(Marketing Tech News) -- While AI technology continues to gain traction in retail, many consumers remain unconvinced of its benefits with 53% of respondents viewing the use of AI-driven personalisation as having no impact on their overall shopping experience, recent research by Zoho survey has revealed.
AI is increasingly being embraced by retailers, from the store floor to behind-the-scenes customer service using automated responses and chatbots. There is a general acceptance that shoppers are more likely to purchase items in-store or online from retailers that send them personalised offerings using AI tools. For example, brand giants such as Amazon attribute 35% of sales to its personalisation strategies in terms of product recommendations powered by algorithms.
Yet, when it comes to their shopping experiences, just 8% of respondents to the survey feel that AI personalisation has significantly enhanced only 29% say it has somewhat enhanced this. This lack of impact suggests that current AI implementations may not reach consumers’ needs or expectations.
73% of respondents to the Zoho survey prefer human insight over AI-based recommendations, with only 7% of respondents reporting they have full trust in AI-personalised recommendations.
While frustrations with AI in retail are relatively low, with 78% of respondents saying they have not experienced frustration, the 22% who have encountered difficulties indicate that challenges remain in creating seamless, user-friendly AI systems in retail.
When asked how important it is for a brand to provide human representatives for customer service over chatbots, 35% say it is essential and they wouldn’t trust a brand that only offers automated support or chatbots.
Overall, 62% of respondents reported their experience with sophisticated retail functions such as AI-driven product recommendations, self-checkout kiosks and chatbots as positive, as the technology enables a quicker and more efficient service.
9% of respondents reported having a negative experience with chat bots and automated customer service, with a common theme among the respondents that AI can be frustrating when the customer service is automated and the questions you have can’t be answered.
Sachin Agrawal, MD, Zoho UK comments: “AI has proven itself to be a useful business tool when used efficiently, but our data shows that the technology is falling short of consumer expectations for meaningful, tailored interactions in the retail sector.”
“As AI technology becomes more central in retail, businesses need to look beyond the technology hype and focus on what matters most, the customers. By mapping out customer touchpoints, assessing digital maturity and optimising areas where AI adds value, businesses can unlock it’s full potential. However, moderate expectations should be set and businesses should scale gradually to regularly evaluate if models need to be adjusted to deliver further ROI.”
“In the build-up to the Christmas period, brands have the opportunity to leverage AI in a way that streamlines shopping and elevates the customer experience. However, AI should be more than efficient. Its output should feel personal, respect consumers’ data privacy and complement human touchpoints. If consumers aren’t feeling the benefits, retailers should consider rethinking their approach to help make AI a trusted part of the retail experience.”
This research was conducted by Zoho Survey in the UK between October 7 and 12, 2024, leveraging a professional market research panel to ensure a diverse and representative sample of 500 respondents. Participants were screened and selected to encompass a wide demographic spectrum, including age, gender and regional diversity, to accurately capture the nuances of consumer sentiment and behaviour.
By Duncan MacRae
