Retailers recognize the value of using artificial intelligence (AI) to enhance customer service, as 55% plan to leverage this technology within three years. According to the 2018 Customer Experience/Unified Commerce Survey, 7% of retailers are currently using AI as digital assistants and chatbots, and another 48% plan to implement this capability within three years.

Artificial intelligence is a method of data analysis that automates analytical model building to learn from data, identify patterns and make decisions with minimal human intervention. Some retailers are experimenting with AI to offer purchasing suggestions based on customer responses to a series of questions or to pinpoint the most convenient time of day to reach out to consumers with products they would be willing to purchase based on past clicks and website visit data.

"The convergence of AI with traditional customer service has the ability to transform the shopping experience," said Perry Kramer, senior vice president and practice lead, BRP. "AI offers the ability to exploit the vast amounts of customer preference and transaction data gathered and reach a much larger group of consumers on a personal level to enhance the customer experience."

Amazon and other multi-channel retailers are currently experimenting with AI to offer purchasing suggestions based on responses to a series of questions and past purchase history. Sephora, using a Kik chatbot, offers customers "conversational commerce" by offering a one-on-one mobile chat experience to offer ideas on new makeup looks and identify products in tutorials to offer customers a better shopping experience. In-store, the chatbot is becoming a personal shopping assistant by offering product recommendations, reviews and ratings.

While chatbots can be a useful customer service tool, some consumers may not know if they are talking to a real person or a bot until they've already entered the interaction. That lack of clarity may turn off some consumers, which can negatively impact your brand.

"Transparency is a big discussion for AI. Do you want the customer to think they're speaking with a real human being or should you disclose that this is a conversation with Watson or some other AI technology," said Jeffrey Neville, senior vice president and practice lead, BRP. "That's a decision retailers have to make right now, as AI using voice is probably going to mess up the conversation at some point, and the customer is going to realize that they're talking to a computer."

BRP is an innovative retail management consulting firm dedicated to providing superior service and enduring value to our clients. BRP combines its consultants' deep retail business knowledge and cross-functional capabilities to deliver superior design and implementation of strategy, technology, and process solutions.