How AI can help allay the labor shortage
By Ziv Fass, Package.ai
In an era marked by the most severe labor scarcity seen in recent times, retailers are confronted with the pressing need to devise new strategies for growth and scalability.
To meet this challenge, the urgency of integrating artificial intelligence (AI) into retail operations now transcends mere preference or limited application to logistics and delivery efficiency.
As reported by the U.S. Bureau of Labor, the retail sector in the U.S. faced a daunting figure of 829,000 unfilled positions as of last May. A study from October 2023 forecasts a potential exacerbation of this labor shortage, with over 62% of hourly workers considering leaving their jobs within the ensuing year.
This scenario jeopardizes not only the retail customer experience and operational efficiency but also significantly impacts profitability and overall business continuity. However, it also underscores the critical opportunity that the strategic adoption of AI solutions presents.
AI is a Strategic Imperative, Not a Choice
Contrary to pessimistic views, the deployment of AI in retail can be a game changer, enabling businesses to sustain or enhance service quality, capture greater market share and elevate customer satisfaction, if implemented correctly. However, AI is not a panacea. Consumer feedback on AI-driven customer services, such as chatbots, highlights a mixed reception; Statista reports that only 11% of consumers feel “very happy” with their AI interactions, while a significant portion remain dissatisfied due to the impersonal and often irrelevant responses of these AI systems.
Despite these challenges, the acute labor shortage and the specialized nature of retail demands (especially in delivery services) render the complete abandonment of AI and technological advancements unfeasible. Retail faces unique inquiries and service requests that often require intricate coordination beyond the capacity of individual customer service agents, particularly for significant or complex deliveries.
Humanized AI: The Key to Overcoming AI’s Retail Challenges
The solution lies in a synergistic approach that blends AI with human customer service, striving for a balance where AI solutions are tailored and “humanized” to offer personalized and contextually relevant interactions. This strategy involves leveraging comprehensive customer data across the sales cycle, CRM (customer relationship management) and fulfillment processes to not only improve service quality but also to identify opportunities for cross-selling and upselling even before transitioning to human interaction. Moreover, integrating logistics with customer experience (CX) functions simplifies processes, enabling efficient resolution of inquiries and adjustments to deliveries, enhancing the overall customer and service agent experience.
This harmonious integration of humanized AI has profound implications, particularly in addressing the pitfalls of failed deliveries, which are a notorious drain on profitability due to the incurred costs and negative impact on customer loyalty and retention. By ensuring accurate and timely delivery updates and facilitating real-time adjustments for complex deliveries, this approach not only optimizes operational efficiency but also significantly enhances customer satisfaction. This, in turn, fosters increased customer loyalty, positive reviews and a virtuous cycle of value creation.
The Road Ahead: Integrating AI into Retail’s DNA
For retailers facing the dual challenges of an historic labor shortage and evolving customer expectations, embracing a nuanced, integrated approach to AI and human customer service represents not just a strategic necessity but a transformative opportunity. This approach promises to dismantle the silos between logistics and CX, harness the power of comprehensive customer data and ensure a seamless transition between AI and human interactions for the most challenging cases, thereby mitigating the impacts of labor shortages and driving sustainable growth and customer satisfaction.

Ziv Fass is CEO and co-founder of Package.ai, a BrandSource vendor partner whose customer engagement platform has been a boon to furniture and appliance members. To learn more or book a demo, click here.