How AI Can Improve Customer Experience

In the past few years, artificial intelligence (commonly referred to as “AI”) has made immense progress and has found many applications in various industries. The retail sector is no exception. In a recent study conducted by BRP Consulting, it was discovered that in the next three years, there will be a 45% increase in the use of AI by retailers, notably from a customer experience perspective. Let’s examine some aspects of artificial intelligence that can benefit online as well as brick-and-mortar retailers.
How AI Can Improve Customer Experience



Detection of customer patterns

Jenny Yang, Principal Product Manager and Data Scientist at Vancouver, British Columbia-based customer intelligence platform Vision Critical AI believes artificial intelligence can transform businesses and improve customer experiences “in ways that otherwise wouldn’t be possible”.


AI solutions, if implemented efficiently, go unnoticed by consumers and other business stakeholders, yet tremendously simplify and improve everyday tasks such as reducing the need for human participation for customer support and discovering deep insights at a fast pace that can positively influence business decisions.


Jenny added: “AI is particularly necessary for brands looking to provide exceptional customer experiences thanks to its ability to detect patterns in data and provide actionable insight based on its findings. Using the technology, brands are able to process and analyze both quantitative and qualitative data — quickly and at scale,”.


The United Services Automobile Association (USAA), a consortium of companies that offers insurance and investment products to current and former the United States Armed Forces members has utilized an AI developed by Saffron Technology (an Intel company). Analyzing a multitude of factors enables the matching of broad patterns of customer behavior to those of individual clients. In 2016, the AI had helped USAA improve its guess rate from 50% to 88%, increasingly knowing how users will next contact and for what products.


Improved product discovery

“Traditional rules-based e-commerce technology is hard for retailers to manage while also delivering a poor experience for their shoppers. With a better AI solution in place, retailers are more competitive because shoppers can more easily buy what they seek,” says Pavan Sondur, Co-Founder & CEO of Unbxd, a product discovery platform that applies data science to connect shoppers to products.


The Unbxd solution captures and processes more than 50 shopper data signals which are leveraged to power personalized search, navigation, and product recommendations on a number of e-commerce sites.


Ashley HomeStore, a major US-based furniture store chain, reports it has experienced a 28% e-commerce revenue increase since implementing Unbxd (as well as a 35% and 33% increase in site search orders and average order value respectively).


Chatbots: a more personalized shopping experience

Conversational agents (also commonly called chatbots) use natural language processing and artificial intelligence so humans can have intelligent conversations with them. Retailers can implement personal shopping assistants to provide a more customized experience for customers. AI-powered bots can help shoppers find what they are looking for, in the right style, color, and size – and can even make personalized recommendations based on a few simple queries.


Rare Carat, an online jeweler, puts a chatbot to answer questions and help with searches. “Rocky” the chatbot, which has been referred to as “the world’s first artificial intelligence jeweler”, helps educate customers about diamond rings and other products found in the store.


Efficient inventory management

Retailers are increasingly using advanced monitoring and analytics frameworks to accurately forecast and optimize inventory levels. Real-time tracking of inventory in physical and online stores can efficiently monitor which items are out of stock. The idea is simple: quickly replenish stock, therefore improving the customer experience.


Six years ago, I.T.’S., a Japanese private-label clothing and accessory manufacturer achieved significant benefits by introducing EPC/RFID tag encoding technology (a universal identifier that provides a unique identity for every physical object anywhere in the world), saving time and money on store operations. Their stores each stocked about 15,000 items. Performing a store inventory without such a system typically took two employees four days to complete. With the new framework in place, a single person took a complete storewide inventory in two hours or less, highly contributing towards inventory accuracy.


AI adoption by retailers is bound to greatly increase in the next few years, making customers happy both at the mall and in the comfort of their smartphones.