How Will AI Improve Customer Experience?

4 min readSep 13, 2019


There are many reasons why people stay loyal to a retailer. It may be because of the quality of their products, pricing or even because of the convenience the store offers in terms of its services. What’s important to note is that if two stores sell the same product at the same price, the service will become the differentiating factor. In many cases, customer experience can make up for price differences.

For example, take a restaurant that has two sections- an air-conditioned section and a non-air conditioned section. The food served in both sections is the same but the price is lower for the latter. On a hot day, which section would you choose to be seated in?

Can AI Make A Difference?

Customer experience is the most important factor in brand loyalty. Thus, it isn’t surprising to note that retailers are constantly trying to find new ways to improve customer experience. Whether it’s an online or offline store, this is where Artificial Intelligence or AI can help.

Customer Insight-Driven Personalization

Why do you trust one friend more than another to go shopping with? Usually, it’s because you assume that this friend knows not just one facet of your personality but who you are as a whole. Personalization or being able to preempt the needs of a customer is very important. This is typically based on the customer’s purchase history.

With AI, personalization can go a step further. AI mines data from many different sources and analyses it to create comprehensive customer profiles. It then uses this data to personalize the customer’s experience with the retailer.

For example, say you’re excited about an upcoming trek and posted something about it on your social media accounts. AI can process this information along with the information from your purchase history to show relevant ads of products you may be interested in- for example, trekking shoes or camping supplies.

Boost Shopping Convenience

There are times when a customer may want to buy something but doesn’t feel like putting in the effort to try it on. AI can make this shopping experience easier and more convenient. Through an app, the AI tool can map the user’s silhouette and virtually dress the user in the chosen outfit. Such tools can be used by fashion retailers as well as cosmetic retailers. It can even suggest accessories to go with the outfit and upsell related products. When it comes to checking out, AI can make the process quick and seamless.

Responsive Customer Support

There’s nothing more frustrating for a customer to need help with an issue and to be faced with a multiple-choice IVR line that does not have the option they’re looking for or to be on hold for a representative. Remember that FRIENDS episode where Phoebe tries to get through to her phone company and is put on hold for hours at a stretch.

AI makes customer support easier and a lot more efficient. It can take the form of a chatbot, a virtual assistant or a self-service agent. Chatbots can have multiple touchpoints and address basic queries while directing more complex queries to a human agent. Similarly, virtual assistants can engage customers in conversation and help them find products that suit their needs.

For customers who do not want to interact with either of these AI solutions, a self-service agent with machine learning and natural language processing capabilities can help.

According to Gartner, by 2020, 85% of all customer exchanges with retailers will be conducted without human interaction.

AI: An Aid Not A Standalone Solution

AI can be applied to all retail formats to create effective marketing strategies, automate repetitive tasks, develop engaging customer experiences and much more. When used right, it can revolutionize customer experiences. However, this does not mean that it is a complete solution in itself.

In the TV show, Suits, a virtual assistant named Donna is created based on the behavior of an actual assistant named Donna. The device talks in her voice and responds to situations in the same way she would but as her friend points out, it lacks empathy and intuition.

Similarly, AI can recommend products that match the customer’s profile but this is not always enough. Say you’re looking for a dress. By analyzing trends and the other dresses you’ve bought in the past AI can make a few recommendations. But, it cannot guarantee that any of these dresses will look good on you.

Thus, for truly excellent customer experience, AI must be used in harmony with human effort.

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