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How do retailers use AI for customer service (e.g., chatbots, virtual assistants)?

Retailers deploy AI-powered customer service tools to provide instant, scalable, 24/7 support. Chatbots handle routine inquiries including order tracking, return policies, product availability, size guides, store hours, and payment questions. Natural language processing enables these bots to understand intent, context, and sentiment, providing human-like conversations. Advanced virtual assistants go beyond FAQs to perform transactions: processing returns, modifying orders, scheduling appointments, and completing purchases through conversational interfaces. They integrate with backend systems for real-time inventory checks, order status updates, and personalized account information. AI-augmented human agents receive real-time suggestions, relevant knowledge base articles, and sentiment analysis during customer interactions, reducing handle time by 30-40%. Voice AI handles phone inquiries, routing complex cases to humans while resolving simple requests autonomously. Benefits include: 60-80% of routine inquiries handled without human intervention, response times dropping from hours to seconds, consistent service quality regardless of volume, multilingual support without hiring polyglot staff, and significant cost savings (typically $0.70 per chatbot interaction vs. $6-12 per human agent). Customer satisfaction often improves due to instant availability and quick resolutions.