How market-leading retail brands are using AI
Your friend posts a photo of their totally on-trend new shoes. You know you need a pair—but discover they come with a £500 price tag. What do you do? Well, if you’re an H&M customer, you upload the photo into its virtual assistant, and leave its AI to find the closest match. You can even chat to the virtual assistant to refine your search, for example, by letting it know your shoe size.
It’s just one example of how leading retailers are racing to realise the potential of AI. The range of uses for the technology—from analysing shopper behaviours to driving semi-autonomous delivery vehicles—is such that the retail industry is predicted to spend $9.8 billion on AI in 2025, up from just $1.3 billion in 2019.
Today, many of the most exciting opportunities stem from AI’s ability to support, enhance, and transform digital customer experiences. And there’s every reason for retailers to seize those opportunities.
In the post-pandemic retail environment, even more of our shopping is happening online—online sales accounted for a record 33.9% of all retail spending in the UK last year. Unsurprisingly, many online-only retailers are thriving. The majority of consumers 58% believe that, even after the pandemic they’ll have more digital interactions than they did previously.
In this new world, very few retailers can afford to provide lacklustre digital shopping and service experiences. Indeed, the smartest brands are working hard to deliver personalised, consistent, on-brand experiences both online and in store. And AI is helping them.
Seb Reeve – Director of International Go-To-Market, at Nuance comments. “The best hybrid experiences today use a combination of digital customer engagement technologies to create a seamless shopping experience between the physical and digital store. So, regardless of whether customers prefer researching online before buying instore or vice versa, they know they always have the best seamless experience they can
AI as an ever-ready shopping and service assistant
From finding the pair of shoes in a customer’s photo, to assisting them through checkout, changing their preferred delivery slot, and even handling an exchange—virtual assistants are now providing effective support for shoppers at every step of their purchase journey.
The result isn’t just an improved experience for customers: it’s lower costs and greater revenue for retailers. One of UK’s largest retailers integrated Nuance Virtual Assistant into its webchat to help customers with common issues like the incorrect entry of promotional codes. In its first two years of deployment, the virtual assistant resolved 70% of cases without the need for human involvement and saved £2 million of online sales that the company might otherwise have lost.
AI as the perfect partner for live agents
AI and live agents have fast become a customer engagement power couple. Retailers increasingly use virtual assistants to front-end customer service and support, quickly and efficiently solving the majority of common issues. When the virtual assistant encounters a customer who wants or needs human help, it hands them over to a live agent, along with all the context they need to seamlessly continue the interaction.
But as well as working together to support customers, AI and live agents can provide essential support to each other. AI can analyse a customer’s sentiment during a service interaction to guide a live agent’s response. It can serve up suggested next steps and product recommendations, and even watch out for common social engineering scripts, keeping agents safe from fraudsters.
What’s more, a retailer’s AI can benefit from working alongside its human counterparts—asking seasoned agents for help when it’s stumped by a customer’s request, and learning from the response they provide.
The key to making the most of this powerful partnership is ensuring your virtual assistant and live chat experiences are properly integrated, or even better, based on the same, unified engagement platform.
AI as driver of consistent omnichannel experiences
When retailers do deploy AI as part of a broader engagement platform, it can help with another very modern challenge: delivering on-brand experiences in every channel. Retailers can build an AI-driven self-service experience for their IVR, for example, and then roll it out—with appropriate adjustments—across their digital and messaging channels.
As well as saving the time and resources involved in creating multiple experiences from scratch, such an approach makes it easy to seize fresh engagement opportunities, like those presented by new messaging services. Google’s Business Messages, for example, allows shoppers to message retailers directly from within Google Search and Google Maps. As long as a retailer’s engagement platform integrates with Google’s Business Messages, they’ll be able to put their existing virtual assistant in front of the customer at this key moment in the shopping journey—to answer questions about opening times, product availability, and more.
AI for security—and personalisation
As UK retailers get to grips with the requirements of Strong Customer Authentication (SCA), AI is also set to prove an invaluable ally. Part of the EU’s Payment Service Directive 2, SCA mandates the use of two-factor authentication during online payments with the aim of protecting merchants and customers from fraud. Through biometrics technologies that authenticate shoppers based on inherent characteristics, AI is set to help retailers meet the requirements of SCA without adding the kind of friction that loses sales.
But the potential of AI-powered biometrics to transform retail experiences extends far beyond fraud prevention. Once a retailer can confidently identify who a customer is, it can start personalising the shopping experience like never before, based on their purchase history, preferred channels, and the data permissions they’ve granted the brand.
Seb Reeve further explains how retailers can personalise their experience even more with AI powered biometrics:- For most retailers, one of the biggest challenges for delivering personalisation is that they usually don’t know who they’re talking to initially. Hyper-personalisation always starts with knowing your customer, and biometrics is one way it can help retailers personalise its service even further, whilst more importantly protecting both the customer and the retailer from fraud.
And then there are the brilliant biometrics use cases that no one’s even thought of yet. Leading retailers will no doubt take inspiration from the ground-breaking work being done in other industries. Telefónica, for example, recently pioneered the use of voice biometrics to determine the age of people calling its contact centre, allowing it to provide priority service to older, more vulnerable customers during the disruption cause by the pandemic.
Retail AI: The hallmarks of successful strategies
The strategies of retail brands currently blazing a trail with AI-assisted customer engagement share a few common traits.
They’re saving development time—and driving cross-channel consistency—by using a single platform for digital, messaging, and voice engagement. They’re remembering to play to the strengths of both AI and human agents. And they’re striving for genuine innovation, asking questions like, “What if someone could search our products using a photo of their friend’s new shoes?”
Dive deeper into retail AI strategy and solutions
Nuance’s AI-powered solutions help leading brands deliver secure, personalised, and innovative retail experiences. Visit our Retail CX Resource Hub to find out more, and explore a wealth of advice and insights from our AI experts.
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