According to Forrester’s 2023 US Consumer Experience Index, US brands struggled to deliver great customer experiences in 2023, leading the Customer Experience Index scores to drop for an unprecedented second year in a row. This begs the question – why?
Forrester states that great customer experiences are based on three criteria: ease, effectiveness, and emotion, and that “delivering easy and effective experiences was tougher for brands” in 2023. At the same time, technological innovation in the retail space has never been stronger. AI has been on the rise for years, with 2023 being a breakthrough year for artificial intelligence applications. So why, despite all of the recent advances in technology we’ve seen, are retailers struggling to stay ahead of the curve and deliver emotionally satisfying customer experiences?
The Current eCommerce Landscape is Tough
So far, in 2023, retailers have faced numerous challenges in delivering the “easy and effective” experiences that consumers are looking for.
While retail eCommerce sales reached an astounding $1 trillion in 2022, they are slowing down in 2023 after years of strong growth. A significant hurdle is inflation, which is affecting consumer spending, as well as retailer’s bottom lines – most sales growth for this year is attributed to inflation rather than increased consumer spending.
As customers cut back and become more value sensitive, retailers start competing on price. Endless promotions, fierce competition, higher shipping costs and higher online returns all take a toll on profitability. Meanwhile, behind the scenes, retailers are still feeling the impacts of the Great Resignation, and have to do more with less as they navigate a continuing talent shortage.
Any of these factors alone would be enough to explain why eCommerce companies are struggling to provide easy and effective online customer experiences. However, there is one key factor that most retailers have not accounted for: customer expectations themselves.
Consumer expectations are constantly evolving, driven by experiences in various aspects of life. When technology changes, consumer expectations change along with it. It doesn’t matter if the change is in banking or insurance or from a company like Uber – consumers use and experience technological innovations elsewhere every day. And these changes shift their expectations of what a digital experience should be.
The unfortunate reality is that, while consumer expectations are constantly evolving, many retailers and brands are doing what they have been doing for years. They’re leveraging the same tools and technologies which previously brought them success – except they’re not working anymore. These tools have become outdated and the customer experiences they create lag behind expectations, keeping retailers stuck in the land of mediocre and pedestrian.
As such, it’s not surprising that retailers are now missing the mark on customer experience. Customer experiences have evolved to the point where doing what retailers have always done simply isn’t enough to provide the slick, seamless experiences they encounter in other corners of the internet. And those experiences are the new baseline. When the market changes and you do not adapt, you’re going to miss the mark or be left behind.
Fortunately for retailers, hitting that mark and getting ahead is relatively easy: invest in new technologies that deliver experiences which match your customers’ expectations. Specifically, you need to be leveraging AI-first eCommerce search and product discovery.
Artificial intelligence and machine learning have been around for years. ChatGPT’s emergence and recent popularity has ignited a fire under business leaders to really investigate the applications of AI to help them bridge the gap between consumer and retailer.
Behind the scenes, AI helps organizations run more efficiently and more effectively, assisting knowledge workers with tasks like data processing and analysis. AI can process more vast amounts of data far faster than humans ever could, and can detect and find patterns that humans are not able to see. And when we apply AI to search, retailers see incredible improvements in customer experience and revenue.
In terms of customer experience, an AI-first product discovery platform, like GroupBy’s eCommerce Search and Product Discovery platform powered by Google Cloud Vertex AI Search for Retail, is capable of providing Google-quality search results. The AI possesses a superior understanding of user intent, which allows it to automatically sort search results for relevance, buyability, and personalization, while displaying them in revenue-maximizing order.
On the back-end, next-generation eCommerce search and product discovery technology dramatically reduces the need for search rules, taking enterprise eCommerce retailers from thousands of rules to just a handful – and most often only one or two.
Merchandising teams spend as much as 60% of their time curating search results and managing search rules. By almost completely eliminating search rules, AI allows merchandisers to redirect their attention to revenue-generating activities, while delivering superior search results that are relevant, buyable, personalized and optimized for revenue.
Google has been one of the key players shaping consumer expectations around digital experiences for decades now, and selecting an AI-first eCommerce search and product discovery platform that can deliver Google-quality search results is an easy way to close the gap between consumer expectations and your digital shopping experience.
At the end of the day, AI is here to increase the productivity and efficiency of the employees retailers already have. These tools do still require human oversight, but they can handle specific tasks far more efficiently and effectively than humans ever could – while delivering better outputs than their human counterparts are capable of.
But the fact of the matter is that AI is here and AI is now. AI technology is not something retailers should be waiting to jump on in a few years – as the Customer Experience Index shows, retailers are already falling behind. Adopting AI technologies should be a right-now priority in order to stay competitive and close the increasingly wide gap between consumers and retailers.
Want to hear more about how AI can help you improve customer experience, boost revenue and close the gap? Register now for our upcoming panel discussion 6 Key eCommerce Strategies To Help You Bridge The Gap Between Consumer and Merchant. Featuring Forrester VP and Principal Analyst, Brendan Witcher, and GroupBy’s Director of Product, Arv Natarjan, the discussion will dive further into the applications of AI-first technologies as well as look at strategies to improve customer experiences, deliver value and generate predictable revenue.
