Beyond conversational chatbots: Why Indian retailers need AI Agents to improve CX

By Raj K Gopalakrishnan

India is the world’s fifth-largest retail market, contributing to over 10% of the country’s GDP. Over the last four years, the retail landscape witnessed unprecedented changes. Growing disposable incomes and changing demographics, have changed customer expectations of retailers too. Digital customer experience is front and central to this change.

In India, 77% of businesses say customer expectations for effectively engaging with them digitally have increased over the past 12 months. Customers are clear on their expectations too — 53% of them under the age of 45 years expect brands to offer them AI-powered digital experiences. Customer perception of AI is changing and 60% of them are excited about AI and are eager to witness its full potential. Retailers in India aren’t lagging behind and many have adopted generative AI-powered conversational chatbots to deliver omnichannel customer support. But the buck stops there because generative AI is only as good as the data it is built on and often these chatbots are prone to hallucinations and inaccuracies, which can have an adverse impact on customer retention. A majority (69%) of Indians would stop doing business with a brand after one bad experience.

There’s light at the end of the tunnel. AI Agents that can understand human intent, perform real-world tasks and work intuitively across various retail functions are a great alternative to conversational AI as it can do so much more. Here’s how AI Agents go beyond conversational AI to help businesses do more with less.

AI Agents for day-to-day operations

Retailers often struggle with managing day-to-day operations while also trying to focus on growing their business. AI Agents can be invaluable to these processes and perform a variety of tasks that ensure operations aren’t adversely affected. One of the most significant advantages is that AI Agents can perform day-to-day operations by handling administrative tasks. These may include scheduling appointments, inventory management, understanding customer expectations and preparing reports or documents. By delegating these time-consuming tasks to VAs, retailers can have employees dedicate their time to more meaningful work of innovation and developing strategies that can enhance digital experience, which impacts their bottom line directly.

Improving the quality of customer service

With the rise in e-commerce, customer support, across multiple channels like phone, email and social media has become crucial for retail businesses to thrive. AI Agents can play a pivotal role by providing excellent customer service, regardless of phone, email or social media. Unlike conversational bots that have limited chat functions, AI Agents can perform tasks intuitively as they understand human intent. Additionally, AI Agents can replicate the brand voice, and respond to customer issues quickly and intuitively. This ensures customers have timely and efficient support, leading to increased satisfaction and loyalty.

AI Agents operate round the clock and can attend to customer needs at any time of the day. As a result, retailers can offer 24/7 support, while human agents can focus on solving more complex customer issues. In addition, AI Agents bring in a personal touch that conversational AI lacks. They are equipped with problem-solving skills that enable them to understand customer intent and sentiment. They are skilled at tackling frustrated customers calmly, and finding quick solutions that solve the issue and enhance the experience.

They can manage online reviews and customer feedback, monitor review sites and respond quickly to positive and negative comments. This not only improves your brand’s reputation but also shows potential new customers that you value their opinions, thereby improving the experience.

Smart inventory management for smarter CX

One of the best use cases of AI Agents is inventory management. For retailers, this is the holy grail as customers who can’t find products at one retail outlet — be it online or offline — will turn to competitors. AI Agents track inventory levels, place orders when necessary, and even handle stock returns or exchanges. With accurate inventory management in place, retailers can avoid understocking or overstocking issues which could lead to lost sales or unnecessary expenses and frustrated customers.

Personalisation at scale

One of the most important customer demands today is personalised experiences. In fact, 62% of consumers expect hyper personalisation, saying that a brand will lose their loyalty if their experience is not personalized — meanwhile, 49% will become repeat buyers if personalisation is offered. Marketing is crucial for any business’s growth but requires constant effort and attention. Virtual assistants can aid with tracking customer history, past conversations and preferences to curate personalised experiences — be it for support, marketing or sales. AI Agents can also perform market research, engage customers on social media, chalk up email marketing campaigns, and other promotional activities that offer customers personalised experiences.

Balancing human-automation strategy

While AI Agents are invaluable in streamlining repetitive and mundane tasks, AI is not meant to replace humans but to aid them in being more productive. Given the growing number of technologies in use in the modern digital enterprise, every minute spent managing digital debt is a minute not spent on creative work. In fact, 76% of Indian workers say they don’t have enough time and energy to get their work done, and those people are 3.1x more likely to say they struggled with being innovative. AI Agents can be great in improving productivity as they can take on repetitive tasks, while humans can focus on innovation.

It’s true that AI can help human teams work at a superhuman scale but only if it is thoughtfully applied in the areas where automation makes a huge difference. Retailers must let AI tackle the easy, repetitive tasks, free up employees time to work on more difficult issues, and enable a higher level of personalised service for every customer engagement.