AI threatens SaaS platforms in Aotearoa retail sector

The year 2024 may witness the demise of most software as a service (SaaS) platforms, especially in retail, as the demand by Aotearoa New Zealand consumers for speed, convenience and experiential shopping escalates, according to eCommerce integration specialists Convergence.

Mark Presnell, Managing Director of Convergence, voiced his concerns stating that the invasion of artificial intelligence (AI) could transform the shopping experience beyond recognition and endanger the relevance of SaaS solutions.

Presnell's apprehensions stem from the limitations that SaaS platforms face in providing best-in-class functionality throughout the retail journey. He criticized the generic capability of most SaaS systems stating, "One key issue is the generic nature of many functions, which you get from trying to be everything to everybody.

"For example, the ecommerce recommendation algorithm is essentially 'dumb'," he said.

Explaining his point further, Presnell said, "If a customer buys sneakers, the system might recommend another pair rather than suggest complementary products like socks."

According to him, the way forward lies in leveraging more intelligent integrations.

Presnell advocated the exploration and application of "best-of-breed third-party engines utilising artificial intelligence" to revamp the customer experience comprehensively. Such AI applications can make informed customer recommendations not just by examining their buying and search history, but also by taking into account the retailer's promotional strategy and inventory availability.

However, he cautioned against an exaggerated dependency on automation, highlighting the importance of the human factor. "Use technology to empower your staff with knowledge and insights about the customer's needs and preferences. While AI can provide valuable information, the human touch at critical points can significantly improve the customer experience," said Presnell.

Presnell suggested that retailers should think about deeply integrating with platforms like Customer Relationship Management (CRM) systems to gather more extensive customer data over time. He promised that "knowing small details, like whether a customer is left-handed or right-handed," teamed with a blend of machine intelligence and human interaction, can result in a very personalised experience.

Following these insights, Presnell offers three tips for retail business owners and leaders. Firstly, harness customer data intelligently, adhering to privacy norms and respecting the customer's right to opt-out. Secondly, incorporate a robust CRM system that can work in tandem with AI services to provide a more tailored customer experience. Lastly, ensure a balance between automation and human interaction for a genuinely personalised experience.

The ultimate goal for retailers, according to Presnell, is to design a nuanced, customer-centric approach that harmoniously combines the best of AI, multiple best-of-breed solutions and human interaction. "This approach not only respects customer preferences and privacy but also builds lasting relationships, much like a tailor who remembers your name and preferences, providing a blueprint for success in a volatile and ambiguous world," he concluded.