The buzz around agentic AI is palpable, says Kim Johal, Retail Specialist at Infobip, with many businesses embarking on transformation journeys heavily focused on incorporating this technology.

While there’s broader talk of a potential AI bubble, agentic AI delivers clear efficiency savings and customer benefits and, as we navigate this new landscape, it’s crucial for enterprises that the adoption of AI in customer engagement is driven by clear business objectives – rather than being swept along in the frenzy.

Data enrichment & AI roadmaps

The UK retail sector is in the rapid but early stages of AI transformation, with most initiatives focusing on internal deployments before rolling out customer-facing applications. This cautious approach allows companies to master AI technologies and realise operational expenditure savings before extending these innovations to external channels. Typically, these initiatives align with broader 12-18 month transformation programmes, integrating AI as a key component rather than a standalone solution.

However, a significant challenge currently holding many retailers back is the fragmentation of data across multiple suppliers and systems. This siloed approach hinders the seamless flow of information between departments, limiting AI’s potential to deliver truly personalised experiences to customers.

As a result, a crucial part of any transformation programme needs to involve data enrichment and improved connectivity between various teams and data sources.

The power of agentic personalisation

Agentic AI holds immense potential for retail CX processes. By incorporating agentic tech into CX strategies, retailers can accelerate engagement and deliver tangible Return On Investment (ROI) in several ways.

This could be enhancing 1-2-1 customer conversations, using agentic AI to analyse customer data and create highly tailored interactions, addressing individual preferences and needs in real-time. It can also be deployed to build efficiency into customer service efforts, with AI-powered chatbots and virtual assistants handling routine inquiries 24/7, freeing up human agents to focus on more complex issues.

By processing vast amounts of data, agentic AI can transform predictive analytics, anticipating customer needs and behaviours and enabling proactive engagement strategies. Meanwhile, AI can ensure consistent communication to drive seamless omnichannel experiences, whilst supporting robust authentication processes, protecting both customers and retailers from fraud.

Tomorrow’s CX landscape

Looking ahead, the adoption of agentic AI in retail is set to accelerate dramatically.

Gartner predicts that “by 2030, conversationally driven automation will be part of everyday life.” Moreover, Gartner also states that “by 2028, 70% of customer service journeys will begin – and be resolved – in conversational, third-party [AI] assistants built into customers’ mobile devices.”

For customers, this shift towards agentic AI will result in more personalised, efficient and seamless shopping experiences.

They can expect instant responses, 24/7 and highly tailored product recommendations, based on their preferences and behaviours, as well as seamless transitions between digital and physical shopping environments and proactive support.  

Taming the beast

While the potential of agentic AI is clear, its implementation is not without challenges.

Retailers must address issues such as data quality and consistency, with Gartner predicting that “through 2028, at least 40% of AI projects will fail or flounder due to lack of quality and consistency of customer data.”

Additionally, concerns about security, job displacement and regulatory compliance need to be carefully addressed. Retailers must invest in education and training to ensure that their teams can effectively leverage AI technologies.

As we look ahead, it’s clear that agentic AI will play a pivotal role in shaping the future of retail. By focusing on clear business objectives and addressing implementation challenges head-on, retailers can harness the power of AI to deliver exceptional CX, drive operational efficiencies and reduce costs.