The Impact of AI on Retail in 2024 

This year, AI has transformed the future of customer experience and is quickly becoming a key driver of growth and productivity across industries. The retail industry is no exception to this trend.

Currently, over three-quarters of UK business leaders (77%) are concerned that their company is missing out on the transformational benefits of generative AI. This, combined with consumers’ rising expectations, places huge pressure on retailers to implement AI and enhance the overall shopping experience, to maintain a competitive edge.

To succeed in this new AI world, every retailer needs to be focused on leveraging their proprietary data safely and securely.

Redefining the meaning of personal shopping 

Through intelligent data, brands now have the power to turn every shopping interaction into a meaningful and rewarding personalised experience, whether that is through recommending the perfect gift for a friend or finding the best deal for a new gadget.

With AI, retailers can leverage shopping history data and trends to provide users with personalised suggestions, rooted in their online behaviours, preferences and location. Predictive AI can then analyse data to predict future demand and make recommendations on stock levels to keep shelves full.

Such shopping experiences are key to customer engagement, retention, and loyalty in today’s retail landscape. According to Salesforce’s Connected Shoppers report, one in six shoppers have already used generative AI for purchase inspiration. This is having a significant positive impact in helping connect consumers to the products they love and we know this growth will continue.

Rewards at the ready for returning customers

In 2024, customer loyalty will continue to be emphasised as a key driver of growth, as acquiring new customers becomes increasingly expensive. The success of this hinges on providing outstanding personalised customer services and building loyalty programs to identify and retain valuable customers.

Generative AI also has huge potential to transform the customer service experience, and in turn drive customer loyalty. Through AI-powered chatbots, retailers can reduce wait-time and boost agent efficiency by tasking chatbots with simple customer queries, whether that be locating an order or changing shipping details.

By leveraging purchase history and abandoned cart data, retailers can also provide loyal consumers with targeted rewards and incentives.

Personalised, seamless experiences drive shoppers to the buy button

Automation and seamless experiences are giving time back to retailers and consumers. A key takeaway from the holiday season in 2023 is that the mobile phone is fast becoming the remote control for shopping, instantly connecting consumers to brands as they navigate across online and offline channels.

A record-breaking 79% of Cyber Week commerce traffic was on mobile phones, up from 76% in 2022. Social traffic on mobile was a critical acquisition channel – representing 10% of all referrals to retailer websites.

Marketers are also continuing to embrace alternative communication channels to engage on-the-go consumers. The volume of messages sent via push notifications, SMS, and streaming services (OTT) are increasing substantially quicker – they grew 37% globally this Cyber Week – compared to the more modest growth of traditional email (9%).

Anticipating in-store and online demand 

Another core expectation for retailers in 2024, is the expected surge in shopping activity in January spurred on by returns, new purchases, and gift card redemptions.

To adeptly navigate this heightened demand, retailers will need to place a strategic focus on scaling services, particularly by empowering customer service agents with data intelligence. This approach ensures that even as demand increases, customer interactions remain both efficient and personalised.

Reliance on data-driven insights becomes crucial in addressing the diverse needs arising from returns, new purchases, and gift card redemptions.

In the dynamic retail landscape, AI is swiftly becoming a transformative force, with many retailers foreseeing significant industry changes. Whether a retailer’s goal is top-line growth or bottom-line efficiency, focus should be on enhancing the customer experience – and AI can help.