Director ISG
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Shaping customer experience with automation and AI

27th Nov 2019
Director ISG
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How automation and AI helps shape customer experience

Retailers know how competitive the retail sector is, how tight their margins are, and how hard it can be to build and maintain customer loyalty in these days of hyper-personalisation and instant gratification. A central challenge for retailers lies in the disparity between the way the business operates and how their customers think.

Retailers focus on the channels they operate across – physical shops and their online and mobile offerings. While some have mastered omnichannel, there’s often a conflict between their in-store service and online shopping facilities.

Customers browse, research and buy on whatever channel suits the time, place and circumstances they’re in. A lot of the time they don’t even think about specific brands or retailers, just the product that they’re interested in buying. They look for the best quality item they can find within their budget or the greatest buying experience, with the best feedback from other customers.

Customers aren’t focused on how they reach the product. They use the channel that works for them, which means that they often research and shop across multiple channels and devices.

Automation and AI can bridge the gap between how retailers work and customers shop

Automation and artificial intelligence (AI) can help to align the online and offline experience by creating a seamless, efficient and personalised service for customers. Some methods include:

  1. Augmented Reality

Many retailers allow customers to see how a product looks, as well as purchase it, from the comfort of their living rooms via augmented reality and other AI-driven apps. Using these apps, customers can see the products in their homes and make a more informed choice. While retailers like Ikea have been doing this for a while, others, such as Currys with its point and place app, are starting to offer similar services. These services reduce the number of physical touchpoints between the retailer and customer, providing the customer with a service tailored to their needs.

  1. Recommendation tools

Most of us use recommendation tools every day – whether it’s Amazon’s hyper-personalised shopping experience, or simply browsing what to watch next on Netflix. Amazon’s recommendation system is estimated to have generated 35% of Amazon’s revenue, while 75% of Netflix’s views come from recommended content.

Recommendation tools analyse and predict what we’re likely to want based on our previous engagements with the retailer. They give retailers the chance to promote items that complement what the customer is already buying, and helps them shift less-visible stock.

Retailers can enhance customer experience further by using contextual recommendations. By recommending things that the consumer wants at a specific moment and place gives people a powerful motivator to buy that item – because it appears to them at the most convenient and relevant time.

For physical stores, the challenge lies in how best to replicate this experience in-store. According to Sailthru’s report, Brick and Mortar Blindness, around 25% of the UK consumers it surveyed said that they’d been inspired to visit a store after receiving an email from the retailer. Meanwhile, a third of US respondents between 18 and 24 visited a store after getting a push notification on their phones for things like discounts and recommendations. Any retailer that collects and analyses customer data can use that data to attract the customer back to their store – whether it’s online or physical.

  1. In-store technology

Some physical retailers have started using facial recognition technology to help them provide a personalised service to customers who visit them in-store. Others use mobile beacons to provide people with offers when and where they need them. Retailers are even using AI-driven recommendation engines with these technologies built-in to provide a personalised in-store service to customers.

Retailers like Amazon Go and Walmart have started using in-store, AI-powered displays and cameras to improve the shopping experience. Meanwhile, Mango and Ralph Lauren, have introduced smart fitting rooms to make it easier for customers to see what’s in stock – this also allows the store to monitor which items are selling well. They can also use these mirrors to communicate with customer service staff, which helps to enhance the personalised customer experience that in-store shopping excels at.

Time is precious for customers, and they often simply want to be left alone to get in and out of a store as quickly as possible. Supermarkets like Albert Heijn in the Netherlands have started testing wayfinding apps, which plan the best route through the store to get all the items they need.

Retailers can use automation and AI to enhance the service they provide to customers, improving the customer experience. We will continue to see retailers use a vast array of innovative, technology-driven methods to entice customers and enhance their shopping experiences, both online and in-store. It’s those that implement these technologies quickly and effectively that will come out on top in today’s highly competitive retail landscape.

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