How generative AI can help retailers retain customers

Traditional wisdom states that acquiring a new customer is five to seven times more expensive than retaining an existing one. Customer retention, therefore, is a vital lever of revenue growth because it leads to higher earnings and, in turn, greater earnings per share (EPS).

Likewise, effectively managing costs by reducing customer churn and the need for constant customer acquisition results in higher profit margins, also positively impacting EPS. To bolster customer retention efforts at scale, retailers must utilize artificial intelligence (AI), in particular generative AI (genAI).

Personalized omnichannel shopping experiences 

A pillar of retail today is omnichannel – especially as in-store and online shopping continue to blend. As such, retailers must provide consumers with omnichannel experiences to encourage customer loyalty and differentiate themselves from competitors. AI, and its ability to compile and analyze data and automate time-consuming processes, will help retailers facilitate ‘channel-hopping,’ or the desire among customers for seamless experiences across every channel and touch point. (Data Clarity, 2023)

Better customer loyalty programs 

Customer data is like a gold mine for the retail industry. The trouble is finding the hidden pockets and veins of ore. Luckily, genAI can quickly scour mountains of shopper data, like historic purchases, abandoned shopping carts, and customer reviews, to extract valuable insights. Retailers can use this information to segment their customer base and design tailored loyalty programs.

Then, through automation and workflow-based triggers, companies can send timely promotions, discounts, and suggestions to individual shoppers for maximum retention and revenue generation. Additionally, genAI analysis of customer data helps retailers identify product issues and make appropriate corrections that improve satisfaction.   

Preventing stockouts 

In retail, the Achilles’ heel of customer retention is a stockout. Today’s shoppers are impatient, and if they can’t find what they need, they’ll happily search elsewhere, which, in all likelihood, is probably a competitor. Out-of-stock scenarios are a longstanding issue for the industry. In fact, companies lose about 3% of their profits annually due to such occurrences. (Datawiz.io, 2022)

However, by leveraging genAI and big data analytics, retailers can more accurately anticipate sales, demand trends, and customer behaviors, ensuring that the correct, in demand items are always in stock. AI technology also enables retailers to set up real-time inventory alerts that notify personnel if inventory is getting too low.

Enhancing customer experience  

A brand could have the best product, but if customers have to navigate the labyrinth to receive an answer concerning product details, they might desert the purchase. By infusing AI into their customer service channels, retailers can make the buying experience as smooth and hassle-free as possible. In particular, genAI-powered self-service tools like chatbots and virtual assistants allow shoppers to answer simple requests on their own (like the availability of a product), reducing the cost of labor.

Moreover, genAI digital assistants can help employees service customers more effectively. These AI assistants can perform information searches, create content, and provide suggestions post-interaction, enhancing the customer experience and making the employee’s job much easier. (Harvard Business Review, 2023)  

Boost EPS with IntelePeer 

IntelePeer’s communications automation solutions and integration capabilities for the retail industry help your business deliver a successful omnichannel experience that strengthens customer retention and decreases churn, ultimately boosting EPS.

Connect with us today to learn about our AI-powered Smart Automation platform and solutions.