If there’s one thing business leaders know, it’s change—and retail is no exception. Customer expectations and the cost of meeting them are rising fast. To stay competitive while managing costs, retailers need to use tools that maximize ROI while prioritizing customer satisfaction.
That’s where AI comes in.
AI agents in retail offer businesses tangible ways to create personalized, efficient customer experiences that improve loyalty—while reducing overall costs.
Let’s dive into how AI agents for retail can help your business:
- Boost conversions
- Lower operating costs
- Create satisfying customer experiences that keeps them coming back
What’s the difference between generative AI and AI agents?
AI has become a very saturated market with a lot of tools to choose from. It can get overwhelming fast.
But, it’s important to acknowledge that not every tool is right for your business—and investing in the wrong ones can be more harmful than helpful to your goals. But, before we get granular about the tools, it’s important to distinguish between the different types of AI technology and what each can help you accomplish.
Generative AI
Generative AI creates things, like text, images, code, or audio. It takes a prompt (your input) and generates new content based on patterns it’s learned.
Generative AI can also be considered reactive, meaning that it will respond to your prompts but it won’t take initiative on its own.
It’s great for creative tasks like:
- Brainstorming ideas
- Generating visuals
- Summarizing content
- Analyzing large data sets
AI Agents
On the other hand, AI agents use multiple types of AI to make decisions and take action. The ideal AI agent uses both practical and generative AI to automate manual tasks, adapt to new information, and answer questions or requests.
In short, an AI agent acts like an independent assistant, while generative AI is more like a collaborator.
What are retail AI agents?
Retail AI agents are AI-powered tools or systems designed to assist in various retail operations. They’re designed to solve the retail industry’s biggest challenges, focusing on three key areas:
- Customer support
- Internal process automation
- System integrations
1. Customer support
To elevate the customer experience, AI agents for retail work 24/7 to offer instant customer support. Whether over chat, SMS, voice, email, or social, these AI agents can:
- Answer frequently asked questions within seconds
- Recommend products based on a customer’s behavior (like pages visited, what’s in their cart, or past purchases)
- Create or update customer records
With retail AI agents on hand to support customers when needed, retailers can free up customer support reps to tackle more complicated or sensitive tickets. This will reduce your ticket and call handling times (and drive up conversions!)
2. Process automation
Retail AI agents automate repetitive work on behalf of your team. Whether processing orders, handling exchanges or returns, or updating your CRM, retail AI agents can do it all independently.
By automating this repetitive work, you can shift your team’s focus to higher priority tasks that require human intervention.
3. System integrations
However, for process automation to work effectively, retail AI agents must integrate with multiple channels and with the tools and systems you already use.
Modern customers are on-the-go, and their support should be too—so AI agent technology like Capacity can help across any channel, including chat, SMS, voice, and email. Plus, agents must also be able to “talk to” the other tools you use to work, like Shopify, HubSpot, or Salesforce. That way, they can automatically update records, handle order inquiries, and even recommend products based on customer context.
So if you’ve been wondering, how can AI be used in retail? The short answer is: a lot.
5 Types of retail AI agents
Not all AI agents in retail are created equal. Some are designed for specific channels, like voice, or deal with one particular use case, like recommending products. It’s crucial to understand what the different types of retail AI agents can do, so that you can maximize your ROI from whatever tool you choose. So, what are the 5 types of agents in AI?
1. Chatbots and virtual assistants
With nearly half of consumers preferring to shop online, creating a satisfying and helpful online experience is crucial for retailers. In a store, a customer can ask a salesperson for help—but online, how can they get the answers they need?
Chatbots and virtual assistants are a great way to offer customers proactive assistance whenever they need it. Available 24/7, a retail chatbot can do things like:
- Promote new releases, sales, and offers to shoppers
- Answer questions about specific products, store locations, or policies
- Process purchases, exchanges, and returns independently
- Register shoppers for loyalty programs or newsletters
Over chat, AI can answer over 90% of customer inquiries automatically. This allows brands to focus their support staff on inquiries that really need human attention, reducing support expenses in the long run.
Ultimately, using retail CX automation, these chat agents offer instant, human-like online customer service that can represent the best of your brand.
2. Voice-enabled AI agents
Phone support is costly and complicated—but AI voice agents can help.
Retail AI voice agents use advanced AI to automate routine calls. Just like an online chatbot, voice intelligent virtual agents (IVAs) can:
- Answer FAQs
- Process purchases and returns
- Collect customer information for loyalty programs
Whether a customer needs information on their latest order or needs to find a store location, AI can offer natural-sounding, intuitive support. Voice IVAs like Capacity even offer support in 20+ languages, ensuring that every customer can get assistance.
When a call needs to be escalated, voice IVAs can intelligently route to the best available agent, while providing that agent all the context they need to help the caller for faster resolution.
Plus, using quality assurance tools, AI can analyze call performance. It can identify sentiment and intent to pinpoint areas for improvement, further train agents, and ultimately optimize call handling.
Retailers who use AI voice agents that offer both automation and call analysis can see significant cost savings and improvements in customer satisfaction, such as:
- Lower hold, handling, and resolution times
- Optimized interactions that delight customers
- Empowered, prepared human agents
3. Customer service agents
Of course, when it comes to customer service—the more channels, the better. Customers are more and more on-the-go, and having a seamless omnichannel experience can help you scale support while improving experiences.
For example, AI agents for retail can operate over email. Capacity’s Autopilot uses generative AI to automatically pre-populate email responses or even send them automatically to reduce repetitive, time-consuming work.
Using your existing data and records, Autopilot ensures every response is accurate and helpful; you can even choose from seven writing tones to send polished, on-brand messages.
Other customer service agents in retail operate via SMS. An ideal strategy for SMS AI agents links them to your entire support ecosystem—shifting conversations from web chat to SMS or voice to SMS.
Not only does this allow brands to offer even more convenient customer service, it also offers the chance to connect with customers on a proactive basis. The same SMS AI agent can assist a customer with their purchase or push promotion or sales announcements.
4. Knowledge base agents
Not all AI agents in retail are for customers. To answer customer questions effectively, most brands keep a record of internal information called a knowledge base. This helps ensure every answer is accurate and consistent.
However, many of these systems require manual updates, time-consuming organization, and custom integrations. AI offers a way to streamline knowledge management and make it easier for agents to find the answers they need.
Tools like Answer Engine® eliminate searching. No matter where information is stored, Answer Engine® uses generative AI to analyze files and find the correct answer—down to the exact page number. All agents have to do is search for it.
5. Virtual shopping assistants and personalized shopping experiences
Advanced AI agents can even harness customer context from your CRM to recommend products to shoppers as they navigate your site. Personalized experiences are more and more important for consumers—in fact, 71% of consumers expect it.
Proactively recommending products to customers helps brands achieve significant ROI from their AI tools. Capacity customers find that they achieve a 60% higher engagement rate from their opted-in shoppers, resulting in an extra $3.89 generated per session on average.
Using AI to offer unique experiences that adapt to each customer will be a major differentiator for retailers as technology becomes more advanced.
3 Real-world AI agent use cases in retail
Now that you have a sense of what AI agents can do, let’s bring it to life with some real-world customer service examples. From saving $1.5M in support costs to streamlining shopping experiences, let’s walk through how you can use AI agents to drive growth and improve efficiencies.
DSW saved $1.5 million in support costs with AI agents
Next time you want to exchange those new shoes that just don’t fit right, you might just talk to one of the virtual agents that’s saving DSW $1.5 million in support costs.
In recent years, DSW has seen an influx of customers. For the brand’s support teams, that meant longer hold times on calls, and more frustrated callers.
To meet rising demand, DSW implemented an AI agent that could:
- Instantly authenticate and greet callers using full customer context
- Analyze recent order history and caller intent to determine how to assist
- Independently help with accounts, orders, and customer rewards
The AI agent alone has helped DSW save $1.5 million in support costs as well as reduce average handling time by 19% and boost CSAT scores by 30%.
PacSun streamlined shopping experiences with AI agents
Long support times, low customer satisfaction, and overwhelmed agents: PacSun has seen it all. But AI agents were a game changer for them.
To streamline the shopping experience and make it easier for their customers to get help, PacSun implemented both web chat and SMS virtual agents. Customers can ask for assistance on-the-go, while staying connected with the brand on products they might be interested in.
With 24/7 chat and SMS AI agents, PacSun is:
- Opting in 33% of shoppers to SMS marketing
- Converting 19% of shoppers with personalized recommendations
- Deflecting 85% of order and delivery FAQs from support teams
Now, PacSun can scale support up and down to meet demand while reducing FCR and CSAT.
ScS improved their delivery process with AI agents
One of the UK’s leading sofa specialists, ScS coordinates approximately 5,000 shipments weekly. Without AI, the manual process of supporting customers and organizing shipments was inefficient, time-consuming, and frustrating for both customers and teams.
ScS implemented AI SMS agents that could automate multiple steps in the process, including updating the CRM and sending shipping and delivery notifications.
As a result, ScS is saving $260K annually in otherwise missed or inefficient deliveries.
Wrapping Up
All in all, AI agents in retail are a great way for brands to elevate their customer experiences while lowering their overhead costs. They can help both customers and internal support teams to access the information they need faster, as well as optimize support interactions so they’re more satisfying over time.
Combined, these two capabilities can save retailers hundreds or millions of dollars in support expenses, as well as hours of time previously spent on manual, repetitive tasks.
With personalization capabilities, companies can use AI agents for retail to offer truly unparalleled experiences that boost customer loyalty and increase revenue over time.
Want to learn more? Request a demo to see how Capacity can help lower expenses, improve customer and team satisfaction, and create more revenue with AI agents.