Zendesk CTO Adrian McDermott discusses the role of AI, conversation and personalization in CX for brands and retailers.
Brands’ primary goal is to sell products, but that’s not the only way they differentiate themselves.
The experience a consumer has with a brand can be just as important when it comes to standing out and influencing the decision to buy, especially when people have to choose between similar products. That experience can also have a big role in determining whether people will buy from a brand again, helping the brand to live beyond an individual product’s consumption in a consumer's mind.
As commerce becomes more digital, the experiences that can be offered to consumers is evolving rapidly. Digital channels for selling and marketing are only expanding, and the way a customer experiences a brand matters at each point. Meanwhile, technology is advancing to create new ways of communicating with customers and serving them that feel less rigid, and fit into their lives. According to customer experience-focused software company Zendesk’s 2023 CX Trends Report, 61% of customers are excited about experiences that are natural, convenient and fluid.
Within brands and retailers, Zendesk said it’s all pushing toward two trends: A bigger role for CX, or customer experience, and more investment in creating immersive experiences for consumers.
At the NRF Big Show 2023, The Current spoke with Zendesk CTO Adrian McDermott about three components of immersive CX that were highlighted in the report. Here’s a look:
Given all of the attention and wonder that was inspired by the release of generative tools such as the chatbot ChatGPT and image-generating DALL-E-2, AI is at or near the top of any conversation about technology to start 2023.
While AI is not new, the outpouring underscores how quickly AI is evolving, and the readiness of consumers to use it. In ecommerce, AI is familiar in the form of chatbots. They are often deployed in customer service to triage and answer questions. Business leaders have harnessed the technology for years, and see it advancing, as well. According to Zendesk’s survey, about three-in-five leaders say AI and bots have become more natural and human-like, while also improving performance. Looking ahead, 57% of leaders expect AI and bots to replace some human agents in the next few years.
But even as the ability to harness tools like large language models to perform human-like tasks gains promise, it must be adopted and become part of an organization’s operations before it can reach customers. According to Zendesk, 64% of leaders say they believe their organization is lagging in the use of AI and bots, even as the same percentage say expansion is an important priority.
At the same time, consumers are gaining higher expectations of AI. When it works, there is recognition that it can be a tool to improve their lives. The arrival of new features like ChatGPT serves to highlight not just how quickly the technology is advancing, but also how AI is capable of more as it gets better.
This means they will look to the places where they interact with AI to do more. Chatbots currently triage and answer questions. Could they also provide something that consumers weren’t considering when they started a chat?
“People are looking for high quality, AI-based interactions, and accepting of those. So the shift is from, this is a way for me to save money, to, this is a way for me to innovate on experience,” McDermott said.
For the companies building technology and the brands and retailers using it, the question is: What will you build with it next?
Text messages. Chats. Voice commands. Messaging is becoming the center of our digital lives.
“Whether it's Facebook Messenger, it's embedded messaging in your application, it's WhatsApp or it’s Google Business messaging, the messaging window has become the new browser window,” McDermott said.
Those can quickly become places of business, as well. While chatbots are already familiar, these spaces are not just for customer service. In messages, retailers could add product carousels, coupons or delivery tracking. These are some of the uses of Zendesk Sunshine, which is a product that normalizes the APIs of different messaging platforms into a software development kit that brands can use to create experiences for customers.
Yet not all businesses are built for this shift at this time. According to Zendesk’s survey, about half of leaders said their agents are able to access conversations and respond across all support channels in one place. Additionally, 61% said they are not built for conversational experiences at this time.
But there is interest. About two-thirds of leaders surveyed are rethinking the entire customer journey to build a more fluid experience that is available to assist a customer “in any way they need at any time,” Zendesk said.
Meeting customers where they are is always a good bet. More and more, they’re messaging, and they’re willing to carry out more of their lives in the chat. Brands can provide the tools to do so.
Increasingly, the convergence of data, conversations and machine learning tools that help to match preferences with customers are enabling shopping experiences to be more tailored to the individual.
That’s the promise of personalization, and business leaders see how it can drive growth. According to Zendesk’s survey, 77% of leaders say personalization increases customer retention, while 59% say it reduces customer acquisition costs.
The data that in part powers personalization plays a unique role in commerce. Customers provide key data like their address and size to make a purchase. That’s purely for utility. But they also want better experiences. The data can be harnessed to provide them.
Instead of tracking numbers and rote lists of options, brands can leverage personalization tools to use real names in communication and provide recommendations for products.
The access methods may change. With the decentralization offered by web3, identity data may be stored in a digital wallet, and order data may only be available for a few weeks via an ephemeral key. Looking out ahead, McDermott sees “consumers controlling both what you could know about them, and how long you can know it.”
But the insights that are gleaned from the data in aggregate can live on, with consumers benefiting from experiences that are made for them. With further development and investment, they will only continue to grow better over time.
Ask Instacart answers prompts with personalized recommendations.
A pair of recent launches from Instacart highlight how the grocery ecommerce company is integrating two of the key emerging areas of technology into its offerings: Generative AI and marketplaces.
Let’s take a look:
Instacart is seeking to harness generative AI to create a more personalized shopping experience.
A new tool called Ask Instacart that is launching this week is designed to allow customers to type in questions about specific recipes or general recommendations for an occasion. Embedded in the search bar, Ask Instacart also provides personalized questions to be asked by customers. In addition to specific items, it provides information about food preparation, product attributes and dietary considerations.
For those eying how generative AI will play a role in the shopping experience, Ask Instacart shows how search can be transformed into a place for discovery. Instacart is aiming to provide answers to the more open-ended questions that people would naturally ask, not just simply provide info in response to a question that has one answer. It shared the following sample prompts:
The tool is also showing the way for generative AI to integrate with retail media. Ask Instacart is designed to integrate with a brand's sponsored products campaign, so that the answers to questions that match consumer needs can also provide a way for brands to stand out.
To create the tool, Instacart combined the language understanding of ChatGPT with its own AI models. It added in catalog data from 80,000 retail partner locations around the country, which together have more than one billion shoppable items.
Beyond mission: Ecommerce marketplaces have honed a shopping experience where it’s easy to find what you’re looking for. But if shoppers want to happen upon something they didn’t know they needed, social media or the store is still the best place to visit. Instacart is showing how generative AI can make discovery a marketplace function. It also signals that advertising will come to generative AI by way of retail media. Going forward, the growth of discovery could make retail media more valuable as a tool for advertising that raises brand awareness, not just lower-funnel conversions.
Instacart will power a new virtual convenience store for the grocery chain Aldi.
Aldi Express will feature 2,000 of the most-shopped Aldi items, ranging from prepared food and snacks to grocery staples.
Drawing on 2,100 Aldi locations around the country, items will be delivered as fast as 30 minutes, the companies said.
“Through ALDI Express, we’re making shopping more convenient so you can satisfy a craving or get a missing ingredient in minutes,” said Scott Patton, VP of National Buying at ALDI, in a statement. “Together with Instacart, we’ll continue to find ways to innovate and make the online grocery experience even more effortless and accessible.”
Aldi began offering delivery via Instacart in 2017, and has since expanded services to include pickup as well as alcohol delivery.
Aldi’s marketplace moment? While Aldi previously offered delivery, making the assortment available through a virtual store offers the opportunity to create a marketplace for its goods. With the virtual store, it will more closely resemble DoorDash and Uber Eats, which have been expanding their grocery assortment. With a marketplace, additional revenue opportunities could open up for the grocer, such as advertising through retail media.
