AI in Retail: How UK Retailers Are Transforming Customer Experience in 2025
March 11, 2025
Consumers today want seamless experiences that connect their digital and physical shopping journeys. A shopper browsing products on their mobile during their morning commute, adding items to their basket before getting distracted, expects to walk into your physical store later that day and have your team recognise them. They want you to know what they were interested in online and help them find those same items in-store.
For many UK retailers, delivering this connected experience remains challenging—and customers are noticing.
Recent research reveals a telling story: 71% of consumers feel frustrated by impersonal shopping experiences, and nearly half (49%) are walking away from brands due to poor customer service. In today's retail landscape, these disconnected experiences aren't just minor inconveniences—they're business killers, particularly as AI in retail and omnichannel CX become competitive necessities rather than luxuries.
The New Retail Reality
The retail customer journey has transformed dramatically. Today's shoppers move fluidly between digital and physical channels, expecting brands to keep up every step of the way. They want a personalised service that acknowledges their history, preferences, and needs—whether they're texting with an AI assistant, speaking with an agent, or standing in your store.
Personalisation in retail isn't just about using a customer's name in an email—it's about creating connected experiences across every touchpoint. Delivering this level of sophisticated omnichannel CX isn't easy, but innovative retailers are finding ways to transform these challenges into opportunities. Here's how they're tackling the biggest obstacles:
1. Meeting evolving customer expectations in a digital-first world
When customers reach out for support, they expect immediate assistance across whatever channel they prefer—voice, chat, social media, or in-store. The problem? Many retailers are still using legacy contact centre solutions that lead to disconnected customer journeys, long wait times and high abandonment rates.
In fact, 88% of companies now prioritise customer experience in their contact centres.
How retailers are solving this:
Forward-thinking brands are replacing outdated systems with cloud-based contact centre solutions that support true omnichannel engagement. By implementing intelligent routing, AI in retail applications, and real-time analytics, they’re creating consistent, frictionless experiences that feel personal regardless of channel.
2. Balancing Cost Pressures While Delivering Exceptional Customer Experience
With labour shortages, rising operational costs, and growing consumer demands, retailers are under pressure to do more with less. But reducing costs at the expense of customer service is a losing strategy that ultimately drives customers away.
How retailers are solving this:
Retailers are finding that efficiency and excellent service aren’t mutually exclusive. By strategically implementing AI in retail operations and workforce optimisation tools, they’re reducing costs while improving both agent productivity and customer satisfaction.
The numbers tell a compelling story: Gartner predicts that by 2026, conversational AI will reduce retail contact centre costs by £80 billion globally. Retailers investing in modern contact centre solutions with AI agents (or intelligent virtual agents) for routine enquiries are already seeing dramatic improvements in both efficiency and customer satisfaction.
By leveraging AI-powered automation, workforce optimisation tools, and cloud-based contact centre solutions, retailers can reduce costs, improve agent productivity, and enhance customer satisfaction.
3. Strengthening Customer Loyalty in a Highly Competitive Retail Landscape
With increasing competition from online retailers, discount brands, and marketplaces, customer retention is more challenging than ever. Today’s consumers expect brands to provide proactive, personalised engagement through seamless omnichannel CX—or they’ll switch to competitors who will.
How retailers are solving this:
The most successful retailers are leveraging customer data and AI-driven insights to create meaningful, long-term relationships. They’re implementing AI-driven personalisation, real-time customer sentiment analysis, and predictive customer engagement tools to make customers feel truly understood.
Business leaders recognise the impact: 69% believe deeper personalisation increases customer retention and loyalty, while simultaneously lowering acquisition costs. The message is clear—personalisation isn’t just nice to have; it’s essential for survival in today’s competitive retail environment.
4. Driving Sustainability and Innovation Through Technology
Consumers increasingly prefer brands that prioritise sustainability, ethical sourcing, and carbon reduction. However, according to McKinsey, outdated systems make it difficult for retailers to track, report, and optimise sustainability initiatives in ways that resonate with customers.
How retailers are solving this:
To keep up with the new customer expectations in the industry, retailers must move to cloud-based contact centres that offer real-time analytics, AI-driven sustainability tracking, and seamless integration with supply chain management. This allows brands to align with ESG goals while enhancing operational efficiency through AI in retail operations.
With 69% of CEO’s viewing sustainability as a key growth opportunity, the business case is clear. Technology that supports both omnichannel CX excellence and sustainability goals provides a competitive advantage that resonates with today’s conscious consumers.
The New CX Is Here—Powered by AI and Human Expertise
The future of retail CX isn’t about choosing between AI efficiency and human connection—it’s about bringing them together intelligently. To be successful, retailers must create environments where AI agents and human agents collaborate seamlessly to deliver effortless, personalised customer experiences.
The New CX is here. Retailers who embrace AI, automation, and cloud-based contact centre solutions will be best positioned to tackle rising customer expectations, build loyalty, and drive long-term success. This new approach to CX is helping retailers:
Create cohesive customer journeys across digital and physical touchpoints through unified omnichannel CX
Reduce costs while improving service quality with advanced contact centre solutions
Build deeper customer relationships through data-driven personalisation in retail
Drive innovation that aligns with sustainability goals using AI in retail operations
The retailers who thrive in this new environment won't be those with the biggest budgets or the most locations—they'll be the ones who most effectively combine technology and human expertise to truly understand and serve their customers.
The path to exceptional retail CX starts with a single step: reimagining what's possible when you put customers at the centre of everything you do.
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