The challenges facing the retail industry can be split into two distinct camps. First, there’s the wider macroeconomic challenges, such as rising business costs, inflation and weak consumer confidence. Then there’s the more unique issues surrounding evolving customer expectations.

Both present their own challenges, however there are steps retailers can take to ensure that they are avoiding the most common pitfalls leading to poor customer experience, says Michael Klein, Director of Retail Product Marketing at Talkdesk.

In today’s highly competitive world, it only takes one negative interaction for a customer to decide to shop elsewhere. This challenge is emphasised by the fact that consumers are now choosing to shop both online and offline. Not only is this blurring the lines from a customer service point of view, it also means that  across all touch points, customers want a positive and seamless experience.

Putting the customer first

It might seem like an out-dated phrase, but ‘putting the customer first’ has never been more important. This doesn’t just refer to offering perks to loyal customers, such as discounted delivery or extra points on a loyalty card, it involves brands completely rethinking customer experience.

This is where personalisation comes in. However, if a brand is working across multiple territories, and potentially liaising with tens of thousands of customers every day, how can it cater to the unique needs of every individual? The answer lies in AI.

Harnessing AI to power personalisation

Historically, many brands will have ‘made do’ with a combination of legacy systems. These might have been fit for purpose at one point in time, but as their customer base has grown and the nature of customer experience has become more complicated, this will likely have led to poor levels of service.

When a customer contacts a brand, they expect the service to be seamless. Agents working across numerous different systems or data silos will struggle to join the dots, with blind spots leading to interactions feeling disjointed and impersonal. This is where new technologies can make a big difference.

The introduction of both Generative and Agentic AI to the retail industry is already proving transformative, fundamentally changing how businesses engage with their customers. Alongside speeding up and improving the quality of customer interactions, early adopters are also reporting improved self-service and higher agent productivity.

Few things erode trust faster than being left on hold longer than anticipated, or being passed from department to department and having to repeat the same information. It only takes one interaction of this kind for a customer to become dissatisfied.

Leveraging Large Language Models (LLMs), AI tools allow contact centres to move beyond scripted responses and deliver experiences that feel genuinely tailored to the query or problem, helping to build trust and brand loyalty.

While the industry has been talking about ‘conversational commerce’ for some time, Generative and Agentic AI are finally allowing teams to deliver on its promises. Able to facilitate engagement through AI-based voice or text assistants and other social messaging apps, conversational commerce seamlessly connects customers.

Using natural language processing techniques, interactions with customers are turned into structured data that can be used to gain further insight around their expectations. Not only does this improve general customer understanding, it also allows for a more personalised level of service – potentially also unlocking upsell opportunities.

Technology in action

Achieving a personalised and ‘wow’ level of customer experience is something Swiss running brand, On, always strives to achieve. Selling its products in 55 countries around the world, On operates 7 customer service hubs across North and South America, Europe and APAC. On average, On’s 150 strong team of agents receive approximately 600 calls per day and are contacted via a range of different channels.

It’s therefore critical that On’s team of agents can instantly access all relevant information relating to each customer, without delay. We worked with On to implement a new customer experience solution.

The solution has allowed the brand to standardise the experience it offers, even when expanding into new markets, such as Japan, with new agents onboarded, at-home in less than three days. This sort of quality control is essential for a brand with global ambitions, ensuring consistency across all touch points.

Global platform for luxury fashion, Farfetch, faced a similar challenge, with service and quality issues creating unpleasant experiences for customers and agents alike.

Given that the brand connects customers in 190 countries with items from over 1,400 brands, boutiques and department stores, the need for a scalable solution was paramount. We worked with Farfetch, offering an AI powered solution that could scale as they did. One of the main benefits of this was again, to provide consistency. New agents felt well supported when interacting with customers, keeping them motivated in their role and improving overall productivity.

It’s not about choosing between tech and people, it’s about collaboration

The role of new technologies, such as AI, was a key discussion point at the National Retail Federation Big Show 2025. Despite what many might think, it’s not a case of choosing between technology and people. By shifting human resources from mundane to higher value activities, brands will be able to offer a far superior and highly personalised level of service.

The brands that can achieve this will be best positioned to navigate an increasingly complex landscape and deliver the types of highly personalised experiences today’s customers expect. By embracing this shift, forward-thinking retailers can build scalable and resilient CX strategies that thrive, amplifying human potential and ensuring that every customer journey is seamless and tailored to the unique needs of that individual.