Artificial Intelligence is by no means a new innovation, but as ChatGPT continues to take the world by storm, it’s brought AI and its potential for businesses into greater focus. While it has captured the public’s imagination for its ability to carry out any task – such as completing a homework assignment or writing a dating profile – in seconds, that can overshadow AI’s potential to drive significant cost- and time-savings for businesses.

But what is AI? What is sentiment and adoption among SMBs? And how can your retail business use it to improve customer experience?

What is AI?

In its simplest terms, AI is technology’s ability to perform a task that a human would typically carry out. AI analyses vast quantities of data, in context, and learns from experience to perform tasks. For example, AI can not only craft an essay, but if prompted correctly, could do so from the perspective of an academic or a 14-year-old high school student.

Many consumers have become aware of AI due to ChatGPT, but if you’ve listened to curated playlists or shopped for personalised products on Spotify or Amazon, you’re already feeling the benefits of AI, and its ability to analyse our habits and preferences and provide better experiences.

How are SMBs using it?

You don’t need to be a global giant with deep pockets and deep expertise to use AI in your business, though. In fact, Zoho research found that Aussie SMBs have a growing interest in adopting AI to reduce costs, improve productivity and make data-driven decisions. Over half (53%) say they’re adapting well to evolving technologies, while 43% are using AI for tasks like brainstorming ideas, language translation, summarising documents, research, and creating personalised communications.

However, there are ethical considerations like privacy, manipulation and the threat to jobs. The research also found that 75% expect their jobs to be impacted due to more intelligent AI, while 46% believe AI will perform part of their roles within the next five years.

For all the justified excitement about AI’s potential, it must be carefully managed, and deployed primarily on repetitive, administrative, time-consuming tasks. While robot retail workers might sound cool, retail is about human connection and meaningful experiences. With AI driving efficiency behind the scenes, it enables your business to spend more time enhancing those human connections.

Here are a few ways you can improve your customer experience through AI.

Personalised recommendations

Generative AI can recommend products to your shoppers based on their purchases or browsing history. For example, if you’re an ecommerce or omnichannel retailer, you can suggest products they might like, based on previous products they’ve purchased, viewed or added to their cart. This helps improve customer experience and boost revenue, loyalty and retention.

Customer service

Often, if a website visitor can’t easily find what they’re looking for, they’ll visit a competitor’s site. AI can be used to create chatbots that answer customer questions and provide support 24/7. For example, you could use it to automate answers to FAQs like your returns policy, shipping options or store opening hours. This can free up time to spend on, for example, catering to customers on your shop floor or developing new products and campaigns.

Content creation

AI can also create engaging and relevant content for customers. For example, personalised shopping carts based on information a customer inputs about themselves like: ‘searching for a classy, but affordable, wedding dress’. This creates a tailored experience that contemporary shoppers love. Additionally, AI can create blog posts, email marketing campaigns or social media content that keeps your shoppers connected, engaged and informed.

Customer engagement

AI can also automate the process of responding to customer reviews. Retailers receive many Google reviews, for example. Responding to them, whether good or bad, is essential for showing that their opinion matters and that you’re thankful for the positive feedback or eager to rectify negative reviews. Doing so manually can be time-consuming, however AI can provide suggested responses or templates, which you can send or refine.

Streamlining customer journey

AI can also assist in automating and streamlining customer service processes. It can analyse large amounts of customer data, identify patterns, and generate insights to improve service quality, identify potential issues and anticipate customer needs. For example, if you have a tedious checkout process, AI can identify where customers abandon their cart, and suggest appropriate improvements.

Running a retail business is challenging at the best of times, but through AI, it can be made infinitely easier. Retail always has, and always will be about human connections. AI will never – and should never – replace that, but when implemented strategically within a business, you can enable it to enhance those human connections, and drive time- and cost-savings in the process.

Vijay Sundaram is chief strategy officer at Zoho.