Salesforce is at the forefront of integrating artificial intelligence in retail. Nino Bergfeld, Director of Retail Advisory at Salesforce, shared insights on how AI is revolutionizing customer loyalty, personalization, and service in the retail sector.
Bergfeld, who resides in Munich, Germany, sat down for a one-on-one interview with Retail Insider during Salesforce’s Dreamforce event that was held last week in San Francisco.
AI Enhances Customer Loyalty Programs
In the interview, Bergfeld said that AI is transforming traditional loyalty programs. “Many existing loyalty programs incentivize behaviour that is already being shown,” he stated. Ineffective loyalty programs, according to Bergfeld, can eat into margins without driving new sales. AI-driven loyalty programs, however, can offer more targeted and valuable rewards, he said.
The future of loyalty, Bergfeld suggests, lies in creating seamless experiences across channels. He cites examples like Amazon’s Alexa, which simplifies reordering processes, fostering loyalty through convenience rather than discounts. “I’m loyal to Amazon because there’s Alexa and I just need to say, ‘Hey Alexa, please reorder the washing detergent.’ It’s so easy,” Bergfeld said.
AI-Powered Customer Service Builds Brand Affinity
One of the most significant impacts of AI in retail is in customer service. Bergfeld highlighted the example of Saks Fifth Avenue’s AI agent, Sophie, powered by Salesforce’s new Agentforce technology. The AI-powered assistant provides immediate, personalized service grounded in customer data for Saks customers.
“You get a much better experience driven and generated by AI,” Bergfeld explained. He contrasted this with traditional call centres, where customers often face long wait times and impersonal service. AI agents like Sophie can access store-level inventory, customer history, and other relevant data to provide swift, accurate responses, he said.
Bergfeld added, “If there would be no AI, you would be in a call center queue, you would have to press ‘one’ for existing orders, press ‘two’ for refunds, press three, four, press five if you want to speak to an agent and you’re in a queue.” This can cause customer frustration or even worse, a situation where a customer becomes so frustrated that any loyalty is lost. The AI-powered alternative offers a dramatically improved customer experience, he said.
Balancing AI and Human Touch in Retail
While AI offers significant benefits, Bergfeld stresses the importance of maintaining human elements in retail. “If you try to cancel out everything and automate with AI, that’s not going to work,” he warns. Instead, he envisions a future where AI empowers human staff, allowing them to focus on high-value interactions.
Bergfeld provides an example: “An AI agent could notify a store associate that a high-value customer is coming to pick up an order, suggesting items that might complement their purchase.” Such a fusion of AI efficiency and human expertise can significantly enhance the shopping experience, while also leading to increased sales with increased purchases.
He emphasized the importance of the human touch in retail, drawing from personal experience: “I’m from a retail household. My mother had a retail shop for 40 years. People came because they got counselling. My mother had had her little black book. She knew the desperate husband at Christmas showing up, what the wife needs.”
In more modern times, that black book would be replaced with an online CRM system — but the human touch is still critical, particularly in physical retail spaces. Looking to applications in retail, AI allows store associates to focus on more important tasks while also providing comprehensive and useful customer information in seconds.
The Global Adoption of AI in Retail
The pace of AI adoption varies globally, with cultural and regulatory differences playing a significant role. Bergfeld observes that European retailers tend to be more cautious, partly due to stricter data protection regulations like GDPR. In contrast, North American retailers are generally more willing to experiment with new technologies.
“Europe is regulating first and innovating second. The U.S. is innovating first, regulating second,” Bergfeld said, quoting a multinational CEO. The difference in approach impacts the speed of AI adoption in retail across regions.
Asian markets, particularly China, are leading in innovative AI applications in retail. Bergfeld points to platforms like TikTok, SHEIN, and Temu, which use AI-driven discovery and gamification to engage shoppers. These approaches contrast sharply with traditional search-based e-commerce models.
“If you look at TikTok, for example, or SHEIN or Temu, it’s discovery-based,” Bergfeld explains. “The TikTok algorithm decides in the first 1.8 seconds if you like the content. And if yes, you get served more.”
Challenges and Considerations in AI Adoption
Bergfeld highlighted several challenges retailers face when adopting AI technologies. Data integration, for example, is a significant hurdle. “Everybody in retail knows retail is very particular because you have so many data silos. You have store POS data, loyalty data, email marketing data, CRM data,” he said. Integrating these disparate data sources is crucial for effective AI implementation, he explains.
Transparency and trust are also key concerns. Bergfeld advocates for clear communication with consumers about AI use. “You have to be transparent with your consumers,” he states, suggesting practices like watermarking AI-generated content or clearly labeling AI-assisted communications.
The Future of AI in Retail
Looking ahead, Bergfeld said he sees AI playing an increasingly central role in retail operations. He described different waves of AI adoption, with the current phase focusing on autonomous agents capable of taking actions. Future developments may lead to fully autonomous retail operations, though Bergfeld suggests this is still considerably “further down the road.”
Gamification is another trend Bergfeld believes will shape the future of retail. Drawing inspiration from Asian e-commerce platforms and gaming worlds like Roblox, he suggests that future retail experiences might incorporate game-like elements to engage younger consumers.
“Those are the consumers of the future,” Bergfeld notes, referring to younger generations accustomed to digital interactions. He said he envisions a world where physical purchases might come with digital twins for use in virtual environments, adding another layer of value and engagement for tech-savvy consumers.
There are still unknowns of what AI will hold for the future of retail, particularly as it evolves. Bergfeld said retailers will have to balance innovation with consumer trust and regulatory compliance. The future of retail lies in creating personalized, efficient, and engaging experiences powered by AI but anchored in human understanding — Bergfeld’s insights highlight the transformative potential of AI in retail, from enhancing loyalty programs to revolutionizing customer service and creating novel shopping experiences. As the technology advances, retailers who successfully integrate AI while maintaining a human touch will likely lead the industry into its next era. And given how quickly things are changing with AI technology, that era could be here sooner than we expect.
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