AI

AI crafts custom retail experiences

In retail, AI is revolutionizing the way brands engage with customers, making interactions more seamless, personalized and intelligent.

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Photo: NICE

March 5, 2025 by Retail Customer Experience

AI is often misunderstood — many people think of it solely in terms of chatbots, image generators, or automation. But in retail, AI is revolutionizing the way brands engage with customers, making interactions more seamless, personalized and intelligent.

To explore how AI is transforming the customer experience, Retail Customer Experience spoke with Karen Inbar, director of product marketing at NICE, about the biggest trends, challenges, and opportunities AI presents for retailers today.

Q: AI is reshaping every industry, especially retail. What are the biggest ways AI is influencing the customer experience?

Karen Inbar: One of the most exciting shifts is how AI is making self-service smarter and more intuitive. Shoppers today expect websites and mobile apps to anticipate their needs, providing proactive assistance when they need it — whether that's helping them find the right product, answering questions, or completing a purchase. AI-driven self-service ensures that digital shopping feels as seamless as interacting with a knowledgeable store associate.

Another big impact is in the contact center. AI is transforming customer support by equipping agents with real-time assistance, automated insights, and predictive routing. AI-powered tools help agents find the right answers faster, summarize interactions automatically, and even detect sentiment, making customer interactions more efficient and personalized.

Lastly, AI is turning customer feedback into actionable insights. Retailers can analyze sentiment from surveys, reviews, and even unsolicited feedback to understand pain points, preferences, and emerging trends, ultimately improving every touchpoint along the customer journey.

Q: Many retailers struggle with friction points in the shopping experience. How can AI help smooth out these challenges, whether online or in-store?

Karen Inbar: The key is understanding the customer journey holistically. AI can help at every stage:

• Awareness: AI-driven proactive engagement allows brands to reconnect with existing customers who haven't purchased in a while or encourage high-value interactions. Intelligent outreach can dramatically boost engagement rates compared to traditional marketing.
• Consideration: Since up to 99% of online shoppers don't complete a purchase, AI can analyze browsing behavior in real-time to present personalized recommendations, special offers or live assistance at the right moment.
• Acquisition: AI-powered sales coaching and intelligent routingcan ensure high-value customers get connected with the best agents who can assist with purchases, improving both conversion rates and customer satisfaction.
• Service: AI ensures that customer interactions flow seamlessly across digital and human-assisted channels, reducing frustration and improving efficiency.
• Loyalty: AI-powered feedback analysis helps retailers understand what's working and where they can improve, allowing them to optimize the experience for long-term customer retention.

By orchestrating AI and human support effectively, retailers can reduce friction and make shopping smoother at every step.

Q: Let's talk about conversions. How can AI help improve checkout success rates?

Karen Inbar: AI plays a huge role in reducing cart abandonment by identifying signals that indicate hesitation — like repeated visits to a product page or removing items from the cart. When AI detects these behaviors, it can:

• Offer assistance through chat, FAQs, or a live agent to answer last-minute questions.
• Provide personalized incentives, such as free shipping or a limited-time discount.
• Streamline the checkout process by pre-filling forms, suggesting payment options, or flagging potential issues before they cause frustration.

These real-time, AI-driven interventions help ensure that interested shoppers complete their purchases instead of dropping off.

Q: AI solutions are evolving quickly. What makes some AI tools stand out over others?

Karen Inbar: The most effective AI solutions don't just automate tasks — they enhance the entire customer journey by integrating AI-driven insights with human expertise. The best AI platforms:

• Unify interactions across all channels — voice, messaging, chatbots, and live agents—so customers don't have to start over at every touchpoint.
• Continuously learn and adapt, improving responses and recommendations over time.
• Seamlessly integrate with existing systems, avoiding the common problem of fragmented customer data.
• Provide AI assistance for both customers and employees, ensuring that automation supports — not replaces — human interactions.

Ultimately, AI isn't just about efficiency — it's about creating a better, more intuitive experience for customers while empowering employees to provide higher-quality service.

Q: Where do you see AI taking retail in the next few years?

Karen Inbar: We're moving toward a future where AI is an invisible but essential part of the retail experience. Expect to see even more hyper-personalized, real-time customer engagement—where every interaction is informed by context, sentiment and behavior.

Retailers who embrace AI-driven, customer-centric strategies will be the ones who thrive. The goal isn't just to automate processes, but to create seamless, intuitive and meaningful experiences that keep customers engaged, satisfied, and loyal.

To learn more about NICE and its AI retail solutions, click here.