Back to Insights AUTHOR
Matt Pyle
DATE PUBLISHED
27.07.17

Hey Alexa, how can AI be used by retailers to improve customer experience?

Artificial Intelligence or AI, is one of the hottest trends for the upcoming decade and is being adopted at an increasing rate within many sectors, with forward-thinking organisations looking to benefit from the efficiencies available.

We’ve all heard the big, exciting ventures such as self-driving cars; tech companies such as Google, Uber & Tesla are leading the way whilst traditional, established automobile manufacturers lag behind. The next sector that needs to swiftly consider the implementation of AI within their organisation is the Retail sector, or risk irrelevance at their peril as Amazon and other disruptors begin to breathe down their necks.

There are many opportunities available for the near and far future adoption of artificial intelligence within both e-commerce and Bricks & Mortar stores. The implementation of artificial intelligence within the retail domain is likely to be less headline grabbing than driverless cars.

The immediate experiences that customers are likely to see is the adoption of artificial intelligence chatbots and virtual assistants. Chat-bots started appearing in earnest in 2016 as Facebook Messenger opened up their service, and now common customer queries can be answered accurately, speedily and consistently by a machine. The customer can now find and receive immediate answers to their queries, without the need to stumble through onerous telephone menus or navigate to a website’s FAQs.

Whilst chatbots rely on pre-programmed responses in the attempt of providing “frictionless” customer service, virtual assistants are AI bots that use machine learning to try and communicate more effectively. The big name Virtual Assistants such as Siri, Alexa and Google are already helping with common natural language queries such as “How is the weather today?” or “When is the next train from Leeds to Manchester?”, but the implementation for retail could reside in personalised service and tailored recommendations.

Over a fifth of Brits would consider buying products through a chatbot, and on average, would be willing to spend £315 in a single transaction. The ability to remove human emotions, traits and subjectivity from the merchant side of the purchasing process allows a customer to find exactly what they’re looking for through a natural conversation with a non-natural machine.

One prime example of this in action is from December 2016 when the clothing brand North Face introduced IBM Watson (AI winner of tv show, Jeopardy) into their website as a “Find a Jacket” feature. The AI asks questions to the user such as “where will you use the coat?” and “when do you need it for?” to find a contextual match. As a result, customers who used the AI feature were more likely to convert than those who didn’t, the average order value increased, and three out of four users said they would interact with the AI again.

With almost two thirds of all millennials saying that they value artificial intelligence for recommending products or services, it seems the perfect time to jump on the bot train!

In our next insight we’ll be looking at how AI can be used behind the scenes for operational efficiencies. Can’t wait that long and want to talk about how we can improve your retail operation? Great, we can’t wait to hear from you. Get in touch with our Head of Retail, Rich Ellis, by emailing him or phoning him on 0113 201 0621.

Matt is a Project Manager, who brings a wealth of knowledge within the retail sector. Prior to joining Answer, Matt had worked within project delivery for Morrisions helping to deliver digital improvements internally and throughout their 400+ stores. He is passionate about agile delivery of quality software that enable clients to meet their expected outcomes.

We help retail companies of all sizes to shape, design and develop innovate bespoke digital experiences that put digital enablement at the heart of the company to increase growth and fulfill their potential.

Get in touch with our Head of Retail, Richard Ellis, at richard.ellis@answerdigital.com to see how our development and user experience expertise can help you deliver suitable AI experiences.