AI Empowerment in Retail: Utilizing Generative Technology to Amplify Customer and Staff Support
In the shifting retail landscape, AI is fast becoming retailers' secret weapon, helping them better understand and cater to evolving consumer behavior. With the rise of personalized online shopping, direct-to-consumer models, and delivery services, AI can unlock a host of benefits, enhancing customer care, talent transformation, and application performance.
AI's strength lies in its ability to handle diverse data sources, like emails, images, videos, audio files, and social media content. This unstructured data serves as the backbone for creating models and ongoing AI training, ensuring its effectiveness over time. This data can be utilized in various retail operations, such as improving customer service through chatbots and more effective email routing to guide users to suitable resources.
Retailers are prioritizing AI integration, recognizing its potential to drive revenue growth. According to IBM's latest CEO study, 42% of retail CEOs planning to use AI technologies like generative AI, deep learning, and machine learning to deliver results over the next three years. IDC Europe's recent study shows that 40% of worldwide retailers and brands are experimenting with generative AI, while 21% are already investing in its implementations.
Research by the research analyst firm IHL Group predicts generative AI will have a total financial impact of $9.2 trillion on retail businesses through 2029. Although generative AI currently accounts for only 9% of the retail industry's bottom line impact in 2023, IHL expects generative AI to grow to represent 78% of the total financial impact by 2029, reaching $4.4 trillion in that year.
AI equips retailers to harness vast, previously underutilized data, transforming customer behavior predictions, supply chain efficiency, and personalized marketing. In customer care, generative AI helps retailers adopt a customer-centric approach by harnessing valuable insights from customer feedback and buying habits, leading to improved product design, increased customer satisfaction, and greater sales.
AI can serve as a cognitive assistant for customer care, providing contextual guidance based on conversation history, sentiment, analysis, and call center transcripts. Additionally, generative AI can enable personalized shopping experiences, fostering customer loyalty and providing a competitive advantage.
When it comes to operational efficiency, AI technologies can optimize pricing strategies, inventory management, and logistics. By predicting demand fluctuations using generative AI for dynamic pricing and analyzing factors including delivery times and shipping costs, retailers can create a seamless shopping experience for customers while potentially saving costs and enhancing customer service.
Generative AI can likewise use historical sales data and external factors to help predict demand more accurately, preventing stockouts and excess inventory while automating inventory replenishment and allocation. Efficient management of these aspects can streamline operations and boost overall performance.
A third critical area of impact is talent transformation, where retailers can leverage chatbots for recruitment and onboarding, making processes more efficient. Once onboarded, employees can benefit from personalized and adaptive training programs created by generative AI, helping identify individual learning styles and knowledge gaps, addressing technology illiteracy, and building new skills for existing talent.
IBM has developed AI solutions to help address these needs, offering businesses various access modes, including IBM® watsonxTM, a cloud-native AI and data platform that is flexible, IBM® watsonx Orchestrate TM, IBM® watsonx Code AssistantTM, and IBM® watsonx AssistantTM, as well as open-source platforms like Red Hat® OpenShift® AI and seamless integration with partners' products.
With these tools at their disposal, retailers are well-positioned to embrace generative AI as an integral part of their strategies, navigating the increasingly complex and fast-paced consumer landscape effectively. IBM launched watsonx to help businesses capitalize on the opportunities of generative AI and foundation models, offering an enterprise studio for AI builders to design, validate, tune, and deploy both traditional machine learning and new generative AI capabilities powered by foundation models through an open and intuitive user interface.
Through 2029, the retail industry can anticipate substantial financial benefits from generative AI, including improved efficiencies, increased customer loyalty, and higher returns on investment. Effective implementation and ethical use of AI will be crucial to realizing these benefits without compromising consumer trust or privacy.
- In the retail industry, AI is being recognized as a valuable tool for businesses, particularly in enhancing customer care and talent transformation.
- IBM's latest CEO study shows that 42% of retail CEOs plan to use AI technologies like generative AI, deep learning, and machine learning over the next three years.
- Research by the research firm IHL Group predicts generative AI will have a total financial impact of $9.2 trillion on retail businesses through 2029, with generative AI expected to grow to represent 78% of that total impact by 2029.
- AI can help retailers better understand and cater to evolving consumer behavior through the use of data sources like emails, images, videos, audio files, and social media content.
- AI can be used to improve customer service through chatbots, more effective email routing, and analysis of call center transcripts.
- Generative AI can help retailers adopt a customer-centric approach by harnessing valuable insights from customer feedback and buying habits, leading to improved product design, increased customer satisfaction, and greater sales.
- AI can serve as a cognitive assistant for customer care, providing contextual guidance based on conversation history, sentiment, analysis, and call center transcripts, and enabling personalized shopping experiences, fostering customer loyalty, and providing a competitive advantage.
