Generative AI in Retail: Use Cases and Statistics
E-commerce managers are always searching for the next big thing to give them a competitive advantage, and Generative AI is perhaps that very thing. It’s not just allowing retailers to improve operational efficiency or save costs, it’s helping them transform the entire customer experience. GenAI is designed to learn, adapt, and think, creating smarter, faster, and more personalised shopping journeys.
In this blog, we’ll dive deep into the world of Generative AI. From useful statistics and practical use cases to the key benefits of integrating AI, you’ll see how it’s helping retailers get better results. The future of retail is here, and it’s powered by Generative AI. Let’s explore how it can reshape your business for 2025 and beyond.
Generative AI in retail statistics
Improvements in customer satisfaction through AI Integration
- NatWest’s AI chatbot:
NatWest’s integration of OpenAI’s technology into their customer chatbot, Cora, led to a 150% increase in customer satisfaction, demonstrating the effectiveness of AI in enhancing customer service. - AI chatbots in customer service:
The use of AI chatbots in customer service has led to a 15% improvement in customer satisfaction scores, showcasing their role in providing efficient and responsive support. - Consumer expectations:
A report by Verint reveals that 80% of customers anticipate improved experiences using bots and AI in customer service interactions.
Enhancements in customer engagement and experience
- Personalised recommendations:
Major retailers like Amazon have implemented AI assistants, such as Rufus, to provide personalised recommendations, improving customer engagement and satisfaction. - Hybrid customer journeys:
Approximately 70% of customer experience leaders are reevaluating the entire customer journey, moving towards a hybrid model that combines human and AI interactions. - Generative AI in online engagement:
During the recent holiday season, traffic to retail websites via generative AI chatbots increased by 1,300%, highlighting the growing role of AI in driving online engagement.
Enhanced online shopping experience:
Over half (55%) of retail shoppers feel that generative AI has enhanced their online shopping experience, indicating widespread consumer approval of AI-driven enhancements.
Financial impact and operational efficiency
- AI in retail revenue and cost reduction:
The integration of AI styling has transformed retail by offering personalised fashion suggestions, enhancing both B2B and B2C interactions. A 2024 Nvidia study found that 69% of retailers experienced higher annual revenue and 72% saw reduced operating costs after adopting AI. - Global AI retail market growth:
The global AI retail market is predicted to reach $85.07 billion by 2032, reflecting significant investment and growth in AI technologies within retail. - AI-driven personalisation benefits:
Companies implementing AI-driven personalisation have observed a 67% increase in customer engagement rates compared to traditional marketing approaches. - Reduction in customer churn:
AI-driven personalised interactions have resulted in a 14% reduction in customer churn rates, highlighting the role of personalisation in retaining customers. - Conversion rate improvements:
AI-driven personalisation has led to a 49% improvement in conversion rates, demonstrating its effectiveness in driving sales. - Operational Efficiency Gains:
The implementation of AI in customer service has led to a 52% reduction in resolution times, improving operational efficiency. - Improved Sentiment Analysis: Modern AI systems have demonstrated an 86% accuracy rate in detecting customer emotions and preferences through sentiment analysis, informing customer service approaches.
Consumer trust and adoption of AI in shopping
- AI-assisted purchases:
Approximately 34% of consumers are open to allowing AI tools to make purchases on their behalf, indicating a growing trust in AI-driven shopping experiences. - 78% of e-commerce brands have either implemented AI in their online stores or plan to do so, highlighting the growing adoption of AI in online retail.
These statistics collectively show the impact of AI in enhancing customer service, engagement, and operational efficiency within the retail industry.
Generative AI in retail use cases
Use Case 1: Product description generation
Most of shoppers rely on product descriptions to make buying decisions. Generative AI enables retailers to create product descriptions quickly and easily. Instead of spending hours writing descriptions for each item, AI can generate them in seconds. This saves time and effort for the marketing team, allowing them to focus on other important tasks. In fact, 87% of shoppers say accurate, rich, and complete product content is very important when deciding what to buy. AI also helps make sure all product descriptions are consistent and accurate, which builds trust with customers.
For retailers, using AI to create product descriptions is a smart way to save time, improve the shopping experience, and increase sales.
Use Case 2: AI-driven email campaigns
AI-driven email campaigns allow retailers connect with their customers on a more personal level. Instead of sending out generic emails or ads, retailers can analyse customer data and preferences to use Generative AI to deliver personalised content that’s more likely to convert. In a nutshell, retailers can make their email campaigns more effective without needing to manually tweak every detail. Generative AI can even improve website’s visibility on search engines by creating SEO-friendly content. Better-optimized product pages can bring in more traffic.
Use Case 3: Product image generation and enhancement
In Etsy’s buyer surveys, 90% of shoppers stated that the quality of photos was either “extremely important” or “very important” when making a purchase decision. AI-powered product image generation and enhancement capabilities offer a more dynamic and cost-effective solution than traditional photoshoots. Retailers can use Generative AI to generate various angles, colour variations, or even 3D models of their products, allowing customers to explore items in detail from the comfort of their own homes.
This enhances the online shopping experience and eliminates the need for multiple physical samples, making the process quicker and more efficient. High-quality visuals have been proven to significantly increase customer engagement and conversions.
Use Case 4: Improved customer support
Generative AI helps retailers improve their customer support by providing faster and more personalised responses. It learns from previous customer interactions, making future responses more relevant and personalised to the customer’s needs. Also, AI smart shopping companions can handle common queries, such as product details or shipping updates, without needing human intervention, freeing up customer support representatives for more complex tasks.
With an AI-powered smart shopping assistant, retailers can offer round-the-clock assistance, answering customer questions and resolving issues instantly. Here are some specific customer support use cases that Generative AI can handle really well:
- Order tracking:
Generative AI can provide real-time updates on order status, ensuring customers are always informed about their purchases. - Warranty claim integration:
AI can help manage warranty claims by automating the process and offering instant solutions to customers. - Basket integration:
AI can recommend products based on items in a customer’s basket, creating a smoother shopping experience. - Personalised shopping assistance:
AI can guide customers through product selections, offering recommendations based on preferences and past behaviour. - Product comparison:
Generative AI can generate side-by-side product comparisons, helping customers make informed purchasing decisions.
Benefits of using generative AI in retail
Generative AI gives retailer the opportunity to improve their operational efficiency and create experiences that truly resonate with customers. It’s about simplifying the complex, saving time, and freeing up resources so teams can focus on high-value activities.
With AI handling tasks, retailers can offer a more personalised and efficient experience that keeps customers coming back. Here are some key benefits:
- Increased efficiency:
Automates repetitive tasks, saving time and allowing teams to focus on more strategic initiatives. - Personalised customer experiences:
Delivers content, recommendations, and support that feel unique to each shopper. - Cost savings:
Reduces the need for manual work and expensive processes like photoshoots, cutting operational costs. - Stronger customer loyalty:
Creates a more engaging and unique experience, building trust and encouraging repeat business. - Improved conversion rates:
Enhances product visibility and customer engagement, resulting in higher sales and more completed transactions.
Converso: Your AI-powered smart shopping assistant
Converso is a powerful smart shopping assistant designed to help retailers provide a next-level shopping experience. Powered by Generative AI, it builds meaningful, personalised connections with customers, offering recommendations and real-time assistance throughout their shopping journey. Whether through voice or chat, it adapts to each customer’s needs, ensuring a smoother, faster shopping process.
With Converso, retailers can engage customers around the clock, offering instant support and product suggestions. It eliminates the need for manual intervention by automating responses to frequent queries, making it easier for retailers to handle high volumes of traffic. All in all, it improves the customer journey, driving conversions and making online shopping more enjoyable for everyone.