How ChatGPT and AI will impact retail businesses in 2023
April 11, 2023 - 12 minutes readEverything you need to know about CHAT GPT this year and beyond.
Since its official release in November 2022, ChatGPT has gained serious momentum. Used by brands and businesses across sectors, this AI-powered innovation can write copy, articles, customer communications, and even code with just a few prompts.
To put the impact of ChatGPT into perspective, the platform took just five days to reach a million users following its launch, breaking several technology adoption records.
But what does that mean for retail and eCommerce businesses, exactly? Here, we’re going to look at what the rising popularity means for retail businesses—focusing on the opportunities and challenges.
What is ChatGPT, and what does it do?
ChatGPT is what’s known as a “large language model chatbot.” It was created and developed by OpenAI.
As it’s equipped with machine learning (ML) capabilities, the platform improves how it communicates through human interaction. So far, people have used the platform for:
- Creating marketing content
- Improving online chat communications
- Offering personal assistance and performing repetitive admin tasks
- Providing accurate language translations
- Conducting research and collecting information
ChatGPT is a very powerful and versatile tool that has the potential to offer a lot of value to retail or eCommerce businesses—if it’s handled correctly. To get the most from the platform, understanding its potential impact is essential.
How will ChatGPT impact retail businesses in 2023 and beyond?
Now that you’re up to speed with the concept of ChatGPT, let’s explore the ways it’s set to impact the retail and eCommerce sector—starting with operations.
Automating retail operations
Like many sophisticated artificial intelligence (AI) innovations, ChatGPT can carry out a range of operational tasks that ultimately boost productivity.
From writing product descriptions to debugging developer code and scheduling content, ChatGPT has a range of operational capabilities that retailers can use to their advantage.
With the ability to automate not only repetitive but fairly complex tasks, ChatGPT is giving retail brands the power to focus on more creative initiatives while remaining productive and responsive. The likes of Spotify, Carrefour, and Instacart have all used the platform to automate certain tasks and activities while working on vital campaigns.
Spotify, for example, is currently using ChatGPT to launch a ground-breaking interactive DJ feature that not only curates personalized playlists based on specific user preferences but also talks between tracks while offering tailored facts, trivia, and music hints.
As ChatGPT rises in adoption, it’s likely that many smaller retail brands will gain the ability to scale faster while competing with the bigger brands. By using the platform for the right tasks and strategies, you will boost your output while creating more time for the likes of lead nurturing and innovation.
Creating marketing content and communications
Perhaps the biggest boon of ChatGPT so far is the fact that it can write pretty powerful content for a range of channels, including social media, customer interactions, mobile app messaging, product or email copy, and blog articles.
As ChatGPT learns and gathers intelligence from every task or interaction, it produces natural, human-like copy based on the specific commands, parameters, and subject matter. These superior content writing capabilities are likely to be a game-changer both for small retailers looking to deliver effective marketing campaigns while juggling many plates, as well as bigger brands looking to make waves with large-scale communications across several channels.
Armed with the ability to create automated content for specific target audiences, many retailers will be able to broaden their marketing campaigns, potentially enjoying a healthy return on investment (ROI) in the process.
As more retail and eCommerce brands migrate to ChatGPT, we’re likely to see a wealth of marketing campaigns push boundaries and capture the imagination of digitally native customers. With this access to sophisticated automated content, ChatGPT may also even the playing field, allowing smaller or more niche brands to enjoy a bigger slice of the promotional pie.
With the ability to serve up targeted product recommendations to customers, it’s also likely that ChatGPT will drive a greater level of personalization both in-store and digitally. Personalization is vital to success in the modern age of retail, and ChatGPT has the potential to make it a more cost-effective option for brands looking to earn customer loyalty.
Boosting customer service output
At this point, you’ll know that many retail businesses use ChatGPT for customer service communications. Used as a chatbot, the platform provides responsive human-like interactions while performing a range of customer service tasks.
Babylon Healthcare, for example, uses ChatGPT for its customer service communications. It utilizes the platform to provide 24/7 healthcare advice, offer production recommendations, and diagnose several ailments. By doing so, the brand has expanded its audience while improving its customer retention rates.
ChatGPT has the potential to not only improve service output and make retail businesses more responsive across channels but also boost loyalty. In 2023 and beyond, retaining customers will be the cornerstone of many retail brands’ business strategies. Here are some ways ChatGPT can influence loyalty-based activities:
- Leveraging ChatGPT’s data-gathering abilities to use it as a personal shopper for your customers
- Programming ChatGPT to be a personal event planner, providing certain segments of your customers with alerts on upcoming product reveals, in-store events, launches, and exclusive promotions
- Serving up tailored content based on your customers’ specific interests, preferences, and past buying behaviors
Did you know? The probability of selling to a current customer is around 60 to 70% higher compared to a new lead or first-time buyer.
As the retail industry starts to explore the full capabilities of ChatGPT, customers will benefit from a significantly improved customer experience (CX), while forward-thinking brands will reap the profit-boosting rewards of customer loyalty.
Writing code and performing technical operations
Earlier, we touched on the fact that ChatGPT can write, edit, and debug technical code. This ground-breaking level of automation will help retail business owners with minimal technical knowledge troubleshoot a host of simpler web or IT issues with ease.
Being able to request code will also help growing businesses reduce costs while maintaining well-designed, user-friendly online stores or websites. As a result, retail or eCommerce businesses will be able to reduce their operational costs while distributing budgets into brand-boosting initiatives like marketing, sales, or developing profitable partnerships.
ChatGPT: The challenges and limitations
“Accuracy will continue to be one of ChatGPT’s biggest obstacles. For us to confidently immerse ChatGPT into our workflows, it will need to become far more reliable.” —Aaron Kwittken, PRSA
While ChatGPT has the potential to impact the retail industry in a positive way, it’s also worth noting that wider adoption will come with its fair share of teething problems.
The challenges
First of all, there is some concern about the platform’s accuracy when it comes to conducting tasks and creating content or messaging. It’s certainly a powerful tool for boosting productivity and efficiency, but proceeding with some caution is advised.
If you’ve requested a piece of email marketing copy on an upcoming promotion, having a human being to proof the final version for consistency, tone, or glaring messaging errors before signoff is essential.
Some security concerns have also been raised about the platform, with cyber attackers infecting systems with malicious inputs. There have also been instances where ChatGPT was used to spread fake news, propaganda, and misinformation, which can be very damaging to a brand’s reputation.
The limitations
Yes, ChatGPT is powerful and versatile in equal measure. But, like any emerging piece of technology, it does have its limitations. These include:
- It can’t always provide responses in the right context
- It can struggle to process larger or more complex pieces of content
- It can only multitask to a certain degree; too many commands can make the platform crash
- It can lack a certain level of emotional intelligence, making some communications nonsensical or unempathetic
- It can’t operate to its full capabilities without a little fine-tuning or human input from time to time
Knowing ChatGPT’s inherent challenges and limitations will give you the tools and knowledge to use it in a mindful and balanced approach. ChatGPT is best when it’s used to complement your strategies and initiatives rather than taking them on in full. Focus on developing a harmonious partnership between human and robot, and you could reap great rewards.
Final thoughts
In a few years, artificial intelligence virtual assistants will be as common as the smartphone.”—Dave Waters
Whichever way you look at it, ChatGPT is making waves in the retail industry right now. With so many potentially useful functions, it can serve to greatly improve your productivity and efficiency.
Take the time to consider your business’s specific goals to decide where ChatGPT can fit into your strategy. Using the platform sparingly and scaling up usage over time is likely to yield the best long-term results. Refer to these key points, and you’ll be able to navigate your way to ChatGPT success.
We wish you the best of luck, and for more business-boosting advice, read all about our essential mobile app engagement tips.
