to leverage shopping history data and trends, offering users tailored suggestions based on their online behaviours, preferences, and location. Predictive AI goes further by analysing data to forecast future demand and make recommendations on stock levels, ensuring well-stocked shelves.

Driving data-driven purchase decisions

Personalised shopping experiences play a pivotal role in customer engagement, retention, and loyalty in the contemporary retail landscape. According to our Connected Shoppers report, one in six shoppers have already utilised generative AI for purchase inspiration, and this positive trend is expected to grow.

A noteworthy insight from the 2023 holiday season is the increasing role of mobile phones as the shopping remote control, seamlessly connecting consumers to brands across online and offline channels - 79% of Cyber Week commerce traffic in 2023 occurred on mobile devices. This underscores the need for retailers to embrace alternative communication channels, such as push notifications and streaming services, for engaging on-the-go consumers. Marketers are adapting to this shift, sending 37% more messages via push notifications, SMS, and streaming services during Cyber Week compared to traditional email.

Data-driven insights continue to be essential in addressing diverse needs and maintaining personalised customer interactions even as demand surges. The role of AI in this dynamic environment is crucial, facilitating data-driven decision-making to enhance the overall shopping journey.

In-store and online demand

I expect a surge in shopping activity in January, driven by returns, new purchases, and gift card redemptions.

To effectively manage this heightened demand, retailers must strategically scale services by equipping customer service agents with data intelligence. This approach ensures that even as demand increases, customer interactions remain both efficient and personalised.

Success in the future AI-driven era depends on our adaptability to focus on the customer. Finding harmony between technology and customer service principles is key. 2024 looks to see a retail landscape where AI and human intuition work together to enhance the shopping experience for everyone, as retailers continue to adapt and evolve their methods.

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