House of Lords: How AI will Revolutionise Retail Customer Experience

• Sabio Group’s CINO, Stuart Dorman, joined leading retailers and grocers to discuss the potential of AI – with a particular focus on Generative AI 
• The event saw leading minds from the likes of the Retail Trust, Ralph Lauren, Estee Lauder, Starbucks, Burberry, Marks and Spencer and Lidl debating current challenges and opportunities in the industry 
• Nutun CX, the Durban-based contact centre BPO, joined other renowned South African CX thought leaders to discuss the nation’s credentials as an outsource location for brands 
• Delegates also covered the importance of actionable ESG and Wellbeing initiatives as competitive differentiators 

The retail sector is undergoing a seismic shift. Artificial intelligence will – and is -transforming customer experience and will help to turn shoppers into loyal brand enthusiasts. 

This was the key takeaway from a recent House of Lords thought leadership breakfast I attended, organised by ourselves at Sabio Group alongside Nutun CX, the Durban-based contact centre BPO, and the Retail Trust, the UK-based charity supporting the industry.  

The briefing united other luminaries from across the industry, with senior leaders from the likes of Ralph Lauren, Estee Lauder, Starbucks, Burberry, Marks and Spencer and Lidl – amongst others - discussing the current and potential impact of artificial intelligence, and specifically Generative AI, on their operations. 

AI is Set to Revolutionise Retail Customer Experience 

The integration of AI with customer service channels is elevating satisfaction, noted Stuart Dorman, Sabio’s Chief Innovation Officer. With conversational AI like chatbots and voice assistants now answering queries, the technology provides instant, personalised support. 

In terms of current generative AI use cases, the technology can allow bespoke responses crafted in real-time, unlike pre-programmed chatbots. Stuart’s insights during the morning discussion predicted AIs ubiquity in customer service within five years – with ourselves at Sabio expecting all brands to have implemented generative AI capability in some shape or form in that timeframe. Generative AI will become an omnipresent CX tool that will also enable proactive engagement, for example contacting customers about new products, resolving issues pre-emptively.  

By analysing data, AI will not only optimise customer service but other operations, such as marketing, too. Messages will be tailored to individuals based on preferences and behaviours, all gleaned from analytics – with promotions arriving just as customers need them.  

The result? Meaningful, brilliant and memorable connections and experiences that will convert shoppers to loyal advocates for a brand. 

Retail's Challenging Landscape and AI's Redemptive Power 

However, amidst the benefits of this emerging tech, the sector does face considerable difficulties and to look at the future, one must first understand the present. Chris Brook-Carter, CEO of the Retail Trust, painted a sobering picture of the retail sector based on their recent study. 

The Trust fielded over 300,000 support calls last year - 60% of which were from frontline retail workers, a third of whom wanted to leave the industry. Arguably even more worrying was the findings – which emerged from a Retail Trust study – that a quarter of line managers also intend to quit. 

Burnout and overwork are chief culprits, exacerbated since the pandemic. With rampant abuse (9 out of 10 people in the industry said they experienced some sort of abuse) and anxiety about cost of living, job security etc, retail ranks among the unhappiest of sectors. Annual losses to UK plc from mental health issues alone total £28 billion, while the figure for presenteeism – showing up to work while not your true self - stands at £10bn. 

Technology, though, such as AI, can dramatically improve these issues. AI chatbots alleviate strain on human agents by resolving routine inquiries and then there’s the capability to integrate wellbeing services, such as our own Wellbeing Programme and associated Companion technology, into contact centre and customer service operations. This can help monitor advisor wellbeing and connect workers to vital support. 

South Africa Emerging as Top Retail BPO Hub 

To bolster customer experience while controlling costs, UK retailers are increasingly turning to South Africa for offshore support operations. With its strong infrastructure, educated talent pool, and cultural affinities, the country provides unique advantages. 

Industry pioneer Rod Jones and Nutun's David Neale discussed South Africa's attractiveness. With wages across the board lower than in Europe, outsourcing can cut expenses substantially, they said, while the 1-hour time difference also enables 24/7 coverage with well-managed handovers. 

With English as an official language, South African agents can offer seamless customer interactions. “Shared values around etiquette and conflict resolution ensure positive experiences underpinned by empathy,” said Neale. He added: “These cultural similarities make South Africa a top choice for outsourcing.” 

ESG And Wellbeing; Are They Now Competitive Differentiators? 

The importance of ESG (Environmental, Social and Governance) and Wellbeing also emerged as strong discussion points, with attendees emphasising and collectively agreeing that operations must uphold robust ESG and wellbeing standards. With growing scrutiny of supply chains, ethical business practices are now competitive differentiators, while the mental health of employees is paramount to the success of any business. 

As Alistair Niederer explained, providing good working conditions and mental health support elevates brand reputation. This cements partnerships, attracts talent, and resonates with socially conscious consumers. Collaboration is also key to tackling sector-wide issues. By working with innovative providers like Nutun and Sabio, retailers can embed social responsibility, for example through initiatives in the form of Nutun’s One Agent; One Child programme (which focuses on providing education to underprivileged children in South Africa) as well as Sabio’s Wellbeing Companion technology. This can help to boost customer lifetime value through technology and ESG-related initiatives. 

Retail's Resilient Future 

The discussion, while rooted in the present challenges of the retail sector, was resoundingly optimistic about the transformative potential of AI. The thought-provoking debates at the House of Lords served as a reminder that technology, when used thoughtfully and in the right way, can be a catalyst for positive change. 

A special note of gratitude to everyone across the diverse retail spectrum who attended, from Ralph Lauren, The Bodyshop, Burberry, Starbucks, Marks and Spencer, Gap, Lidl, TJX Europe, Milk & More, Money Corp and Salesforce – it really was great to get some tier one insights from across grocery to fashion and hospitality. 

As the retail industry gears up for the upcoming peak trading season, the promise of AI-driven solutions, outsourced South African BPO options such as Nutun and an ESG-focused approach holds the key to not just surviving but thriving in the new era of retail. 

For an in-depth exploration of the retail sector's health, you can check out the comprehensive 'Health of Retail Report 2023' by Retail Trust here.