Technologies like AI and GPT powered chatbots, have the potential to improve the retail space, by providing customers with personalized recommendations and customer service. In the fast-moving retail industry, GPT powered AI chatbots have played a major role in improving the customer experience resulting in improved sales and margin. And as a result of this, more and more retailers are now adopting these AI agents to be the intervention at key touch points in the customer journey. There is already a heavy adoption for conversational chatbots like ChatGPT and it is expected to increase exponentially with the release of GPT-4 model which is supposed to eclipse the performance of GPT-3 model by a very large margin.
However, as with any technology, there is a risk of abuse. Following are the key areas where the risk is at its highest:
- Lack of Personalization: While the GPT based chatbots can be used to provide quick and efficient responses to customer inquiries, they may struggle to offer personalized recommendations or understand complex customer needs. For personalization, extremely large and wide variety of data is required to bring in the personalization that is expected in retail industry as the customer base is simply huge. This could end up in a poor customer experience, leading to reduced loyalty and sales.
- Privacy Concerns: GPT Chatbots may collect personal data from customers in order to provide personalized recommendations or services. It could either be through direct interactions of via indirectly by reading the cookies, history and so on. However, this could raise privacy concerns and lead to customer distrust.
- Bias in Recommendations: GPT-based chatbots may be biased towards certain products or services based on the training data they were fed. For example, if the training engineer prepared data that had primarily products from one category, the chatbot will be biased towards that product or category and will start recommending in that manner only. This could result in unfair or inaccurate recommendations, leading to a poor customer experience.
- Technical Issues: Chatbots powered by GPT may experience technical issues or errors, leading to frustration and dissatisfaction among customers. This could result in a loss of sales or a damaged reputation for the retailer. Chatbots sometimes end up loss of context or into a loop where a non-technical person may struggle to reset/restart the conversation with the chatbot. This can be a frustrating experience for the customer and a painful experience for the retailer.
- Job Losses: The use of AI agents using GPT powered chatbots in retail may lead to job losses for human customer service representatives. This could have negative impacts on local economies and could also lead to reduced customer satisfaction if the chatbots are not able to provide the same level of service as humans.
- Inability to Handle Complex Customer Issues: GPT-based chatbots may struggle to handle complex customer issues or complaints, leading to frustration among customers. This could result in negative reviews, lost sales, and a damaged reputation for the retailer. The negative reviews has the potential to damage the portfolio and future sales as well.
- Lack of Emotional Intelligence: Chatbots powered by GPT are unable to understand human emotions and respond appropriately, which could lead to misunderstandings and further frustration for customers. Chatbots can never replace human interactions as the chatbots may not really pick up on the emotional quotient of the customer and this could impact the sales and dropout numbers also.
- Data Security: Chatbots may collect sensitive customer data such as credit card information or addresses, making them vulnerable to cyber-attacks. If this data is compromised, it could result in financial losses for both the retailer and the affected customers.
- Limited Flexibility: GPT-based chatbots are limited to responding within their programmed capabilities, which may not always align with the needs or preferences of customers. A Chatbot even though we call it Artificial Intelligence, it will have very specific paths and boundaries of operation. And any discussion or query beyond this will result in the Chatbot being not able to respond back as expected. This could lead to dissatisfaction and lost sales.
- Dependence on Technology: Retailers who rely heavily on chatbots powered by GPT may become overly reliant on technology, leading to a lack of human interaction and a diminished understanding of customer needs and preferences. This could result in a decrease in sales and customer loyalty over time.
To mitigate these risks, it is important for companies to use AI and underlying GPT models in a responsible and transparent manner. This includes, implementing safeguards to protect customer privacy, ensuring that the GPT model is used in a way that benefits customers, and providing clear disclosures about its use in the shopping experience. Additionally, companies can invest in training their employees to use AI and it’s underlying GPT models in a way that prioritizes customer interests and to intervene when AI-powered interactions may be inappropriate or potentially harmful. To safeguard against the potential misuse of chatbots powered by GPT in the retail industry, companies should take the following measures:
- Be Transparent: Companies should be transparent about the use of chatbots and the data they collect from customers. Accurate information on what data is collected and how it will be used have to be conveyed to the customer prior to collection so that those who are not interested can opt out of this if they wished to.
- Train Chatbots Ethically: Retailers should ensure that the chatbots they use are trained ethically and without any bias. This can be done by using diverse and representative training data, and by regularly monitoring the chatbot’s performance to identify and correct any issues. The preparation of training data has to be done with specific care to ensure that the recommendations are as accurate as possible without any bias.
- Provide Human Backup: Companies should provide human backup support for chatbots to handle complex customer issues and complaints. As previously mentioned, a chatbot has a limitation when it comes to human emotions and when the boundaries of operation is met, a fallback option of human customer support is very much required. This can help to ensure that customers are satisfied and that their needs are being met. This will also go a long way in ensuring the customer loyalty due to the personal connect.
- Prioritize Data Security: Retailers should prioritize data security by implementing robust data protection measures to ensure that customer data is not compromised. In the current world where data is of the highest value, there will be hackers who are trying to breach the security walls and get the customer data. Companies should adopt the principle of secure by design where in from the requirement phase itself, focus is put into data security. This can include encryption, secure data storage, and regular security audits.
- Foster Customer Trust: Retailers should work to foster trust with their customers by providing clear and honest communication, high-quality products and services, and responsive customer service.
- Continuously Improve: Companies should continuously monitor and improve their use of chatbots in the retail industry by collecting customer feedback and using this information to make informed decisions about how to improve the chatbot’s performance and customer satisfaction.
The above list is not conclusive and there are many more areas where Retail companies could focus on to ensure the risks are minimized to the very minimum. Many leading software development firms have come forward in collating their own guiding principles and responsibilities to be followed while developing an AI based solution which includes a chatbot. These principles laid down can be followed to ensure the AI powered products do not cross the boundaries intentionally set for them. Sharing few of the very principles published by market leaders in AI below:
· Google — https://ai.google/principles/
· Microsoft — https://www.microsoft.com/en-us/ai/responsible-ai
· Facebook — https://ai.facebook.com/blog/facebooks-five-pillars-of-responsible-ai/
I hope this article have provided you with good insights on the dark side of AI chatbots and the path ahead for creating and maintaining AI powered solutions in an ethical manner.
