Generative AI is Reshaping the World of Customer Experience

Today’s customers have higher expectations than ever. And no technology has highlighted the need for organisations to stay agile and be proactive than the rise of generative AI (Gen AI).

In a world where customers can easily switch to a competitor – with research from Zendesk showing that 52% of customers will switch to a competitor after a single unsatisfactory customer experience – companies that fail to take action to meet new, higher expectations face losing out.

To help meet these expectations utilising Gen AI is a valuable tool: enabling unique and personalised experiences and recommendations for customers.

“Gen AI is increasingly being used to deliver human-like, emotionally engaging, empathetic, and personalised customer and colleague experiences, delivered in a way that represents the values and personality of a brand,” describes Marty Herbert, Director, Head of Experience Transformation at KPMG UK.

How Gen AI is reshaping customer experience

Research by Google Cloud has revealed that 97% of retail decision makers believe that Gen AI will have an impact on customer experience. As explained by Alex Rutter, Managing Director AI GTM, EMEA at Google Cloud, for retailers that are already utilising AI, the technology has redefined how they understand, and engage with customers. 

“Synergistic advancements in data analysis and chatbot innovation have seen Gen AI elevate customer experience in two key areas: personalisation and automation,” he explains.

“On a customer-facing level, Gen AI can unlock personalised shopping through AI-powered virtual agents. By answering customer queries with data-backed recommendations, chatbot agents can take the load off retail contact centres, ensuring customers receive seamless and efficient service. 

“We are already seeing AI take flight in the business world and creating meaningful customer experiences. Google Cloud partners are among those leading the charge, and reaping the benefits of this transformative technology. Victoria’s Secret, for example, has launched an AI-powered search feature that leverages Google Cloud’s Vision API Product Search to locate specific products in the Victoria’s Secret catalogue. Customers can use this tool by simply dropping an image into the website’s search bar.”

According to Jim Rudall, Head of EMEA at Intuit Mailchimp, personalisation is key for organisations looking to enhance customer experiences.

“In order to set themselves up for success, businesses must prioritise customer experience through personalisation. Understanding an audience is the crucial first step to this - and we know that 73% of customers feel more valued when they receive personalised emails. The next step is to use AI-powered tools to scale up customer communications. Such tools will massively augment the existing capabilities of businesses to engage at scale, raising the bar for what activities can be completed quickly whilst driving down the cost of marketing processes and improving ROI.”

Navigating challenges and ethical considerations

Gen AI solutions and offerings are reshaping operational, functional and strategic landscapes across industries, but when it comes to ethics, Herbert explains that CEOs and leaders are struggling to know what to do and where to start. 

“Before organisations begin, they must develop a trusted, responsible AI framework and put in place an ‘AI Centre of Excellence’ to act as air traffic control for any future experiments.” This responsible AI framework, Herbert says, must cover things like ensuring that models are fair and unbiased, that they are transparent and can be explained, and that there is adequate corporate governance and accountability over data and its use.

“This means thinking through how to safeguard consumers' data against unauthorised access, maintain the privacy of consumers’ personal details, and ensure that AI systems don’t have a negative impact on humans, property and the environment.”

Michael Conway, Partner and AI Transformation Leader, IBM Consulting UK & Ireland, explains that while businesses acknowledge the need to balance innovation and trust, many are struggling with it. 

“IBM research found that 80% of business leaders see explainability, ethics, bias, or trust as a major concern on the road to Gen AI adoption,” he comments. 

“Leaders need to begin by building their GenAI applications on a solid foundation, using trusted, governed data and transparent, explainable AI models. At IBM we’ve built a governance layer into our watsonx AI and data platform for enterprises, so they can leverage Gen AI with confidence that they’re going to comply with ethical standards and other policies.”

Consumers want meaningful and personalised experiences, but Rudall explains that it is important to balance this with privacy. “Ultimately, personalisation isn't possible without data, but companies must ensure it's handled responsibly and used only in ways that customers approve,” he says. “In a recent study of UK and US-based consumers, we found that nearly 3 in 4 customers are comfortable with companies using their personal data if they are transparent with how they are using it - and ultimately deliver a rewarding experience through impactful, personalised messaging.”

Gen AI to drive the evolution of CX

Going forward, Rudall predicts that customers are going to expect far more personalisation in how brands are communicating with them. “The future of email marketing and customer experience is evolving to be hyper-personalised. AI is accelerating new methods for marketers to connect to their customers, and it will help them tailor their communications for better engagement and impact. This allows teams to focus human creativity towards the ‘why’ and ‘what’ of communication, whilst AI handles the ‘how’.”

According to Conway, hyper-personalised journeys created by Gen AI promise to totally transform how companies connect with customers and employees. 

“Using true 360-degree customer data from across sales, marketing, and service functions, it can tailor experiences and determine the “next best action” that will help a company engage a specific customer,” he says.

“For example, a financial services company could use Gen AI to rapidly analyse their own customer data—as well as data from social sources and partner organisations—to determine which customers are most likely to take various actions, from opening a new checking account to investing assets to applying for a loan. Gen AI can then help bankers achieve true one-to-one marketing with a personalised strategy and automated, point-in-time customised offers, translated into the customer’s preferred language.”

With research showing that 73% of customers worldwide expect brands to understand their unique needs and expectations, Rutter also advocates a 360-degree approach to customer service, which starts with a strong foundation of customer insight. 

“A data-driven approach to retail management helps brands better understand trend forecasts and custom journeys, ensuring that the shopping experience is catered to each customer and their unique needs,” he says.

“Gen AI is the first technology to truly integrate front line service with internal data processing, resulting in retail systems that are engineered for memorable customer engagement. Soon, AI-powered retail will become the industry standard, meaning that businesses who rely on outdated customer service models risk being left behind. Matching customer expectations with innovative retail solutions, Gen AI is adding a whole new dimension to customer-brand relationships.”

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