Human v. Machine in Retail Customer Experience

Reflecting on the great IQPC CX Retail Exchange event in London, one debate stood out above all others – how far should retailers push technology in this age of automation, analytics and AI? Is wall-to-wall technology in customer operations the answer, or does the lack of a human face or voice risk irritating or isolating customers?

The event kicked off with a powerful presentation by Tara Ballarotto on stepping back from the tech hype, thinking about customers as humans, and the value of real, authentic human interaction. At the same time there were multiple success stories on how next generation technology is creating new possibilities for retailers – for example SJ Grabiec talking about Gen AI at All Saints, and Richard Lim on the wider benefits of digital transformation.

These and many other perspectives paint a picture of technology as opportunity, or technology as risk. Which is right? Ultimately the question is not answerable with a single view. CX has always been a complex blend of technology and people, from the earliest cash registers and contact centres through to chatbots optimised by data scientists, there has always a balance to be found - an equilbrium shaped by the availability of skilled labour and the availability of good equipment and systems. Tech advances will continue change what combinations of people and technology are possible – in the process changing how tasks like query handling, personalisation and loyalty management can be done. Today most organisations are discovering new technologies helping them to achieve more with less across customer experience - but it is not an easy path.

For me three considerations stand out:

1. Timing – Although some platforms and channels can explode in popularity overnight, overall customer expectations about how they want to engage with retailers move more slowly. Clearly there differences between demographics, but like retailers themselves, end customers are learning how and when to use new channels such as virtual agents, voice commerce, personalised apps or augmented reality. Customer attitudes to technology evolve over time.
2. Brand – any given mix of technologies will be appropriate for one brand but not necessarily for another. Retail brands emphasising luxury, compassion and authenticity need to be particularly alert to the risks of insensitive over-automation. And the technology mix will need to vary for a retailer or ecommerce player with multiple-brands or a 'house of brands' structure.
3. Cost – as well as changing the type of work that can be automated, tech advances are dramatically lowering the cost of automated work. A chatbot powered by a Gen AI large language model is orders of magnitude cheaper than inferior chatbots from 10 years ago. This means that highly automated or analytics-rich approaches to CX that were out of reach and unaffordable a few years ago could now present a compelling business case.

This means that across retail the tide will flow strongly towards more automation, with high touch / human touch customer engagement at a premium. The pattern will not be universal, and for many CX tasks, human interaction will remain integral to the service that customers will demand and want to pay for. For other CX interactions, customers will accept or even seek out more automated interactions. In a well run Retail CX operation, this will free up scarce CX talent to focus where it really matters.

Over the coming months and years getting this balance right will be a fundamental challenge for even the strongest retail CX teams.

Paul Morrison is Europe Practice lead for Retail and Consumer Goods at WNS

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