Study: 71% of SG retailers fear impersonal shopping experiences due to AI

Retailers in Singapore are anticipating a significant transformation led by AI-driven customer engagement. In fact, an overwhelming 93% of Singapore retailers believe that AI will become a core function in retail in the next five years. 

However, 71% of Singapore retailers fear that AI-powered chatbots will in turn result in more impersonal shopping experiences. This is according to a recent study by Twilio. 

In the next five years, 70% of Singapore retailers anticipate that there will be unlimited use cases for AI in retail. These use cases include personalising customer experiences, inventory management and even supply chain optimisation.

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This reflects a growing recognition of AI's potential to revolutionise various aspects of retail, both online and offline, according to the study. 

However, as AI deepens across the industry there is a fear of impersonal shopping experiences. As such, retailers must learn to navigate the balance between scalability and personalisation. 

According to the study, delivering tailored experiences to a broad audience is essential. This is especially since customers have rising expectations for brands to deliver personalised experiences and in some instances, hyper personalisation. 

To address this need, nearly half (45%) of retailers are prioritising customer data to maintain personalised engagement. 

“As more retailers employ AI throughout their business, they have to anchor their strategies and operations in transparency and demonstrate how they will use the data responsibly and ethically. This includes communicating their data policies clearly, informing their customers about how their data is being collected, and providing them with mechanisms to exercise privacy rights," said Nicholas Kontopoulos, vice president of marketing, Asia Pacific and Japan at Twilio.

"Brands will also need to demonstrate how data is used to create tangible value and integrate their data to unlock deeper insights and deliver truly personalised experiences,” added Kontopoulos. 

As for consumers, financial infrastructure platform for businesses Stripe revealed that 80% of Singaporeans believe that AI will make purchasing online easier. 

Consumers in Singapore also see the most potential for AI to add value in payments through preventing fraud and scams (57%), recommendation on deals (45%) and resolving purchase through AI-enable chatbots (40%). 

In addition, the research found that majority of Singaporeans expect that the future of retail will become more borderless, with 77% of Singaporeans thinking that buying products and services online from international sellers should be simpler than it currently is. 

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