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The retail industry is on pace for evolution more significant than any it has faced in the last half-century. As we move forward, the next five years are set to redefine the sector, driven by an unprecedented pace of technological advancement change. 

A recent study reveals that a whopping 85% of consumers now expect personalized and engaging shopping experiences, underscoring the urgent need for retail brands to adapt to this new reality. Amidst this market shift, many brands find themselves at a crossroads, grappling with the challenge of meeting these new consumer demands. As with any crisis, an opportunity presents itself. In this case, for forward-thinking retailers to redefine the standards of customer service and engagement through the use of digital humans.

But how can your brand harness innovation to not just navigate these changes but also to seize a leadership position in your market?

In today’s post, we will uncover a groundbreaking approach that is set to revolutionize the retail sector. We’ll discuss how the integration of advanced technologies, like digital humans, can provide the personalized and engaging shopping experience that today’s consumers demand, setting the stage for retail’s next big leap.

“Today’s smart retailer is engaging in a new era of shopping experience, combining the human touch and technology to deliver a more tailored consumer experience.” 

Guita Blake, Senior Vice President, Mindtree

Driving Growth via a Better Online Experience

It’s clear that the online customer experience is becoming the battleground for brand differentiation. With products and pricing often similar across platforms, the unique value lies in making the shopping journey as personalized and engaging as possible. A compelling statistic from Deloitte reveals that customers who enjoy a positive shopping experience are 140% more likely to spend more, even if it means paying a premium over the average price point. For instance, online retailers implementing immersive technologies have witnessed a 40% increase in conversion rates, highlighting the substantial impact of enriching the customer experience. 

Offline, the shopping experience is premium — in-store customer service with a friendly face provides a level of personalized interaction and immediate gratification that online shopping struggles to match. Customers enjoy the tactile benefits of shopping in person, such as the ability to touch, smell, and see products, as well as receive personalized service from sales associates who welcome them by name and remember their preferences.

But how can this high level of personalized service be provided online, at scale, ensuring every shopper feels they are receiving one-on-one attention from a friendly and knowledgeable sales assistant?

Enter the realm of AI assistance, where digital humans emerge as a transformative force in online retail. By harnessing the power of artificial intelligence, online retailers can offer a deeply personalized and scalable service that mirrors the attentiveness of in-store experiences. AI-powered platforms enable the creation of digital sales assistants capable of providing tailored advice, recommendations, and support to each individual shopper, just as a knowledgeable salesperson would do in a physical store. 

This digital transformation not only bridges the gap between the personal touch of offline shopping and online convenience but also redefines customer engagement and satisfaction standards. With AI, the possibilities for creating engaging, interactive, and personalized shopping experiences are boundless, offering retailers new opportunities to captivate and retain customers in the competitive digital marketplace.

The Five Areas Where Digital Humans Will Help Win Retail

Digital humans are set to redefine what it means to shop online, offering an experience that rivals and often surpasses that of the physical store, setting a new standard in customer service and engagement.

Personalized Interaction

Digital humans are revolutionizing retail by offering personalized interactions that were once the exclusive domain of high-end, in-person shopping experiences. By leveraging data on individual customer preferences, behaviors, and past interactions, these AI-powered avatars can recommend products, suggest alternatives, and even anticipate needs, making each interaction feel uniquely tailored to the shopper.

“More and more brands are harnessing the power of AI to implement tailored product recommendations, and are seeing results. It’s estimated that 35% of Amazon’s sales come from its recommended products feature.” Meghann York, Product Marketer, Salesforce

Imagine a digital human stylist in an online boutique, helping a customer find the perfect outfit for an upcoming event. Knowing the customer’s size, style preferences, and past purchases, the digital stylist curates a selection of outfits, suggests accessories, and even offers styling tips. This level of personalized service not only delights the customer but also significantly increases the likelihood of a purchase.

Constant Availability

The 24/7 availability of digital humans ensures that customers can receive assistance whenever they need it, eliminating the frustration of waiting for business hours or navigating through automated help systems. This constant presence meets the modern consumer’s expectation for immediate and effective support, regardless of time or day.

Consider a customer struggling to set up a new smart home device late at night. What if a digital human was instantly available for a step-by-step guide, troubleshooting in real-time, and even providing video tutorials, ensuring the customer’s issue is resolved promptly, enhancing satisfaction and trust in the brand?

Global Reach with Multilingual Support

Digital humans can communicate in multiple languages, making them invaluable assets for global retailers looking to expand their reach. This capability ensures that language barriers do not impede the shopping experience, allowing brands to cater to a diverse international audience with the same level of personalized service.

Maybe a beauty brand with a global customer base could employ digital humans to offer makeup advice and product recommendations in various languages. A customer in Japan could receive skincare tips in Japanese, while another in Brazil could discuss the latest beauty trends in Portuguese, making the brand’s online store accessible and welcoming to all.

Enhanced Emotional Connection

Through natural language processing and emotional intelligence algorithms, digital humans can understand and respond to a shopper’s mood and tone, forging a deeper emotional connection. This ability to engage on an emotional level transforms the shopping experience from a transaction to an interaction, building loyalty and trust.

Imagine if a digital human librarian could engage customers in conversations about their favorite genres, suggest books based on their mood or recent reads, and even discuss the themes of their last purchase. This empathetic approach could turn a routine book purchase into an engaging experience, encouraging repeat visits.

Unmatched Scalability

The scalability of digital humans allows retailers to offer personalized service to an unlimited number of customers simultaneously, without the need for a corresponding increase in human staff. This scalability ensures that each customer receives the attention they deserve, significantly enhancing the overall service quality.

An online grocery store might utilize digital humans to assist customers in meal planning and shopping. Based on dietary preferences and past purchases, the digital assistant suggests weekly meal plans, recommends new products, and even reminds customers when it’s time to restock essentials. This scalable, personalized service can dramatically improve the shopping experience, making the brand a staple in customers’ daily lives.

Frequently Asked Questions About Implementing Digital Humans in Retail

What can I expect in terms of ROI from implementing digital humans in my retail business?

Implementing digital humans can significantly enhance customer experience and operational efficiency, leading to increased sales and revenue. For example, L’Occitane saw a 15% lift in mobile sales by utilizing AI to optimize the checkout process. Retailers are using AI to drive revenue growth, foster innovation, and stand out from competitors, showcasing the tangible financial benefits of adopting this technology.

How critical is data management for the success of digital humans in retail?

Data quality and management are paramount for the effective implementation of digital humans. A study found that 77% of retailers struggle to gain actionable insights from their data, emphasizing the need for high-quality data collection and management practices. Ensuring your retail business has robust data systems is a crucial step toward successfully leveraging AI and digital humans.

How exactly can digital humans improve the customer experience in retail settings?

Digital humans are designed to personalize customer interactions, making shopping experiences more engaging and satisfying. With AI, 41% of decision-makers aim to enhance customer experiences by personalizing interactions and streamlining services, which is a key factor driving AI adoption in retail. This focus on customer experience is vital for improving satisfaction and loyalty, which in turn drives revenue.

“Retailers who are ahead of the curve when it comes to the application of AI will have learned more from their early experiments and reap the benefits. Those playing catch-up may find themselves continuing to be just that – followers.”

Karina van den Oever, Principal, Elixirr

In what ways can digital humans enhance operational efficiency in retail?

AI and digital humans can automate routine tasks and improve inventory management, which boosts operational efficiency. 33% of decision-makers in retail identified operational efficiency as a major driver for AI adoption. By streamlining operations, AI allows employees to focus on more strategic tasks, contributing to overall business growth.

What challenges might I face regarding workforce adaptation when implementing digital humans?

Introducing digital humans and AI into retail operations can pose workforce adaptation and education challenges. A significant percentage of organizations report a need for more education around AI solutions and many face resistance to change. Ensuring your team is well-informed and trained on new technologies is crucial for a smooth transition and successful implementation of digital humans.

Introducing AVA

As digital commerce continues to evolve, Firework’s AVA stands out as a transformative tool for the retail sector. Designed with the retail industry’s unique needs in mind, AVA is an AI-powered digital human that enhances online customer interactions by offering real-time, personalized shopping assistance and recommendations. This innovative solution brings a new dimension to e-commerce, turning static online environments into dynamic, interactive virtual stores. 

Jerry Luk, Firework’s Co-Founder and President, emphasized the transformative advantage AVA offers brands, allowing them to “reshape the digital customer experience” by combining in-store shopping’s best aspects with e-commerce’s inherent conveniences. This integration creates a seamless and personalized customer journey, bridging the physical-digital divide in retail.

Implementing AVA is streamlined to ensure brand adoption ease. Firework has focused on making the integration of AVA into existing websites straightforward, enabling brands to enhance their digital storefronts without extensive overhauls. The technology behind AVA is designed to be adaptable and scalable, learning from customer interactions to continually improve the service it provides. This approach not only enhances the immediate shopping experience but also offers brands valuable insights into their customers’ preferences and behaviors, aiding in refining marketing strategies and product offerings.

Digital Humans Will Evolve with Retail

“On-demand personalized experiences are crucial for customer satisfaction and loyalty… It’s like having your most talented and knowledgeable staff available to all your customers at all times!” – How Generative AI Is Transforming the Retail Industry

The importance of an exceptional online customer experience cannot be overstated in today’s retail landscape. Consumers are increasingly seeking the personal touch and convenience of in-store experiences in their online shopping journeys. Retail brands that harness the power of AI and digital humans, like Firework’s AVA, are well-positioned to lead in this new era of digital commerce. By providing personalized, engaging, and efficient online experiences, these brands can differentiate themselves and build lasting connections with their customers.

Embracing digital humans in retail opens up a world of possibilities, extending far beyond initial applications. As we look to the future, the potential for digital humans to revolutionize various aspects of retail is immense. Here are some imagined yet plausible future areas where digital humans could have a transformative impact:

Seamless Omni-channel Support: Digital humans could provide consistent and personalized customer support across all retail channels, from online chatbots to in-store kiosks, ensuring a unified brand experience.

Example: A digital human that assists customers in an online store could recognize them when they visit a physical location, offering tailored recommendations based on their online browsing history.

Advanced Personal Shopping Assistants: Imagine digital humans evolving into personal shopping assistants capable of curating entire wardrobes or home decor sets based on sophisticated algorithms that understand individual style, budget, and preferences.

Example: A digital assistant that not only recommends products but also visualizes them in your space using AR technology, making suggestions for room layouts or complete outfits for special occasions.

Immersive Product Demonstrations and Tutorials: Digital humans could lead interactive product demonstrations and tutorials, using augmented reality (AR) and virtual reality (VR) to showcase product features, usage tips, and maintenance in a highly engaging manner.

Example: A digital human could guide a customer through the setup and use of a complex gadget in a virtual environment, providing an immersive learning experience that mimics personal in-store guidance.

These envisioned scenarios underscore the vast potential of digital humans in retail, indicating that the initial use cases we see today are just the beginning. As technology advances, so will the capabilities and roles of digital humans, continually enhancing and redefining the retail experience.

For retail brands ready to redefine their online customer experience, exploring Firework’s AVA is a step towards future-proofing their digital commerce strategy. To learn more about AVA, schedule a demo to see the difference digital humans can make in your retail business.

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