Artificial Intelligence is having a profound impact on a range of industries, but how can its ever-evolving models benefit the retail for customers and merchants alike?
Kevin Carson, SVP of FreedomPay, outlines why AI can become a “game changer” for retailers by adding newfound layers of customer personalisation, enhanced fraud detection tools and an accelerated customer service.
In the last year, we’ve seen many industries grappling with the question: what will Artificial Intelligence (AI) mean for the future of our industry?
In retail, the situation is no different, as businesses look at how they can make the most of this emerging technology at a time when they continue to face lower consumer spending due to slow economic growth.
While the industry is showing some green shoots, stats show that footfall in July across the UK continued to decline 3.3% YoY, making it more important than ever for brands to invest in new tools to retain shoppers and traffic.
For retailers, this environment means greater competition. Customer loyalty is increasingly shifting towards brands that offer the best deals, the quickest checkout, and the most streamlined, personalised experience. As competitors vie for spending, retailers can no longer rely on customer loyalty from previous engagements alone.
It’s against this backdrop that AI and automation could be a gamechanger for retailers. From creating more personalised experiences for customers to streamlining back-end processes and giving employees more time to cultivate excellent customer experiences, these new technologies can give retailers the competitive edge they need to thrive against the competition.
A New Era of Personalisation
Good personalisation for customers has long been the gold standard to aim for, but AI could help retailers take this to the next level. Many businesses are already using customer data to generate tailored offers, products, and experiences for consumers.
By introducing advanced AI algorithms, retailers can get even more granular in their personalisation – predicting consumer behaviour and providing them with the best offers at the time customers are most engaged.
Traditionally, retailers have been able to provide personalisation through the data they collect on customer behaviour within their own online ecosystem. However, modern AI offerings can help gain an even deeper understanding of the customer by providing access to diverse data sets that can be analysed in conjunction with existing customer data.
For example, syncing with a customer’s browsing data could enable retailers to recommend products that better align with their interests, thereby increasing customer satisfaction and driving positive buying behaviour. In the future, retailers may even look to data sets like weather patterns or data on upcoming events in a customer’s geographic location to recommend different products at the right times.
AI can also be used to provide customers with a frictionless checkout. For example, by analysing data like purchase history, location, and device to offer the most relevant payment options upfront, such as suggesting Apple Pay to iPhone users or displaying preferred local payment methods. This kind of payment personalisation makes shopping simpler, easier, and faster, thereby increasing conversion rates.
Fraud Prevention with AI
Security will continue to be a key priority for retailers, as data breaches and instances of fraud can significantly impact consumer trust and loyalty. This is becoming an increasing headache for retailers. With fraudsters inventing new ways to steal personal information, businesses face more pressure than ever to secure their customers’ personal data.
Thankfully, AI is helping businesses fight back against fraud by providing retailers with enhanced detection. By analysing anomalies in transaction patterns, AI algorithms can stop a potential fraud attempt in its tracks, reducing the risk for consumers and businesses alike.
The good news for retailers is that they don’t need to worry about embedding this technology themselves, as many leading payment providers already have advanced AI fraud detection built into their systems.
So, as long as retailers are partnered with trusted payment providers, they can rest assured that this leading technology is enabling them to stay a step ahead of fraudsters and limit the financial and reputational risks associated with fraud.
Enhanced Customer Service
Generative AI (GenAI) can be an extremely helpful tool in managing customer enquiries. Advancements in GenAI mean that chatbots and virtual assistants are more advanced than ever, with the ability to triage issues effectively with customers.
This 24/7 support means customers have access to quick answers to common questions when they need them. They can also manage a large volume of questions simultaneously, meaning human customer service teams can spend more time on complex customer issues triaged to them.
For customers, this means quicker responses to their questions, and when they are referred to human agents, they have reduced wait times because the simple questions are managed directly with the chatbots. It can also lead to greater work satisfaction among human agents, as more monotonous tasks and questions are handled by chatbots and virtual assistants.
As the economy continues its slow recovery, retailers are likely to continue facing a challenging customer landscape. However, by leveraging AI to increase personalisation, optimise processes, and enhance security, retailers can remain competitive.
In an industry defined by customer experience, AI can help unlock a brighter and more profitable future.
