3 Reasons Smart Retailers Are Shifting Customer Care Investment from More Agents to AI

Customer experience excellence is how brands differentiate themselves in a crowded retail landscape. Our research shows that many of them are currently trying to spend their way to CX success—55 percent of retail executives surveyed report that their customer care costs are increasing and over half of those execs say investment in additional human resources is the bulk of that spending.

While adding more (trained) warm bodies to the payroll may seem like a logical fix to deliver better service to a greater number of customers, this approach to striving for customer experience excellence is shortsighted at best. To truly succeed in customer care, brands will need a strong combination of automated customer care and customer care representatives. Here’s why:

1. Personalized Customer Care Doesn't Actually Always Require People

When you think of a truly outstanding shopping experience, having your needs anticipated and met immediately is pretty high up the list of what makes it great. With the advent of artificial intelligence (AI) trained for specific retail use-cases, this level of intuition and personalization doesn’t require a customer care agent or a clerk able to read your mind. In fact, a chatbot’s ability to pull data in real time from each customer’s profile to inform and personalize every interaction actually makes it a better concierge than most well-trained, attentive agents.

2. Human-Staffed Customer Care Functions Don’t Scale Without Breaking the Bank

There are only so many calls, chats, or emails a given customer care rep can handle in a single shift, no matter how efficient they are or how streamlined a brand’s first-contact resolution process is. And there is an obvious ceiling to how much a given retailer can expand its human customer care workforce before the associated overhead costs become untenable; this is the case for even the most high-margin brands. Human resources just can’t scale quickly or widely enough to match growing customer expectations.

3. The Shift Away from Labor-Intensive Forms of Customer Care Is Already Starting

A survey of leading customer care executives conducted by McKinsey uncovered that 40 percent expected inbound customer care call volume to drop significantly over the next decade, possibly even to zero. Therefore, investing in more agents as a means of leveling up your customer experience offering is, by these standards, a very short-term play at best.

So if brands can’t successfully hire their way to customer experience excellence, what can they do to outpace competitors? Our research provides a major clue.

The retail executives we surveyed predicted that digital automation in the form of AI solutions will become more relevant to their customer care efforts over the next 24 months. Sixty-five percent reported that website live chat is going to be one of the most important new channels to their business over the next two years. Additionally, 51 percent said the same of Facebook Messenger, and almost 25 percent identified various voice assistants (Alexa, Siri, Google Home) as poised to grow in importance.

On the one hand, retailers’ customer care costs are rising, with spending on hiring driving the increase. On the other, retailers are bullish about the ability of AI to power their customer care efforts in the coming years.

Smart Retailers Are Putting These Puzzle Pieces Together

They are both controlling customer care costs while accelerating their adoption of game-changing customer care automation solutions—they’re moving to the CX leading edge by shifting their investment away from expanding their team and toward AI, which can deliver personalized, consistent (and consistently high-quality) customer care—at scale—for a fraction of the cost of hiring and training new customer care agents. Over the next 24 months, as automation becomes a business norm, we expect to see a critical mass of retailers making the leap from hiring reps to implementing AI to stay competitive in the battle for wallet share and customer loyalty.

Bringing It All Together: Combining AI and Human Assistance

While AI-powered automated customer care brings a new competitive edge to retail organizations, that is not to say that person-to-person interactions will be going away anytime soon. There will continue to be customer requests that are best solved by a person. What will those interactions look like with the new technologies in place? The new era of customer care is a well-balanced relationship where human customer service goes hand-in-hand with chatbots and virtual assistants.

At this intersection of AI and human interaction, AI takes care of routine inquiries such as shipment tracking and purchase history, returns, re-ordering and common questions, while human customer care representatives are available to tackle inquiries that require a deeper level of detail and explanation for the consumer. A customer care platform integrates directly into the customer service platforms used by support teams, and the AI passes on extra information about the customer and their order history so an agent has full context of the customer’s issue and can respond accordingly. This combination allows retailers to reduce their costs, increase customer satisfaction through real-time customer care, and scale far more easily in peak times.

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Luke Starbuck is the vice president of marketing at Linc Global. Starbuck built his first e-commerce website in 1997 and has more recently focused on bringing software that improves customer experience and drives revenue to e-commerce retailers. He has led product, development, and customer service teams and brings his experience in print advertising and media to digital and offline marketing and growth. At Linc, his primary goal is to connect retailers with the knowledge and tools that drive stronger customer relationships and transform onetime purchasers into lifetime shoppers.