July 17, 2024


Inspired By Shop

10 Ways ChatGPT Is Transforming Retail Shopping Experiences

7 min read

Have you heard of generative AI? It’s the technology that helps computers learn and create things on their own. I wrote this blog using Grammarly, which is a form of AI, but ChatGPT is the most popular of the AI technologies out there. According to Mint, it is the fastest technology to hit 100m users, doing what took Facebook 4.5 years and the mobile phone 16 years in two months.

In the next seven years, AI’s impact on retail will be even more significant than that of big stores like Walmart and Target in the 1990s.

I asked ChatGPT to define generative AI with an example.

Generative AI is like a magic drawing board that can create new pictures all by itself. Just like how you can draw a picture, the AI can also create its own picture but without any help from a person. It uses a special type of computer program that can take a basic idea, and then create new things based on that idea. Just like how you can draw a happy smiley face on the board, the AI can create different happy faces on its own.”

Yeah, not bad!

I remember attending an IBM conference about Watson for big enterprise businesses. At the time, they talked about the hard part of training artificial intelligence on what to look at and what success looks like. It wasn’t just flip a switch. In fact, according to Sol Rashidi, Chief of Analytics at Estee Lauder, “AI was created in the ’70s by a bunch of brainiacs from Dartmouth. If you go back and think about it, that was 50 years prior.”

What’s changed is AI usage has gone from only business to business to direct-to-consumer.

While imperfect, artificial intelligence can potentially revolutionize the shopping experience for customers and retailers.

Here are some ways ChatGPT can be used in retail, transforming the shopping experience and driving innovation in the industry. I’ve included a few examples as well as sample instructions, called prompts, you can cut and paste. 

Developing Market Strategies

ChatGPT can analyze customer data to provide valuable insights into buyer behavior, such as popular products, the most effective marketing channels, and the factors influencing customer loyalty. By collecting customer feedback and conducting surveys, retailers can gain a deeper understanding of their customers and use this data to shape product offerings and marketing strategies. And most of that can be accomplished by simply asking for what you want.

Example: An electronics retailer uses ChatGPT to analyze customer reviews and social media comments. The AI identifies a rising trend in demand for wireless earbuds with noise-cancellation features. The retailer then decides to increase the variety of such products in their store and create targeted marketing campaigns, resulting in higher sales.

You could start with a prompt like, “What are the top trends in [your niche] for 2023?”

Crafting Effective Help Wanted Ads:

Hiring the right staff is essential for retail businesses, and AI can help create compelling help-wanted ads that attract qualified candidates. ChatGPT can analyze the characteristics of successful employees in the retail sector and use this information to generate job advertisements highlighting the skills and qualities desired in potential hires. By creating targeted, engaging job postings, retailers can streamline hiring and find the best candidates for their team.

Example: A toy store uses ChatGPT to create a help wanted ad for a sales associate position. The AI-generated ad outlines the necessary skills, such as excellent customer service and knowledge of popular toys, resulting in more qualified applicants for the position.

You might want to do a video as well, so consider a prompt like, “Write an engaging video script about working at [store name] and include fun, flexible hours and training you can use in your side hustle.”

Upgrading Customer Care:

Integrating ChatGPT into retail customer service channels can provide instant, automated, 24/7 support. ChatGPT can provide real-time updates on order status, shipping information, and estimated delivery dates. With its language translation capabilities, ChatGPT can also offer customer service and support in multiple languages, catering to a diverse customer base. Generative AI stands out from current chatbots because it can learn from interactions and develop human-like responses.

Example: A shoe retailer uses ChatGPT to create a multilingual chatbot that assists customers with inquiries about sizing, returns, and shipping. The chatbot offers instant support in various languages, improving the shopping experience for diverse customers.

Example: A bookstore integrates ChatGPT into its website. When customers log in, the AI analyzes their reading history and preferences, generating personalized book recommendations. Customers appreciate the tailored suggestions, which leads to increased customer satisfaction and repeat purchases. The key in such cases is teaching the AI what to look at to make the associations.

Upgrading Identity Verification:

ChatGPT can quickly analyze large amounts of data to identify potentially fraudulent activity, such as suspicious purchasing patterns, multiple orders to the same address, or high-value purchases with different credit cards. Retailers can train ChatGPT to learn from previous fraud cases, improving its ability to detect future patterns and risks.

Example: An online jewelry store uses ChatGPT to monitor transactions for signs of fraud. The AI flags a series of purchases made using different credit cards but shipped to the same address. The retailer investigates and identifies a potential credit card fraud case, preventing financial loss.

Streamlining Returns:

ChatGPT can help customers by answering frequently asked questions on returns and exchanges that people could otherwise have wasted time searching your site or calling a help desk. This automation frees time for customer service representatives to focus on more complex issues.

Example: A sports equipment retailer uses ChatGPT to guide customers through the return process for a damaged product. The AI provides step-by-step instructions on how to return the item and offers updates on the refund status. This seamless process improves the customer’s overall experience.

Natural Language Processing:

According to Retail Brew, retailers are particularly interested in natural language processing (NLP), which involves understanding and generating human language. That is what makes generative AI so powerful.

Ken Murphy, SVP of product at OfferUp, said the platform focuses on NLP to make the peer-to-peer sales process smoother. “Things like ChatGPT offer tremendous opportunities for us to make it easy for a seller to generate a fantastic description of their item,” Murphy said. Upon the launch of its own AI tool earlier this month, Shopify Magic, Shopify said that well-crafted product descriptions could bring more traffic and increase conversion rates.

NLP is most useful for online sites, where sales depend on a considerable amount of human language in the form of a chat to answer questions about price, color, and size, among other things. “We believe there’s a remarkable opportunity for us to start to combine things like NLP and image recognition technologies, where we can start to answer those questions for you,” Murphy said.

Clueless is Real:

The new virtual personal shopping assistant, powered by AI, is a remarkable tool for fashion enthusiasts. Users can easily upload pictures of their wardrobes, and the AI recommends outfits that fit their unique style, much like Cher in the movie Clueless. This advanced shopping assistant provides a personalized experience for users, making their shopping journey more enjoyable and efficient.

Enhancing Brand Awareness:

ChatGPT’s AI capabilities can significantly enhance advertising efforts for retail stores. ChatGPT can create tailored advertising campaigns that resonate with specific customer segments by analyzing customer data and identifying target demographics. Furthermore, ChatGPT can generate interesting content for social media platforms and other online channels to increase brand visibility and attract new customers. This AI-driven approach to advertising allows retailers to maximize their advertising budget and achieve better results.

Example: A home decor store uses ChatGPT to create a social media advertising campaign. The AI generates content that engages the viewer, such as blog posts and visuals, highlighting popular trends in interior design.

The prompts you could use might be:

  • Write a minute-long advertisement script about [product, service, or company].
  • Create a 3-month social media campaign calendar for our product with the goal to [insert goal] and mention the channels we should focus on.
  • List [number] viral Instagram Reels ideas about [company, product, or service].

Customizing Customer Interactions:

ChatGPT can also revolutionize customer relationship management (CRM) by offering personalized experiences for customers. ChatGPT can identify customer preferences, purchase history, and unique needs by analyzing customer data stored in CRM systems. Retailers can then use this information to send highly personalized offers and promotions tailored to each customer’s interests. This targeted approach improves the customer experience and increases the likelihood of customers taking advantage of promotions and making additional purchases. AI-driven CRM personalization allows retailers to build stronger customer relationships and boost long-term loyalty.

Example: A beauty retailer uses ChatGPT to analyze customer data in their CRM system. The AI identifies customers who frequently purchase skin care products and sends personalized offers for new skincare releases or exclusive discounts. This targeted approach builds consumer trust and encourages repeat purchases.

In Sum

By harnessing the power of ChatGPT, retail executives can transform their businesses and provide an unparalleled shopping experience that caters to today’s customers’ needs, expectations, and preferences. This prompted Forbes to say, “ChatGPI is the future of retail.”

ChatGPT is a powerful tool that can enhance customer engagement, streamline operations, and drive sales in the retail industry. With its natural language processing and machine learning capabilities, ChatGPT can provide personalized recommendations, automate routine tasks, and boost sales.

Yes, the reality is that unique content is being created based on existing content, which means some significant ethical issues – especially for creators in art, music, and experts like yours truly as our intellectual property is scooped up and refashioned into something not really new, just repackaged.

But the ethics of AI is for another post.

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