• AI
  • 7 min read
  • December 2020

Improving Customer Experience with AI: Key Insights

Artificial intelligence is playing a significant role in business operations. There are various examples where AI programs and services transform data collection and processing to employees’ onboarding.

AI and automation derive much value in terms of time and cost savings. But these are examples of how AI impacts businesses internally.

Today in this article, we will help you focus more on understanding how AI will improve customer experience.

For every business, delivering the ultimate customer experience is the core foundation.

For CTOs and the various other decision-makers in the business, including AI for external and internal uses is a high ROI factor.

Another critical factor is that with AI, ML, and data analytics, creating a unique customer profile for their user base will come in handy.

Why is customer experience so significant?

How do critical financial decisions depend on customer experience?

30% of customers will leave a brand and never come back because of a bad experience. - OpenText

When a customer has a positive customer experience, he/she will feel more loyal towards that brand.

Apart from that, they will become brand advocates and help spread more positive words regarding your business.

This means you retain more customers and spend less on customer acquisition strategies.

So, providing a world-class customer experience is very important for keeping your loyal customer base. You might be spending numerous dollars, pounds, shillings on advertisements or marketing.

But nothing works better than having your loyal customer help you grow your brand’s awareness.

What is artificial intelligence?

Artificial intelligence (AI) is a branch of computer science that develops smart machines capable of performing human intelligence tasks.

With the advancements in machine learning, deep learning, and big data, AI has brought a paradigm shift in every industry.


We will elaborately cover AI in one of our upcoming articles, so make sure you check our official blog for more informational articles.

How do businesses use AI to improve customer experience?

Let’s take examples of some businesses that used AI for improving customer experience.

1. KFC’s facial recognition

In collaboration with Baidu, KFC created a facial recognition algorithm to predict what customers might want to eat. The facial recognition works based on

  • the time of the day
  • the estimated age of the person
  • their gender
  • their mood

For instance, if you are between the ages of 20-25, the facial recognition app predicts that you might order a crispy hamburger meal, chicken wings, and a coke.

KFC claims that the system will also remember what the customer requested for future orders.

2. Macy’s shop assistant

Macy’s has been testing cognitive AI technology to help their in-store customers. Their “Macy’s On Call” answers relevant, customized responses regarding where the products or brands are located in a specific store.

When you are at a big store, there is a chance that you will not have a shopping assistant around you when you need one.

Macy’s AI shop assistant is a straightforward solution for a common problem faced by shoppers.

The shopping assistant AI proves a simple point; AI technology does not have to be overly complicated.

3. Volvo’s early warning system

Volvo has been a symbol of safety in vehicles off-late. Their Early Warning System analyses over one million events every week and predicts which car part requires repair or needs to be repaired.

This technology allows car owners to maintain their vehicles in pristine condition and never wait for a tow truck ever again for a simple reason like a car break down. 

Volvo has been testing cars with sensors that report the driving conditions to the Swedish highway authorities. Volvo’s early warning system is an example of taking customer experience one step further: the drivers’ safety.

4. ASOS’ app

UK-based ecommerce clothing retailer ASOS released a new app. In this app, users can upload a picture of their favorite celebrity wearing something they like.

Based on the uploaded image, the ASOS app starts scanning the massive clothe database. Once the scanning is done, the app gives similar suggestions to the users in an affordable price range.

By providing such a customer experience, ASOS has brought in 48% more product reviews.

The app enables ASOS to make visitors 75% more likely to make a return visit and place 9% more worth of orders.

5. Boxed’s Smart StockUp AI tool

Boxed, an online mobile membership-free wholesale retailer, created the Smart StockUp AI tool. This tool predicts when the users will run out of daily essential products such as toilet paper, detergent, or milk. 

They ask their users basic questions during the initial setup to refine its prediction algorithm.

They also include the shopping history of individuals and put it against the general re-stocking patterns. Based on the data, they then make a recommendation to the users. 

Users get ‘need these now’ and ‘need these soon’ recommendations based on which they can add products to their cart. The more shoppers make purchases from Boxed, the smarter the Smart StockUp AI tool becomes.

Although the tool has not been completely automated yet, Boxed experimented with selected shoppers to get closer to fully autonomous shopping.

We hope this section was able to highlight the importance of artificial intelligence in improving customer experience.

What are the areas where AI is improving customer experience?

Let’s take a look at a few areas where artificial intelligence is improving customer experience.

1. Empowering self-service

Gartner had predicted that by 2020, 85 percent of customer relationships would be managed without human interaction.

No longer do the customers need to be on hold and listen to company jingle—no more waiting time to speak with the next available agent. Artificial intelligence, coupled with big data analytics and machine learning, have made chatbots smarter.

Many businesses now use chatbots and virtual assistants to answer common customer service questions, allowing customers to get the assistance they need in real-time.

2. Personalized recommendations

In 2017, Netflix saved $1 billion by using machine learning.

“Recommended for you based on your previous interactions.” How many of you have seen this or something similar to this?

You will generally see such recommendations on sites like Amazon, Spotify, YouTube, Netflix, Hulu. With AI making its way to cloud data, it is learning about human preferences at a much faster rate. And this is the way it is transforming the customer experience. 

3. 24/7 Customer support

By 2025, AI will power 95% of customer interactions.

Your workforce cannot work round the clock; they will get tired, stressed out, and worn down. AI will not! Plus, 24/7 customer support is not just a trend but a trend changer.

Modern customers with a fast way of life are unwilling to wait for support agents to revert to them.

With AI in customer service, businesses can make the wait time productive and help them gain a better customer experience.

4. Automated assistance

By 2025, the global AI market is expected to be almost $60 billion.

With smart homes, users got better at using personal AI assistants like Alexa, Google Assistant, and Siri to interact with IoTs.

Modern users use their assistants to check, change, and set their thermostats, music, and even the lights. Many retail businesses have developed apps for placing orders with these assistants.

With more and more companies using Alexa, Google Home, and other robotic AI to make customers’ lives easier, AI is transforming the customer experience.

As a matter of fact, AI is still growing; imagine the possibilities of AI in customer experience when the technology reaches its prime.

5. Complying customer service agents

84% of global business organizations believe that AI will give them a competitive advantage

Business owners have realized one simple fact: humans don’t have control over emotion.  Many customers have had bad experiences with customer service agents and have never done business with that particular company.

AI assistants will never get upset, even though they are learning emotional intelligence simply because they are not bothered by emotions as quickly as humans.

With an AI assistant, companies can rest assured that their customers will always get the best customer experience and stay loyal.

Conclusion: Artificial intelligence has become an integral business tool

AI-powered voice assistants to reach 8 billion by 2023

It’s not just the biggies, but SME’s too! Everyone is looking for a way to capitalize on this growing technology. We hope these use cases and areas in customer experience helped you gauge business growth possibilities using AI technology.

AI would not garner this much popularity as a standalone technology if it were not fused with NLP, ML, and big data analytics.

To see the true potential of artificial intelligence in customer experience, you need a digital partner that knows in and out of this technology.

Rapidops has been working with businesses from various verticals to develop AI assistants and has successfully delivered many digital products well-received in the international market.

Our services include delivering world-class digital products that are examples of the marvel digital engineering has brought into the transformation of business legacy.

If you want to know more about our services, then feel free and reach out to us.


Saptarshi Das

9+ years of expertise in content marketing, SEO, and SERP research. Creates informative, engaging content to achieve marketing goals. Empathetic approach and deep understanding of target audience needs. Expert in SEO optimization for maximum visibility. Your ideal content marketing strategist.

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