Happy Friday! ‘This week in CX’ brings you the latest roundup of industry news.
This week, we’re looking at what is currently causing chaos for online merchants, recent CS usage of AI chatbots, and further consumer usage of generative AI.
Key news
- At Enterprise Connect, Zoom announced its biggest news of the year with Zoom Workplace, the company’s AI-powered collaboration platform and new AI Companion expansions which include Ask AI Companion and AI Companion in Zoom Phone. These innovations mark a significant step in Zoom’s bold rebrand, announcing 40 new innovations to reflect Zoom’s broader shift to becoming an AI-powered workplace platform
Majority of Online Retailers Leave +40% of Chargebacks Undisputed, Contributing to Lost Revenue and Eroding Profits
Riskified unveiled ‘Chargeback Challenges and What You Can Do About Them: Global Insights 2024’, a survey conducted in partnership with Paladin Fraud of over 300 ecommerce chargeback managers worldwide. This explores how the rising rates of chargebacks are causing chaos for online merchants and eroding profits.
The survey reveals significant and avoidable revenue losses for businesses at a time when the economic backdrop continues to be unstable and many are fighting for survival, prompting merchant respondents to highlight the need for AI and automation to improve some or all of the process.
Chargebacks serve as a mechanism for cardholders to dispute purchases with their payment issuers instead of a merchant, often leading to the rightful reversal of the transaction by merchants. Although intended to protect consumers, there’s a growing trend where this process is being exploited by unethical shoppers to reclaim funds through deceptive means. The cost and complexity of managing disputes, combined with the sheer volume of claims – three in four Americans and Brits filed a chargeback last year (Justt) – has created chargeback chaos. Merchants are losing essential revenue as a result.
Key findings from Riskified’s Chargeback Challenges report include:
- Chargebacks are on the rise with 76% of chargeback managers seeing as many or more chargebacks year over year.
- Merchants are electing to let revenues slide, with nearly 60% leaving at least two in five chargebacks undisputed.
- Reversal of sale is just the tip of the iceberg – 55% of merchants find that their current chargeback management process is too time-consuming, complex, and manual, adding to cost drivers and profit erosion.
- ‘Friendly fraud’ is a key part of the problem, with more than 73% saying that at least 20% of their chargebacks are first-party fraud, making it trickier to dispute.
- Over 65% of merchants want AI and automation for some or all of the chargeback management process to help recover more revenue and increase efficiency.
Chargeback claims started trending upward during the COVID pandemic, as online shopping boomed and customers looked to recoup funds without leaving the house or having to navigate merchant customer service. As this pattern continued beyond the pandemic, the way merchants manage chargebacks and the process to collate evidence to dispute fraudulent claims has failed to evolve at the same pace, resulting in highly manual processes, technical and data silos, and bureaucratic burdens that all exacerbate challenges and add to the cost of chargebacks beyond the reversal of sale itself.
65% felt automation and the use of artificial intelligence to streamline some or all the processes would make the biggest impact, and half want to consolidate disparate platforms and manage all chargebacks from one centralized platform.
Half of UK adults are using AI chatbots for customer service
Data analysed by the customer experience experts at CX Network has found that around a third (34%) of adults said they had used AI (artificial intelligence) chatbots in the past month. Among those, the most reported uses were customer service (50%).
Older adults aged 70 years and over were the most reported age group having used chatbots for customer service (63%) and advice (28%). Whereas younger adults aged 16 to 29 years were most reported as having used AI chatbots to ‘try it out’ (58%) and for entertainment (29%).
Under a fifth (16%) of UK businesses are currently using AI technologies. This data is supported by CX Network’s research report Artificial Intelligence for Customer Engagement which found that 56% of APAC organisations are yet to deploy AI for customer engagement, highlighting that businesses have room to discover the benefits of AI for customer engagement through unfilled potential.
“When trained using generative models, your virtual assistants and chatbots will become more contextually aware and will be able to interact with customers in a more human-like way. This, in turn, will unlock CX benefits like faster issue resolution for support cases and improved customer satisfaction.
“As CX professionals increasingly embrace generative AI, the importance of using it ethically and responsibly cannot be underestimated. Transparency, privacy and human oversight are essential every step of the way to maintain continued trust with customers. Despite the cautions, CX leaders have every reason to be excited about the way generative AI stands to revolutionise our field”.
–Andrew Carothers, senior CX leader at Cisco
Consumer usage of GenAI
Forrester has published a new report ‘The State of Consumer Usage of Generative AI, 2024’ which reveals how consumers are using genAI (including which tools), consumers’ perceptions of genAI and how genAI usage in the UK/Europe compares to the US.
AI is not new, however genAI has made AI visible in consumers’ daily lives. While companies race to incorporate AI internally and externally, consumer adoption is still in its infancy. Consumers are apprehensive: although they see the benefits of genAI, they worry about its ethical implications. This report reveals consumers’ current genAI usage and attitudes. Key findings in the report include:
- US consumers are ahead of those in the UK, France, Germany and Italy due to sluggish regulations. In December 2023, 34% of US consumers said they had used genAI, compared to 27% of UK consumers and 25% of French consumers.
- Large language models (LLMs) dominate genAI usage, with use focused on search-related tasks. In the US, UK & France, 28% of consumers say they have used ChatGPT, 17% have used My AI Chatbot (Snapchat), 10% have used Bing Chat, 7% have used OpenAI’s DALL-E and 4% have used GitHub CoPilot.
- Early adopters of genAI are more likely to be younger, male and more highly educated. Almost half of Millennial and Gen Z adults in the US, UK and France have used genAI, compared with only 12% of Baby Boomers. Similarly, 37% of men and 40% of those with a graduate degree have used genAI, compared with 22% of women and those with a secondary education or less. As such, Forrester forecasts that genAI will most influence knowledge-worker jobs.
- Consumers lack trust in genAI’s output quality and use by companies. In the US, UK & France, only 29% agreed that they would trust information from genAI.
- Consumers are split about how genAI will impact the future. Although 39% of US, UK and French consumers agreed that genAI would make life easier in the long term, 45% agree that genAI poses a serious threat to society.