New research from customer care automation platform Linc, in partnership with BrandGarage, addresses the overwhelming emphasis retail execs are placing on automated platforms to improve customer communication, with 87 percent of the retailers surveyed planning an increase in the use of AI to service their customers moving forward.

In 2016, 82 percent of customers stopped doing business with a company after a bad experience, according to the Internet Trends 2017 Report by Mary Meeker of Kleiner Perkins. At the same time, customer service costs are rising dramatically. As a result, retailers are increasingly turning to customer service and engagement automation technologies that leverage AI, including chat on Facebook Messenger and voice through voice assistants such as Google Home and Amazon Alexa, to unlock new revenue, reduce costs and boost customer loyalty, satisfaction and lifetime value.

If you were to look 24 months ahead, how much more do you expect to use AI?

How artificial intelligence will save customer experience

This study, How AI Technology Will Transform Customer Engagement, explores the increased value retailers are placing on AI to alleviate points of friction and improve margins and revenue through their customer service and engagement. Key findings include:

55 percent of retailers report that their customer service costs are rising

Increased human resources are the number one factor for these swelling costs, followed by higher shipping, logistics and reverse logistics expenses. However, retailers cannot afford a slip in customer service, as over 80 percent of customers will look to other brands for a more satisfactory experience after just one bad encounter.

How artificial intelligence will save customer experience

87 percent of retailers plan to increase their use of AI in customer service, and 44 percent will use a conversational commerce interface

While only 7.7 percent of retailers have rolled out AI as a regular part of customer service to-date, adoption is growing rapidly. 34 percent of retailers surveyed reported they have begun experimenting with customer-facing AI trials or pilots. An overwhelming majority plan to embrace AI in the next 24 months, as they seek AI-powered solutions to improve customer service and engagement.

1 in 5 retailers already believe voice will be an important channel along with chat within 2 years

Amazon’s record sales of Echo devices during Prime Day 2017 show consumer adoption is heating up rapidly. As voice-first platforms grow, 44 percent of retailers that are increasing their use of AI will do so through a conversational commerce interface such as Facebook Messenger and a voice platform like Google Home or Amazon Alexa.

What benefits do you expect to gain from implementing AI-powered conversational interfaces like messaging platforms or voice assistants (e.g., Facebook Messenger, Amazon Alexa)?

How artificial intelligence will save customer experience

Retailers’ use of AI will extend beyond routine customer service requests

Rapidly rising customer expectations mean that a wide range of questions need to be answered quickly across various channels of engagement. To answer these questions, 68 percent of retailers plan to use AI to route customer service requests, 52 percent will use AI to help track packages, 43.5 percent will use AI for product suggestions and 42 percent want AI to handle returns and exchanges in the next 2 years. The role of AI will not be limited to post-sale service, either. AI will also be used to answer pre-purchase questions (39 percent) and for marketing (38 percent).

“The data provided by this survey is a clear indicator that the time is now for retailers to take action,” said Luke Starbuck, VP of marketing at Linc, in a news release. “Sitting back and waiting to see what others do is not a defensible strategy and will not yield favorable results. Retailers need to act quickly to adopt AI technologies that will help them win and retain customers.”

Download the report here.

The 12-question online survey conducted by Brand Garage polled 104 senior level marketing and ecommerce executives from leading retail brands. Respondents represent the majority of retailer categories: 36.5 percent are retailers selling multiple brands; 22.4 percent are direct to consumer brands and wholesalers; and 25.9 percent are retailers that sell their own products and brand. Of the 104 participants, 4 were selected for follow-up phone interviews that deeply examined the impact of AI on their individual business structures.

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Richard Carufel

Richard Carufel

Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 12 years, and has interviewed hundreds of journalists and PR industry leaders.

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