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Generative AI Is the Future of Retail

This article was published on April 3, 2024

From ecommerce storefronts and mobile apps to true omnichannel experiences, retailers have experimented with a variety of industry-defining technologies over the past few decades. Now, with 90% of customers in our Global Customer Engagement Report (GECR) saying they're more likely to shop with a brand that offers personalized recommendations and another 80% showing willingness to work with artificial intelligence-based tools, the next milestone in the future of retail is clear: Generative AI is primed to have a business-defining impact for any that adopt it.
 

Of course, you don’t have to look far to see the immense impact generative AI has already made across industries. The technology can generate new visual, written, and even video content based upon the content it is trained on, making it extremely useful for companies wishing to create highly personalized experiences and content at scales teams of human would struggle to sustain; in retail, that could mean anything from pinpoint-precise recommendations, highly functional (and automated) customer service, personalized product photos and virtual try-ons, or numerous other customer- and business-facing use cases. 
 

In this update, we’ll explore generative AI's most intriguing – and potentially highly lucrative –  use cases in retail, with a focus on giving customers and employees the tools they need to thrive.

 

Photo illustration of two women; the woman on the left is holding her mobile phone and pointing at an image on the screen to show the woman on the right

Omnichannel conversational commerce is paving the way

The easier it is for people to make informed purchases, the more likely they are to do business with your brand. Per Salesforce, 79% of global customers “expect consistent interactions across departments,” and our GECR indicates 38% of customers are frustrated when businesses don’t provide personalized offers. Combine those facts and it's easy to see the impact an intelligent, contextually aware, always-online presence — three traits generative AI brings to the table by default — can have for retailers looking to drum up business.

Just as enticing, many of the biggest strengths of generative AI dovetail with an increasingly omnichannel retail industry. The technology can be deployed essentially anywhere companies and customers engage one another, including SMS and social media. Likewise, its contextual intelligence makes it great for delivering personalized recommendations and requesting/taking information (think: survey requests and results) on any screen the business wishes to use for outreach. With a text-to-voice component, recommendations can even be relayed over the phone, opening the gates to customers who prefer to connect with a human.

In the past, the phrase "omnichannel customer engagement" meant giving customers a choice in how they engaged with the business. Today, customers expect a 1:1 relationship that carries across formats and provides an integrated, frictionless experience every time. In that regard, it's fair to say conversational commerce will be a cornerstone of successful retail going forward — giving your business a serious advantage and fostering more in-depth customer relationships.


A turning point for customer service automation

With the right technology in place, self-service interactions start to look and feel like real engagement with a customer service representative. Considering just how fast customers want answers to their questions these days (63% say long wait times are a frustration and another 75% say they would stop buying due to repeated communications issues, per the GCER), generative AI will be an important tool in the battle to keep the people buying products perpetually satisfied.

For common inquiries, like shipping updates, account changes, and return processing, generative AI tools can already take charge of the conversation and provide customers with the results they're seeking. Businesses can use these tools to provide a conversational lift to self-service interactions at any scale, at any time the customer wishes, and from wherever in the world they're located.

That's great in and of itself, but looking at the GCER, there are even more customer service automation benefits to consider. For example, 63% of customers claim to be frustrated by having to repeat themselves to multiple departments, and half feel frustration when conversations from one channel are not captured in another. Generative AI tools can free agents to resolve issues that require human input, and the same customer service chatbots — when connected to a cloud contact center — can enable agents to keep a full overview of chat history without missing a beat.

Clearly, AI-enhanced customer service options can be a huge help on both sides of the counter.

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AI empowerment and the future of retail

Google reports that 81% of decision-makers in the retail industry feel urgency to bring generative AI into the fold. It's another prominent sign that technology is the future of retail. But, like many cutting-edge advancements the industry has mastered, first-movers may have trouble finding the staff skills, knowledge, and technical resources to make the leap quickly and without friction.

The challenge gets deeper when you factor in the need to establish seamless customer communications across channels. For that reason, it's fair to assume low-code/no-code omnichannel AI offerings, along with products that offer a deep level of individual care and consideration to the implementing business, will continue to gain popularity among retailers of all technical needs and skill levels.

For retailers seeking to speed time to market without limiting the AI solution's output or capabilities, guided help and low-code deployment offer a smoother, more capable set of customer-facing and business-facing options from the start, like the ability to change the IVR and associated content based on data the system pulls from your CRM. The same level of support and care makes it easy to expand into new channels and even new markets, with tools that support generative AI functionality in many spoken and written languages from day one.

Advice: Working with a partner who currently provides your telephony, messaging, and contact center solutions can make it easier to hit the ground running with generative AI. If your current vendor doesn't offer that level of capability and a strong selection of partnering services, it's worth considering a switch.

Don't sleep on generative AI

Generative AI is the future of retail. Retailers embracing the technology report higher conversion rates, more satisfied customers, greater brand loyalty, and less strain on human agents. On top of that, rapidly evolving customer expectations require a technology that will keep transforming the industry for the better for a long time to come, and generative AI can deliver.

That said, the real question at hand is: Can you effectively implement generative AI within your workflows and across all customer-facing endpoints? Partnering with the right vendor can help, and with so many potential use cases and high-value benefits, the sooner you act, the happier you and your customers will be with the results.

Ready to get started? Explore AI-powered Vonage solutions now including Vonage AI Studio and Vonage Conversational Commerce.

 

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