Unlocking the Future of Customer Care: How AI is Revolutionizing the Fashion Industry

As the fashion and luxury sectors prepare for the challenges of 2025, customer confidence and spending appetite are critical concerns. According to the Business of Fashion and McKinsey & Co., these factors are identified as the biggest risks to growth globally.

Shoppers are increasingly opting for lower-priced items, leading to a rise in dissatisfaction with the shopping journey. Research from the Baymard Institute reveals that 94% of e-commerce sites fail to meet at least one of five essential user experience criteria.

Investing in customer experience enhancements will be vital in 2025, with AI's role in streamlining the shopping process highlighted as a significant opportunity. The State of Fashion 2025 report indicates that 82% of customers prefer AI assistance in reducing research time for purchases. Furthermore, 86% of consumers who haven't used AI in shopping express interest in doing so.

The economic potential of generative AI is substantial, with McKinsey estimating it could contribute up to $275 billion to the operating profits of the fashion and luxury sectors.

AI-augmented customer care is a promising frontier. Zendesk, a customer service platform, has been enhancing online customer experiences since 2007, offering features like messaging, live chat, and AI-powered bots.

During a recent roundtable event hosted by BoF and Zendesk, executives from leading brands like Michael Kors, Walmart, and Ralph Lauren discussed the opportunities and challenges of integrating AI into customer care.

Recognizing Differentiating Factors for Premium Shoppers

AI-augmented care is effective where customers appreciate the scale of service, especially in e-commerce. However, luxury buyers expect a more personalized service, raising questions about the appropriateness of AI in high-end shopping experiences.

Signposting the Value Exchange for Consumers

To encourage customer engagement, businesses must incentivize data capture. A lack of incentives can lead to minimal engagement, as evidenced by a failed QR code test in physical stores.

Closely Monitor and Evaluate Consumer Readiness

Disclosure about AI usage in shopping is crucial for success. Brands must educate consumers, especially demographics like Baby Boomers, who hold significant purchasing power. Transparency can enhance trust and engagement.

Augment Workforce Roles with AI for Greater Productivity

AI is increasingly viewed as a tool for enhancing productivity rather than a threat to jobs. Employees are leveraging AI to streamline workloads, particularly in areas like AI-powered attribution, which traditionally required significant manual effort.

The integration of AI into customer service is reshaping roles, leading to the emergence of hybrid positions that blend technology understanding with traditional responsibilities. As AI tools become more accessible, their integration into various roles will be essential for future success.