Why AI could be failing your retail customer experience strategy


This article is brought to you by Retail Technology Review: Why AI could be failing your retail customer experience strategy.

By Arun Mani, President, Freshworks Europe. 

The digital era has brought with it an explosion of communication platforms. From WhatsApp to email, Snapchat to Instagram, live chat to instant messaging; there many ways we can engage with one another and with organisations.

Yet despite, or perhaps because of, this proliferation, many brands – especially those in retail who have to provide consistent level of service both online and instore - are facing an increasingly uphill battle to deliver great customer experiences. Too often, the challenge of operating at a global scale is at odds with providing more personalised service.

The result? More often than not, there is now a significant disconnect between what brands think they are delivering and what customers expect when comes to their customer experience, according to our report ‘The Good, The Bot and The Customer Experience’.

Indeed, though 68% of senior decision makers in the retail industry across Europe rate their customer service as ‘excellent’, their customers aren’t feeling quite the same. A whopping 92% of European consumers, dropping only to 91% in the UK, say they have been left feeling frustrated by the customer service they receive, with top grievances including being left on hold too long and needing to repeat their issue multiple times. 

Artificial intelligence is not hitting the mark

Many retailers are turning to AI to improve their customer service offering. However, despite investing in new technologies such as chatbots, virtual assistants, facial recognition and natural language processing, businesses are still not getting it right. 41% of UK consumers don’t see a benefit of interacting with a chatbot to solve issues, while 39% would prefer to never interact with one.

Surely the point of retailers deploying AI-powered bots is that they enable the business to work more efficiently, improve customer experience and garner loyalty? So, is it the case that brands are not using them correctly? 

There are five main areas that could be causing a disconnect between brands and consumers: 

1. Viewing AI as just a technology, not in a strategic capacity – The introduction of technologies such as AI simply to optimise operations is a wasted opportunity. Retailers must be strategic, using it to augment existing teams and provide decision-makers with usable insights to truly impact customer experience. From marketing and sales to support operations, AI can help each department be better aligned, more productive, deliver greater customer satisfaction and, ultimately, deeper brand loyalty.  

2. Confusion over “why” businesses are deploying AI – Cutting costs and improving efficiency are perfectly acceptable goals for adopting AI, but they should be secondary aims to the overall objective of delivering a better, more personal customer experience. This can only be achieved by taking a strategic view and understanding how a combination of front and back office deployment will enhance customer service outcomes.

3. No ownership for managing AI in customer experience – There is marked inconsistency over whose job it is to lead on AI in UK businesses – 46% who use AI in their customer service operations put the responsibility on the CEO, with the CTO (14%), CFO (9%), CMO (6%) and COO (11%) also identified as leading AI initiatives. Added to that, a quarter (26%) of companies have no one driving adoption. For AI deployment to be successful, there needs to be a clear vision on who is responsible for how customers feel about the brand to build out a successful strategy and deploy tech effectively.  

4.  enough investment – Though European retailers are investing some money in AI for customer service – with-- 27% having invested more than £250,000 in it in the last 12 months - a business often has many competing priorities, and this may not be translating to improved customer  experience. It may be challenging to secure additional investment, but if brands persist in underfunding chatbots, they will continue to see mistakes being made, customers being put off by poor experiences, and potential revenue heading elsewhere. Businesses must therefore build this into a good business case to the organisation.

5. Believing that bots can replace humans – Over a quarter (27%) of UK consumers said that bots responded with answers that were not personal and didn’t solve the problem. Yet, customers still want a personal service. That’s why brands should be deploying bots, and AI in general, alongside human customer service staff, not replacing them. 

Perfecting the customer experience

Retailers should be applauded for embracing AI to improve their customer service performance. However, it is clear that most are still only scratching the surface of how it can be used effectively to improve the customer experience. 

It’s essential that they get it right. The stakes are high if not: 56 per cent of consumers have stopped doing business with a brand following just one bad customer service experience in the last 12 months.

It is up to retailers to improve their strategic deployment of AI powered customer service, whether in the use of chatbots or in integration across systems for a more consistent customer experience. From the outset, they need to be assigning responsibility for the deployment in AI, suitably investing in the technology and using it to enhance internal teams and provide decision-makers with practical insights.

Importantly, with consumers still prizing human interaction, they also need to use AI to enhance, not replace human customer service agents. In doing so, businesses can develop AIs that mimic the behaviour of their best agents, while freeing up headcount to focus on more complex cases. This will ultimately lead to more positive outcomes, better all-round customer experiences, greater brand loyalty and increased long-term value.

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