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Why artificial intelligence remains a smart investment for many online retailers

Last updated: 05-02-2021

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Why artificial intelligence remains a smart investment for many online retailers

Panasonic Corp. sells its products globally, which means its European headquarters fields customer service requests from customers who speak many languages, says Bruce Swan, European customer care general manager.

The consumer brand manufacturer sells a variety of products—such as headphones, stereos and cameras, as well as home goods and kitchen appliances.

Panasonic’s customer service team, which helps customers set up products and answers questions about product features and functionalities, found it challenging to keep up with all the tickets in several different languages, particularly from those in Dutch and Nordic-speaking countries. Customer service agents struggled to translate emails quickly while also crafting helpful responses in the same language. Because of this, Panasonic answered only about 50% of customer service emails received in a 24-hour period, says Swan, without revealing the number of requests.

The electronics retailer recognized it needed help answering customer emails promptly in summer 2019. It tapped artificial intelligence language vendor Unbabel to help its customer service team better assist customers who didn’t speak English. Using AI has helped the team dramatically, leading staff to answer all customer service emails within 24 hours, up from 50% before employing the vendor. Plus, it also raised its customer satisfaction score after implementing the translation technology.

Panasonic is among several merchants investing more in artificial intelligence, especially as the COVID-19 pandemic forced many consumers to shop online while stores were shuttered. In fact, 35% of retailers plan to invest more in artificial intelligence for their ecommerce operations this year, according to a Digital Commerce 360 performance and conversion survey of 103 merchants conducted in January/February 2021. And 21% say artificial intelligence is a critical ecommerce investment for 2021.

Artificial intelligence is a technology that enables a machine to simulate human behavior. Machine learning is a subset of AI in which a machine, or the technology, automatically learns from past data without being programmed to do so.

“[Retailers] are starting to understand some of the business use cases that are going to drive [AI] adoption,” said Brian Kilcourse, managing partner for retail market intelligence firm RSR Research. “They’ve probably been using some AI in the past without realizing that they’re doing it.” For example, he says many retailers are likely using AI through their personalization vendors or programs, he says.

Whether it’s a brand-new ecommerce startup or a longstanding retail chain, retailers are investing in these technologies and many are reaping benefits. For example, the IDC (International Data Corporation) forecasts that spending on AI technologies across industries will grow to $97.9 billion in 2023, which is more than two-and-a-half times what was spent on AI in 2019. Some retailers use AI to better understand customers, while others are using it to enhance their website and the overall customer experience.

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