Retail’s AI Revolution: Why personalisation is the game-changer 

Retailers are in a high-stakes sprint to harness generative AI, weaving it into every corner of the customer experience — because in today’s market, the battle for loyalty and revenue is won or lost on the frontlines of personalisation. 

Redundant suggestions, misunderstood needs, and unsatisfied customers - all symptoms of a retail industry struggling to connect with its shoppers. During a global survey at the end of 2024, approximately 64 percent of responding consumers reported preferring to buy from companies that tailor their experience to their wants and needs. 

A lack of personalisation can hurt businesses dramatically, and with increased online shopping trends, customer service agents are needed more than ever to provide personalised shopping experiences. Unfortunately, businesses are drowning in a sea of repetitive queries - resetting passwords, answering FAQs, and handling mundane tasks instead of helping customers find the right product or service they require. 

With £30 billion worth of click-and-collect orders set to take place in 2025, retailers are scrambling to fix this problem to meet surging demand. More retailers are now embracing AI to support them in achieving this. AI solutions are being implemented in various stages of the customer journey to provide personal recommendations and advice. As Deloitte noted in one of their recent surveys, “Fostering innovation through incubator programmes, partnerships with emerging brands, and a focus on AI-enabled products and services will be crucial for capturing consumer attention.” 

So, how are AI tools making a difference in helping personalise customer journeys on behalf of retailers? ‍

AI making customer support smarter, not harder 

For many retailers, AI-powered self-service portals and AI agents are enabling faster and more tailored support for shoppers. Implementing AI agents and chatbots isn’t just increasing efficiency, it’s ensuring a seamless process that feels personalised. A TalkDesk survey found that nearly 88% shoppers used AI technology in some form during the busy 2024 holiday season.  

A SellersCommerce study found that 91% of consumers are more likely to shop with brands that provide personalised offers and recommendations. To add, 80% of consumers are more likely to make a purchase when brands offer personalised experiences. When working in retail, that’s the difference between a shopper getting exactly what they need in minutes versus giving up in frustration and abandoning their cart. 

To help agents, many retailers have introduced AI-powered omnichannel support to streamline operations and enhance customer experiences. By integrating AI across multiple communication channels, emails, live chat, social media, retailers ensure customers receive seamless support no matter where they reach out. 

Omnichannel AI solutions not only reduce response times but free up human agents as well. AI allows agents to help customers find what they want – leading to increased sales and loyalty amongst customers.   

Brands nailing AI-powered personalisation. 

The UK’s leading arts and crafts retailer, Hobbycraft, turned to Freshworks’ omnichannel support to transform its customer service. Since implementing Freshworks’ solutions, the company has seen a 30% reduction in response time and a 25% boost in customer satisfaction. 

AI chatbots from Freddy AI Agent were able to answer up to 30% of questions, helping Hobbycraft free up agents to spend more time sharing their crafting knowledge. Another example was Dune London, a growing footwear and accessories retailer, who have had success with Freshdesk and Freddy AI – allowing them to deflect 40% of incoming tickets.  

Hobbycraft agents also felt more empowered to answer customer questions with 82% of tickets resolved at first contact. This meant faster responses as well as more meaningful interactions between human agents and customers.  

In addition to operational improvements, unifying communication channels and embracing AI has allowed Hobbycraft to shift to a hybrid work model. The result? A massive 90% employee engagement score. When employees are happier, customers feel the difference. 

Hobbycraft proves that smart investment in AI isn’t just about automation—it’s also about empowering employees and making personalised customer service feel easy.  

The Road Ahead 

Larger marketplaces such as Amazon have heavily invested in AI-powered systems that predict customer demand, position inventory where needed, and minimise stockouts.  

For CIOs and customer service leaders, 2025 presents itself as a key opportunity to integrate AI into operations, offering consumers a faster, more personalized and more enjoyable shopping experience. Retailers who adopt these practices will meet customer expectations and form an edge over competitors who fail to harness AI’s capabilities - at a time when customers are demanding more from their retail experience