Leveraging GenAi to improve the retail shopping experience

Generative AI is rapidly transforming the shopping landscape for retailers and consumers, alike. It enables retailers to deliver hyper-personalized and engaging experiences to consumers that are more advertised-to, and more savvy than ever.

In an era where consumers respond to and have come to expect tailored interactions, Gen AI empowers retailers to leverage enormous datasets and apply algorithms to deliver that high level of personalization, ultimately improving the customer experience and brand loyalty.

Personalized, relevant marketing at scale

One of the biggest opportunities for Gen AI in retail is personalizing marketing at an unprecedented scale. Traditional marketing methods like segmentation and rules-based personalization only go so far. Generative AI allows a retail business to analyze a customer’s entire data footprint with that business–browsing activity, purchases, returns, customer service interactions, and more–to build true 360-degree profiles.

Most retailers (and businesses in general) have data they’re not tapping into. Whether this is from a lack of time or resources, it doesn’t really matter, Gen AI can help with both. Leveraging the consumer data retailers already have, Gen AI can recognize behavior patterns that can be used to create individually targeted marketing campaigns that perfectly align with a customer’s preferences.

This can be an iterative process, with new insights leading to the identification of gaps in data collection that would make these types of models that much more complete. These new data points can be collected, fed back into the model, and improved over time.

With a comprehensive understanding of each shopper’s preferences and context, Gen AI can then dynamically generate hyper-personalized content and product recommendations across channels, from websites and apps to email, ads, and more.

Whether it’s inspirational lookbooks, product guides, or even personalized videos and imagery tailored to a shopper’s history and preferences, AI-powered content resonates far more effectively. Especially because, as Salesforce notes, 81% of consumers want brands to get to know them and understand when to approach them.

Revolutionizing search with conversational AI

For most retailers, site search is still limited to shoppers typing in keywords and applying the same basic site wide filters. Generative AI, however, can enable conversational search assistants that understand shopper intent through natural dialogue.

These AI assistants can ask questions to clarify the shopper’s preferences, provide suggestions, and leverage retail data to surface the most relevant products. And as noted in the previous section, data points collected by an AI-powered search assistant can be fed back into that customer’s data profile, enabling future conversations with them to be even more relevant, helpful and individualized.

AI-powered customer support

Generative AI assistants can excel at delivering premium customer support, providing instant advice on product usage and assembly, troubleshooting, and beyond. Rather than having shoppers wait for a human agent, a well-trained AI can resolve many issues instantly, 24/7, by understanding incoming customer problems and questions on the fly.

As these AI assistants interact with customers, they can continuously learn and improve their own product knowledge base, ensuring future shoppers get even better service. Brands can opt for full AI chatbot automation or use generative AI assistants behind the scenes to augment human agents and help them surface relevant information faster to solve support questions more quickly.

For customer support that does require elevating issues to a human, generative AI can help streamline those processes. AI assistants can categorize and route issues to the right pools of support agents based on the customer’s language and inquiry category. Doing this can reduce hold times so customers get the specialized help they need faster.

These support improvements have real impacts on the customer experience: Customer service vendor Zendesk reports businesses using their Zendesk AI bots saw resolution times that were 30% faster, and saw their customer satisfaction scores improve by 2 percentage points year over year.

The Generative AI retail imperative

While many compelling retail customer experience improvement opportunities exist with generative AI, actually deploying it responsibly requires robust data governance and AI model risk management, along with close human oversight and controls.

The challenge for retailers will be delivering these better, hyper-personalized customer experiences while also respecting customer data privacy. For help with the development of responsible AI usage guidelines, brands can look to the National Retail Federation’s recommendations released in November 2023 for guidance.

Even with these complexities, embracing generative AI is quickly becoming a competitive necessity for retailers. The brands that move rapidly to leverage Gen AI’s personalization capabilities while adhering to the NRF’s ethical guidelines will be able to create seamless omnichannel experiences that deepen consumer relationships and increase loyalty.

That’s the ultimate path to win in today’s experience economy.