The AI Revolution in Retail Customer Service

The AI Revolution in Retail Customer Service

Customers hate jumping through hoops. A staggering 96% will move away from a brand if they are forced to put in extra effort to resolve an issue. They don’t want to contact a brand multiple times, provide context each time, or be treated as another ticket or number.

51% of Australian consumers will abandon a brand if their experience isn’t personalised. They expect instant, responsive, personalised interactions across channels of their choice, whether it is a phone call, email, chat, or newer self-service channels. They want to be able to shop online, track deliveries in-app, ask for information on a call, or return an item in-store and order a replacement.

Throughout this journey, retail customers expect brands to recognise them at each touchpoint, remember information from previous interactions, and meet their needs instantly. 

These expectations are stretching Australia’s retail service to the breaking point. But, it’s in your brand’s interest to create this hyper-personalised experience. There’s a compelling reason for this, doing so increases the loyalty and lifetime value of 79% of the customers. 

Unfortunately, Australian brands are falling short. Twilio’s State of Customer Engagement report found that 47% of consumers were frustrated with brand interactions in 2022. In 2021, it was only 42%. 

Why are Australian brands struggling to create the experience their customers want? 

Retail’s customer service challenges

There is a surge of customer inquiries across various channels.

The rise in e-commerce has increased the volume of customer inquiries, with customers now reaching out via multiple channels simultaneously. 

There’s also a diversity of customer preferences. Older customers tend to prefer phone conversations with human agents, while younger generations like Gen Z are more comfortable with text messaging.

It’s difficult for brands to keep up, especially when different communication channels rely on different technology stacks that do not integrate.

Traditional systems are overwhelmed

Retail service systems traditionally rely on human agents who can become overwhelmed with the volume and complexity of interactions that brands face today. The result? Long wait times, frustrated customers, and a negative impact on brand loyalty. 

Scaling operations during peak periods is daunting

One of the bigger challenges is scaling customer service operations during peak periods such as Black Friday, Cyber Monday or the holiday season - without sacrificing quality. Hiring temporary staff is an option. But it's costly and difficult to train temporary staff to the brand’s standards.

Technology is fragmented

Brands that have added new customer communications systems can also face a problem - many technology stacks just don’t play well with each other. 

Brands with multiple business units or franchisees often struggle with disparate technologies that don't integrate seamlessly. This fragmentation affects various aspects of the customer experience, including in-store support and contact centres, leading to inconsistent service across channels.

The issue is compounded when different locations use different technology stacks, creating further disconnection. This disjointed approach also extends to marketing outreach and customer service departments, which often operate in silos, resulting in missed opportunities for cohesive and personalised customer interactions.

Retail customer service is often viewed as a cost rather than a driver of revenue and loyalty. This mindset leads to inefficient, patched-together technology solutions and a failure to create innovative shopping experiences.

What Australian brands really need is a Swiss Army knife - one platform that bridges online and offline channels - and makes it easy to create new personalised experiences and boost revenue.

Enter: an AI-powered Voice solution

An AI-powered Voice solution can bridge the gap between online and offline channels, providing a unified platform that enhances personalised experiences and boosts revenue.

It analyses, processes, and responds to voice interactions in real-time. It understands natural language, recognises sentiment, and anticipates customer needs, allowing it to handle most customer interactions without human intervention.

Brands can use AI to create personalised customer experiences, enriched with real-time contextual information gathered from CRMs, data platforms, and engagement platforms. This technology allows them to engage their customers effectively and scale operations, while also freeing up human agents to focus on complex interactions and provide empathetic service. 

For example, a major clothing retailer can use AI-powered chatbots on their website and mobile app to assist customers with product inquiries and purchases, reducing response times, freeing up staff and improving customer satisfaction. The AI agent can then offer personalised product recommendations and upsell by suggesting complementary items the customer is most likely to buy.

AI-powered voice systems facilitate rapid scaling for seasonal peaks with minimal effort—achieving this with just a few API calls rather than extensive months-long implementations.

This makes it possible to automate and scale customer service in ways that were previously unimaginable. Trailblazing brands with mature investments in customer engagement are already reporting an average 123% revenue increase.

The future of retail customer service - a blend of AI and human touches

The most successful brands will seamlessly blend AI efficiency with human empathy. AI-powered voice technology excels at managing high volumes of routine queries and providing immediate assistance, while human agents focus on complex and value-adding tasks.

AI-powered voice is excellent for handling high volumes of routine or simple queries and providing immediate assistance. However, there will always be a need for human agents when it comes to complex or emotionally charged issues. The key is to use AI to handle the bulk of interactions, allowing human agents to focus on situations that truly require a personal touch.

Marks & Spencer, a renowned UK retailer, implemented Twilio's voice & messaging solution to modernise their customer service. This allowed them to handle over 1 million monthly inbound calls with 90% call routing accuracy. The system also improved efficiency by saving 10 seconds per contact centre call and achieved a 98% caller response and engagement rate. This real-world application demonstrates how having the correct systems can effectively manage high volumes of interactions while freeing up human agents for more complex tasks.

The right combination of human and AI-powered assistance will help brands turn exceptional customer service into a powerful driver of growth and loyalty.

Staying ahead in the competitive retail landscape

Twilio's AI-powered voice solution provides a near-human experience, acting as a brand’s best customer service representative - available 24/7, handling complex queries automatically. It reduces call volumes to human agents and equips them with contextual information for faster resolution. The result? Lower costs, higher customer satisfaction, and a consistent brand experience every time.