Guest Column | January 5, 2023

How Retail Companies Use AI To Navigate Today's Complex Labor Market

By Rebecca Jones, Mosaicx


Imagine a retail decision maker from 2012 jumps 10 years into the future. When they arrive in 2022, what would they see?

They might see industries rocked by rising inflation, supply chain issues, chronic understaffing, and increasing customer expectations. According to one study, 80% of retailers struggle to meet sales goals due to labor shortages. Nearly nine in 10 retailers say customer expectations exceed what they can deliver. And 95% expect to be understaffed at least once a week during the holiday season.

Amid such an unstable labor market, companies scramble to train employees and serve customers. The customer experience has shifted dramatically. It’s digital-first and almost entirely online. This has been a boon to the retail sector. Analysts estimate that making shopping more technology-enabled can double retail profitability. But ongoing labor issues and growing customer expectations have pushed businesses to completely redesign their retail customer experience.

These changes are why many leaders rely on artificial intelligence (AI) to navigate a complex labor market. AI helps retail businesses streamline employee and HR operations while also improving the retail employee and customer experiences.

AI’s Role In Retail Employee Staffing

Growing a business in a turbulent labor market means streamlining employee and HR operations to increase efficiency and guarantee quality customer service. Retail companies are using AI to streamline their hiring and improve the employee experience once candidates are in the door.

Recruitment is not cheap. It often requires heavy time commitments from an already strapped staff. Studies have put the cost of hiring a single employee at more than $4,000. But according to one expert, the true cost of filling a position can be three to four times that of the position’s salary.

AI streamlines the hiring process. It simplifies the search for candidates, using intelligent tools like machine learning to filter applications and flag profiles that best meet desired criteria. Targeting the right candidates from the beginning saves companies money and time. AI also analyzes job descriptions to identify and remove potentially biased language, an important step for organizations focused on diversity, equity, and inclusion.

AI’s Role In Retail Employee Experience

AI also can improve experiences for retail employees. Burnout is a constant concern for employers. AI-enabled communication tools can handle multiple customer requests simultaneously to relieve the burden on understaffed or overworked teams. This automation increases employee satisfaction and retention. AI also can route more complex cases to human team members.

AI goes beyond workload and staffing concerns, though. Conversational AI, for example, can streamline tasks like employee scheduling. It facilitates real-time, human-like voice and chat communications between a person and a computer using natural language processing, machine and deep learning, and contextual awareness. Conversational AI can learn and report on customer preferences, which means businesses can develop customer personas to better understand a customer’s needs and anticipate requests.

For example, if an employee is sick or needs to make a shift change, they can use an intelligent virtual agent (IVA), which uses conversational AI to automatically secure coverage. If an employee calls an IVA and tells it the new time and day for their shift, the IVA can then suggest a replacement for that shift, confirm the details with the employee, and notify other employees. AI handles the burden of labor-intensive scheduling tasks to improve experiences for employees across different levels.

AI also promotes payroll efficiency. HR teams can use automated tools to monitor how the system collects and processes employee data to improve communication. Say an employee notices a payroll discrepancy. They can use an IVA to report it automatically. The IVA also can update personal information that might have caused the issue, such as an outdated address, name change, or other old information.

Deliver On Retail Customer Demand And Drive Revenue

We’ve seen that customers prefer to solve issues on their own. They want a quick, efficient channel to do so. Retail businesses are embracing AI because it facilitates this kind of intuitive self-service, shortens customer wait times, and gives customers access to 24/7 support.

AI is a powerful tool for communication. An IVA can tailor SMS marketing campaigns to target customers with the right holiday promos, discounts, and new product releases. IVAs also personalize the customer experience with direct marketing campaigns that generate new revenue opportunities.

Conversational AI personalizes the retail customer experience. If an online customer leaves an item in their cart or forgets to finalize a purchase, IVAs will proactively help them complete their transactions. The IVA might also suggest other products during the transaction. This type of targeted customer communication encourages repeat business and can lead to improved customer retention. In fact, 75% of consumers say a consistent customer experience improves the likelihood of continuing to do business with a brand.

The retail industry is not what it was 10 years ago. Today, it’s digital-first and more focused on meeting customer expectations. Complex labor markets continue to make staffing and managing retail employees a challenge. Many businesses have turned to AI to streamline employee-related operations and improve the retail employee experience. As your business navigates these uncertain times, you should consider how AI-powered communication solutions can help provide employee efficiency and stability.

About The Author

Rebecca Jones is general manager of Mosaicx. In her 25+- year career, she has held a broad range of operations executive roles focused on growing businesses, people, and profit margins. Rebecca also serves as a member of the board of the Families for Effective Autism Treatment (FEAT) of Louisville.