Navigating the AI Retail Revolution 

The retail industry is experiencing significant benefits from artificial intelligence (AI) technology advancements.

AI’s capacity to analyze vast datasets enables tailored product offerings and marketing strategies, resulting in highly personalized customer experiences and a more engaged workforce. However, effective implementation requires trust and transparency from leadership, along with change management protocols to help employees use AI as a complementary tool to support their decision-making.

Transparent management regarding AI implementation and clear communication in addressing employees’ apprehensions is pivotal in building workplace trust and acceptance of AI. Sharing a coherent vision of how technology will influence the future of work is crucial to help employees grasp the potential benefits and opportunities. Involving employees in redesigning work processes — and valuing their input — will maximize AI’s effectiveness and impact. This inclusive approach fosters a sense of ownership and engagement among employees and ensures that AI integration aligns with the organization’s goals and values.

Optimizing work processes

According to Mercer’s 2024 Global Talent Trends, “too much busy work” ranks among the top three factors negatively impacting workplace productivity. By relieving employees of repetitive tasks, such as data processing, AI frees up time for them to focus on creativity, empathy and critical thinking — essential components of retail customer service.

This shift redefines the potential productivity achievable in a workday and offers employees a renewed sense of significance in their roles. Mercer's research also reveals that executives anticipate a 58% increase in job satisfaction with the integration of AI technologies. By combining AI’s precision with the warmth of human interaction, businesses can unlock their full organizational potential to drive efficiency, deliver superior customer experiences and maintain a competitive edge.

Further findings from Mercer’s research on Inside Employees' Minds: AI Attitudes indicate that employees’ view of the influence of technology on their roles is generally optimistic. Specifically, 51% of employees believe emerging technologies will enhance their job performance by increasing efficiency and effectiveness. Despite this optimism, certain employees have apprehensions regarding technological advancements. Approximately 41% voice concerns about the potential impact of new technologies on their job security over the next five years. The successful integration of AI into the workplace hinges upon fostering trust and garnering employee acceptance.

In a recent case study, Oliver Wyman — like Mercer, a Marsh McLennan company — examined the use of generative AI (Gen AI) in analyzing retail store reviews, focusing on sentiment analysis and store-level reporting. While humans may take weeks to identify correlations, the study found that the Gen AI model reduced reporting time to hours. Using AI to analyze Google reviews, Oliver Wyman identified key customer needs influencing sentiment at both the store and regional levels.

Oliver Wyman’s approach also included the experiences of employees in understanding and addressing store-specific challenges. This combination of AI and employee input enabled more nuanced sentiment analysis, capturing human context and identifying specific high-impact issues at the local level. 

Augmenting human decision-making

By empowering employees with insights into customer preferences and concerns, this tailored approach promotes proactive customer satisfaction efforts and enhances employee skills in working with AI. It also showcases the company’s dedication to involving employees in the AI journey, fostering trust through transparent communication and data-driven decision-making and ultimately contributing to employee development.

By leveraging Gen AI in human resources processes, organizations can improve performance feedback and candidate searches and also measure employee satisfaction. The key is to leverage Gen AI for its language skills and to augment human decision-making without involving AI in high-risk applications. This approach ensures that AI is a complementary tool that enhances human decision-making rather than replacing it entirely. Instead of being a threat to job security, AI is a supportive technology.

Addressing the challenges associated with AI implementation is crucial. Organizations must provide training and support employees to create sensible and intuitive human processes alongside AI technology. As shown in Mercer’s 2024 Global Talent Trends, one of the top three investments that have significantly improved workforce productivity is employee training and upskilling/reskilling. This empowers employees to collaborate with AI systems and manage their outputs effectively. Providing proactive communication and training and demonstrating how AI complements existing skills can help gain employee confidence and acceptance.

Leadership’s role

  1. Promote fairness in wages and technology
    Communicate to employees that the organization considers their economic needs and treats them as co-pilots and not merely as passengers on the journey toward Gen AI success. Support employee–employer collaboration throughout Gen AI adoption to give workers a voice to express concerns and provide input on integration processes.
  2. Provide flexibility and protection
    As Gen AI automates repetitive tasks and empowers employees to focus on more human aspects of work, employers can offer greater flexibility for workers, such as more part-time work or flexible structures.
  3. Deliver on health and well-being
    Throughout Gen AI adoption, recognize the importance of holistic well-being by promoting physical and psychological safety and work-life boundaries, and avoid creating an environment where employees are expected to work more while getting less.
  4. Drive diversity, equity and inclusion
    Take particular care to ensure that the AI transformation’s benefits and drawbacks do not fall disproportionately on specific groups of people. List employee concerns throughout the transition, and be aware of potential inequity as workforce structures shift and some employees find themselves displaced or required to reskill.
  5. Foster employability and a learning culture
    Democratize upskilling and reskilling opportunities through Gen AI by providing accessible and continuous learning for the entire workforce.
These five principles propose a series of metrics and reporting guidelines to galvanize commitments into action, including providing upskilling and reskilling programs and flexible work options, ensuring pay equity, and providing competitive wages. 

Improving shopping experiences

One retail company known for its extensive network of physical stores has implemented AI technology to simplify repetitive tasks, thereby freeing employees to focus on personalized customer interactions. For example, the company is using AI systems to automate inventory management, which ensures products are always in stock for customers. This has drastically reduced time spent on manual inventory tracking or searching for items in the back of the store. As a result, employees can spend more time assisting customers directly, meeting their needs and addressing their concerns.

In another example, Oliver Wyman used Gen AI to analyze product hierarchies and offer cross-category recommendations for a leading retail corporation with various stores. The goal was to enhance personalization by suggesting new categories to customers, thus expanding their choices and boosting upselling. The company automated cross-category recommendations using Gen AI, empowering employees to assist customers efficiently. Through chain-of-thought prompting, this AI explored product categories and made connections. Integrating AI into workflows enabled more tailored recommendations based on customer preferences and purchase history, resulting in highly personalized suggestions and improved shopping experiences.

Effectively implementing change

The successful integration of AI in these companies underscores their dedication to effective change management, thus inspiring employees to trust executive decisions about AI implementation. Transparent communication and comprehensive training programs have informed employees about AI’s benefits, emphasizing its role in enhancing rather than replacing their jobs. This proactive approach to change management has eased employee concerns and fostered a culture of innovation and continuous improvement.

Building employee trust in AI adoption requires transparency, engagement and upskilling. By prioritizing these elements and addressing AI-related challenges, companies can foster a positive environment in which employees embrace AI to enhance business performance. Collaboration between employees and management is pivotal for successful AI integration, resulting in a more productive and innovative workforce and more satisfied and loyal retail customers.

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