Generative AI for Retail: Use Cases & Benefits

Generative AI solutions have been making waves in the business landscape.

The retail industry, in particular, has much to gain from leveraging these technologies.

As consumers become increasingly comfortable with artificial intelligence, retail leaders have a prime opportunity to transform the shopping CX with AI-driven service and efficiency.

It’s why 98% of retailers plan to invest in generative AI within the next 18 months.

But what does this mean for the evolving landscape of retail and ecommerce?

Do generative AI applications truly deliver on their promises?

And how can you effectively leverage this technology to drive tangible benefits?

In this article, we’ll explore these questions and demonstrate how businesses in the retail sector can get the most out of using generative AI.

We’ll cover:

• What is generative artificial intelligence?
• Benefits of leveraging generative AI for the retail industry
• How to use generative AI retail solutions: 5 use cases
• Getting started with generative AI for retail and ecommerce

TL;DR:

Key use cases for generative AI in retail & ecommerce…

• Virtual Assistant AI Chatbots: Enhance online shopping with generative AI-powered chatbots that provide product information, self-service, tailored recommendations, customer support, and order assistance. They operate 24/7 and can escalate issues to human agents when needed.
• Real-time Assistance for Agents: Improve agent efficiency with AI tools like AI Knowledge Bases, AI Agent Copilot, and AI Agent Rephrases. These tools offer response suggestions, autocomplete features, and rephrasing options to enhance speed and accuracy.
• AI Training for Sales & Support Agents: Automate training with AI simulations that prepare retail agents for various scenarios, improving product knowledge, sales skills, communication, and handling difficult conversations.
• Marketing & Advertising: Streamline content creation for marketing teams with AI-generated text, visuals, audio, and video for websites, social media, email campaigns, and more, reducing time and costs

What is generative AI?

Generative AI is a subset of artificial intelligence that uses vast datasets to generate new content.

Unlike traditional AI systems, which are designed to recognize patterns and make predictions based on existing data, generative AI can use data to produce novel outputs.

This capability is powered by advanced algorithms and deep learning transformer models like LLMs (Large Language Models).

These technologies enable AI to learn the underlying structures of input data and generate new outputs that mimic these structures.

One of the most well-known examples of generative AI is OpenAI’s ChatGPT models.

These generative AI models can produce detailed and human-like outputs based on a given prompt.

ChatGPT has been trained on diverse and extensive datasets, allowing it to understand and reproduce a huge range of text on countless topics.

Beyond text, generative AI has made significant strides in image, audio, and even video generation.

The potential applications of generative AI are vast, from content creation to design, entertainment, education, customer service, language translation, and much more.

Generative AI in retail represents an innovative opportunity to enhance the customer experience, drive sales, and boost efficiency.

Use cases for generative AI in retail & ecommerce

Now that we’ve covered the basics of generative AI, let’s explore some of the key use cases for this technology in the retail industry.

Virtual assistant chatbots for online shopping

Chatbots are one of the most common use cases for artificial intelligence in retail.

Thanks to generative AI, customer service chatbots can act as virtual shopping assistants for your customers, providing services like:

• Product guidance: Highly accurate and detailed responses to product/service queries, including specifications, pricing, availability, and styling advice where appropriate.
• Product recommendations: Suggest personalized recommendations based on customer criteria and preferences.
• Customer support: Offering assistance and support with general customer service queries, such as returns policies, complaints, troubleshooting issues with a product, etc.
• Order assistance: Help with tracking the status of orders, estimated delivery times, processing payments, etc.

AI retail chatbots can both streamline the online shopping journey and enhance the customer experience.

One way they achieve this is through integration with an AI-powered knowledge base.

With Talkative, for example, you can easily create a knowledge base using URLs from your company website - plus any PDF articles, documents, spreadsheets, or other resources you have.

From there, our GenAI chatbot learns from your knowledge base datasets, becoming a brand-trained expert.

This enables the bot to answer countless questions about your business, products, and services.

It’s how leading supplement retailer and Talkative customer Healthspan achieved an 88% resolution rate for chatbot product queries.

What’s more, virtual assistant chatbots don’t need sleep or time off like your human agents.

Instead, they can be active and available 24/7.

And, in situations where a customer still needs the human touch, AI chatbots can collect customer details and escalate the interaction.

Then, your sales or support team can take over and follow up with the customer when they’re available.

This means you’ll never miss a chance to capture a lead or assist an undecided shopper - even outside of your operating hours.

Real-time assistance for sales & support agents

Generative AI in retail is not just valuable for retail customers.

It can also improve the employee experience for your support agents and sales associates.

Generative AI tools do this by offering real-time assistance to representatives during customer interactions.

With Talkative, for example, you can take advantage of the below agent-facing AI solutions.

1. Knowledge base responses

As well as integrating with chatbots, AI Knowledge bases can also help agents during live chat interactions.

Once set up, generative AI can use your knowledge base datasets and the interaction context to generate relevant response suggestions for each customer message.

These suggestions can either be sent to the customer with one click or edited before sending.

This not only accelerates response times but also helps ensure that agents provide accurate and consistent information. 

2. AI Agent Copilot

The above knowledge base responses are one component of our AI Agent Copilot suite.

Powered by generative AI and your knowledge bases, this feature is a set of AI tools designed to improve response speed and quality.

In addition to response suggestions, Agent Copilot also provides 'Navi', an internal-facing chatbot that acts as a personal AI assistant for agents.

Navi answers agent questions using the current interaction context and your knowledge base content, eliminating the need for agents to search for information manually.

This information can be crucial during a sales pitch, helping agents secure a conversion.

Lastly, Agent Copilot also offers an AI Autocomplete capability.

This works by predicting and completing agent messages, decreasing typing time and facilitating faster replies.

3. AI Agent Rephrases

AI Agent Rephrases generate improved or revised versions of agent messages during live chat interactions.

This means that, instead of having your agents manually edit and proofread each live chat message themselves before sending it, generative AI does all the work for them.

Agents can even choose a preferred style/format for the rephrases, from the following options:

• Better spelling/grammar
• Longer or shorter
• Friendlier tone
• More professional tone

All the above generative AI tools combined empower retail agents to perform better and faster.

This adds value and efficiency to the customer service experience.

AI training for sales & support agents

Training sales and support agents is a vital part of maintaining high service standards in the retail industry.

Generative AI can automate and enhance the training process, ensuring that retail agents are well-prepared and empowered when assisting customers.

With Talkative, for instance, you can leverage an AI Agent Training Simulator.

This tool enables you to pit agents against virtual simulations of interactions with consumers.

Once set up, the AI acts as a customer would in a specified scenario, allowing your agents to interact with it as they would in a real-life live chat conversation.

This speeds up the process of onboarding new hires and makes it easier for existing representatives to upskill or improve their abilities.

AI Agent Training can be leveraged by your retail business in a number of ways, for example:

• New hire training: Onboard new agents by simulating common customer service interactions and scenarios they’re likely to encounter most often.
• Product knowledge training: Train agents to be experts in product features, specifications, and troubleshooting processes by simulating complex product queries/issues.
• Sales training: Provide sales reps with practice opportunities to engage with virtual leads, pitch products or services, and handle objections effectively.
• Communication skills development: Help agents improve their customer communication, empathy, and problem-solving skills by practicing with AI in various scenarios.
• Difficult conversations: Prepare agents to manage challenging or sensitive situations, such as handling rude customers or urgent complaints.

Overall, generative AI training offers an innovative and efficient way to optimize agent performance.

By letting agents experience various scenarios via AI simulation, you’ll ensure they’re equipped with the skills and knowledge necessary for all retail sales & support interactions.

Marketing & advertising

Generative AI in retail goes beyond customer service automation and enhancing the ecommerce experience.

It can also be used to improve customer engagement through optimized marketing and advertising.

Generative AI streamlines the creative process for marketing teams by automating content creation.

From text to visuals, audio, and even video, generative AI models can aid with countless marketing content materials, for example:

• Website content (e.g. blogs, explainer articles, landing pages, lead magnets)
• Product descriptions
• Social media posts & captions
• Email campaigns
• Infographics and images
• Promotional videos
• Brochures

By using generative AI, retail brands can produce a diverse range of marketing content much more quickly and efficiently.

This significantly reduces the time and cost associated with traditional content creation methods.

Benefits of retail generative AI for businesses & customers

By leveraging generative AI effectively (with the help of the example use cases above), you can gain the following benefits…

Enhanced customer experiences

As we’ve demonstrated, generative AI in the retail industry can significantly enhance customer experiences.

Thanks to GenAI chatbots, consumers can have constant access to virtual shopping assistants.

These bots can offer tailored recommendations, analyze customer data, and provide detailed information about any product or service.

And, with the help of generative AI tools, retail agents can anticipate customer needs and communicate more effectively.

The result is improved and personalized shopping experiences for your online customers.

These experiences will positively impact sales, customer satisfaction, and customer loyalty over time.

Better customer service

Great customer service is crucial for success in the retail industry.

Generative AI models and tools can enhance customer service in the following ways:

• 24/7 access to instant automated support and self-service from AI-powered chatbots.
• Faster and more accurate responses during interactions thanks to AI-assisted agents.
• Multilingual customer service enabled by real-time translation technology.
• AI-driven analytics, reporting, and use of customer data to make targeted improvements.
• A more efficient and productive customer service team overall.

It's why 68% of agents report that generative AI helps them better serve their customers.

Improved efficiency & productivity

Generative AI in retail has a substantial impact on operational efficiency and performance.

In fact, a Gartner study found that implementing generative AI can boost business productivity by almost 25% within 12-18 months.

As we’ve covered, chatbots for ecommerce can automate a huge range of customer interactions and tasks, from product queries to order status updates.

This reduces the number of cases requiring human intervention, leaving reps with more capacity for complex tasks and high-value interactions.

For instances that do require the human touch, generative AI offers real-time assistance and recommendations during interactions.

In addition to making customer service more efficient, AI can also analyze customer data, improve inventory management, and predict market trends.

Overall, generative AI empowers retail agents to perform better and faster while taking a range of tasks off their plates - resulting in optimal efficiency and productivity.

Increased sales & revenue

The initial investment required for AI adoption is well worth the potential ROI.

In fact, implementing AI has been a huge asset for many retailers, with 69% reporting a growth in annual revenue and 72% experiencing reduced operating costs as a result.

What’s more, 84% of sales agents using generative AI claim that it helps them increase conversions.

Generative AI’s ability to yield these results is down to the key benefits discussed above, i.e.:

• Enhanced and personalized customer experiences
• Faster and better customer service
• Increased operational efficiency and productivity

These advantages combine to create a powerful synergy that not only drives revenue but also improves customer engagement and retention.

The takeaway: Getting started with generative AI in retail

Whether you’re excited or skeptical about it, generative AI in retail is only increasing in popularity.

As this technology continues to advance, brands need to embrace innovation - or risk being left behind.

That said, if you want to get the most out of generative AI solutions, you need the right platform to facilitate them.

That’s where Talkative comes in.

Our digital customer service platform offers a variety of AI-powered tools.

From virtual assistant GenAI chatbots to AI Agent Copilot, AI knowledge bases, sentiment analysis, AI reporting/analytics, real-time translation, and much more.

In addition to AI solutions, our platform offers a suite of customer contact channels - including live chat, web calling, video chat, cobrowse, and messaging.

It means your retail or ecommerce brand can deliver a seamless and AI-enhanced customer experience - at every digital touchpoint.

Want to learn more? Book a demo with Talkative today, and check out our interactive product tour.