In a bloated retail market, where small businesses compete with the big guys like Amazon and Walmart, it often comes down to the quality of your customer service to determine whether customers keep coming back. Customer service is so important that 47% of shoppers would willingly pay extra for better service. And as many as 96% of customers say that customer service determines their loyalty to a brand.

Let’s follow the trickle effect of that. If you increase customer retention by just 5%, you can boost profits by 25%–95%. Plus, loyal customers tend to buy more from brands they trust, increasing sales. Loyal customers are also more likely to recommend your brand to others, bringing more money into your sales pipeline. Cha-ching!

I know what you’re thinking: you’re a small retailer. How can you provide the same level of service as the big guys? The answer lies in AI.

With AI, you can offer the same (if not better) level of service as enterprise retailers.

Here’s how.

Use AI Powered Customer Service Tools to Personalize Shopping Experiences

Offer Personalized Recommendations

AI powered customer experience analytics help you understand, shape, customize, and optimize the customer journey. Learn about your customers’ behaviors by tracking sentiment, browsing history, and previous purchases to tailor product recommendations. You can also add personalization to your support interactions to drive upsells and offer proactive support by uncovering gaps in your customer journey and performance.

How this boosts CX: Deloitte found that 68% of consumers say personalization is the key to their loyalty. Customers want to be treated as unique individuals and feel seen. So, when brands tailor experiences to their customer’s preferences, satisfaction (and retention) increase.

Provide Virtual Try-On

E-commerce is the future. But some consumers want to “try before they buy” to see how a product fits their lives. With AI, you can provide virtual try-ons, letting customers visualize a purchase before they commit.

Retailers like Sephora and Warby Parker use augmented reality powered by AI so customers can see how makeup products or eyewear look on them without physically trying them on. Many furniture brands also offer virtual “try-ons” so consumers can visualize how specific pieces will look in their space. Adding virtual try-ons gives customers the online experience they crave.

How this boosts CX: AI-powered customer service tools allow shoppers to visualize products from the comfort of their homes, reducing the uncertainty of online shopping and increasing purchase confidence. This leads to fewer returns and higher customer satisfaction since customers can make more informed decisions. The interactive and personalized nature of these tools also makes shopping more engaging and enjoyable.

Use AI Powered Customer Service Tools to Enhance Customer Support

Invest in AI Chatbots

AI powered chatbots provide 24/7 customer service and empower customers to help themselves through self-service (which they want more of). You can add AI chatbots to your live chat or make them available via SMS. This lets customers get instant help without picking up the phone or waiting on hold. With chatbots, customers can look up orders, find product information, and start returns without straining your service team.

How this boosts CX: AI chatbots help reduce wait times and improve customer support. By handling routine inquiries and tasks, chatbots help customers reach faster resolutions, boosting customer satisfaction. Plus, with simple inquiries handled by bots, agents are free to help customers with more complex issues. So, when a customer needs help from a human agent, there’s a greater likelihood they’ll reach one.

Ramp up your self-service with virtual agents. Learn how they work in our blog post.

Add AI Powered Checkouts

AI technologies let customers skip traditional checkout lines for a faster, more streamlined experience. You can use it during online checkouts to craft personalized payment plans and automate the checkout process. AI is even being added to physical stores, enabling customers to purchase without human interaction.

For example, Sam’s Club, which requires an associate to check customer purchases before leaving the store, recently added a combination of AI and computer vision to identify items in shopping carts. Then, AI can confirm customers have paid for their items, speeding up the process.

How this boosts CX: As many as 82% of consumers say they avoid going to a business with a line. AI tools make completing purchases faster and more convenient by minimizing wait times and streamlining the shopping process. This reduces the frustration of long lines and slow service, leading to a more positive shopping experience.

Check out our blog for more ways to streamline your service with AI.

Include Voice Assistants

AI-driven voice assistants (IVAs) allow customers to use voice commands in an IVR. This can help customers find products, place orders, and get answers to their questions. The best part? Customers don’t have to navigate complex menus or type their queries. Voice assistants can even offer personalized recommendations based on past interactions and preferences, enhancing the shopping experience.

How this boosts CX: IVAs make shopping and customer service intuitive and efficient, improving FCR while also reducing call volumes. They also ease the frustration of sitting on hold and navigating an annoying IVR menu, resulting in a far more engaging and enjoyable customer experience. By making interactions simpler and more natural, IVAs help build stronger customer relationships and increase satisfaction.