September 2017 | News | Trends

Engaging Customers Through AI

Tags: Reverse Logistics, Retail, Retail Logistics, Supply Chain

Retailers’ use of AI will extend beyond routine customer service requests. Rapidly rising customer expectations mean that retailers must quickly answer a range of questions across various channels. To answer these questions, 68 percent of retailers plan to use AI to route customer service requests, 52 percent will use AI to help track packages, 43.5 percent will use AI for product suggestions, and 42 percent 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 percent) and for marketing (38 percent).

Retailers will rely heavily on technologies such as live chat, Facebook Messenger, and Amazon Alexa for customer service, according to a new research study from Linc and Brand Garage. How AI Technology Will Transform Customer Engagement highlights the overwhelming emphasis retail executives are placing on automated platforms to improve customer communication, with 87 percent of the 100 retailers surveyed planning an increase in the use of AI to service their customers moving forward.

In 2016, 82 percent of customers stopped doing business with a company after a bad experience, according to the Internet Trends 2017 report by Mary Meeker of Kleiner Perkins. At the same time, customer service costs are rising dramatically. As a result, retailers are increasingly turning to customer service and engagement automation technologies that leverage artificial intelligence (AI), including chat on Facebook Messenger and voice through assistants such as Google Home and Amazon Alexa, to unlock new revenue, reduce costs, and boost customer loyalty, satisfaction, and lifetime value.

The Linc study explores the increased value retailers are placing on AI to alleviate points of friction and improve margins and revenue through customer service and engagement.

Key findings include:

  • 55 percent of retailers report that their customer service costs are rising. 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 more than 80 percent of customers will look to other brands for a more satisfactory experience after just one bad encounter

  • 87 percent of retailers plan to increase their use of AI in customer service, and 44 percent will use a conversational commerce interface. While only 7.7 percent of retailers have rolled out AI as a regular part of customer service to date, adoption is growing rapidly.
  • 34 percent of retailers surveyed report they have begun experimenting with customer-facing AI trials or pilots. A majority plan to embrace AI in the next 24 months, as they seek AI-powered solutions to improve customer service and engagement.
  • One in five retailers already believe voice will be an important channel along with chat within two years. Amazon's record sales of Echo devices during Prime Day 2017 show consumer adoption is heating up rapidly.

As voice-first platforms continue to grow, 44 percent of retailers that are increasing their use of AI say they will do so through a conversational commerce interface such as Facebook Messenger and a voice platform such as Google Home or Amazon Alexa.

"The data provided by this survey is a clear indicator that the time is now for retailers to take action," says Luke Starbuck, vice president of marketing for 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," he adds.

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