Modern Retail+ Research: Prose, Fashionphile and The Clear Cut on how AI is reshaping the shopper journey

• Paul Michaux, co-founder and vp of digital product at customizable hair- and skin-care brand Prose. Prose’s AI-powered algorithms help develop custom products for shoppers based on their beauty needs.
• Kyle Simon co-founder and COO of The Clear Cut, a direct-to-consumer jewelry brand. The Clear Cut recently developed Eugenie, a proprietary AI engine built on years of internal sales and customer behavior data. Eugenie helps the GIA Graduate Gemologists that The Clear Cut works with to analyze inventory movement, regional preferences and pricing patterns, among other trends.
• Sarah Davis, founder and president of Fashionphile, a luxury resale platform. The company has been around for 26 years and has developed its own predictive pricing algorithms.

The pros and cons of using AI for customer service

Michaux: “Fifty percent of our customer service tickets are now done through AI. … AI is extremely [helpful] for a lot of basic e-commerce questions like, “Where is my order?” … While we keep the [CX] team very focused on really high-value tickets and really high-end, high-touch services, like explaining all of these unique formulas to the users or helping guide them through how to use the products for better results. It’s the combination of both that makes for a really great customer service offering.”

Simon: “We’ve really been able to unlock our gemologists’ [time] with [Eugenie]. That thing about human touch versus technical touch is very critical. Our average order value is around $30,000. People will come to us because they want to talk to the human, but we want those humans to scale. We’re able to retain better talent [with AI].I f you’re a gemologist and you’re considering where you want to work, and you want to service clients well and have those successful interactions, you want to be somewhere where you’re in a position to succeed. We want our gemologists to basically only look at diamonds and talk to customers and [to spend] the rest of their day taking care of it for them. And so, they’re not filling out paperwork, they’re not signing documents, they’re not organizing boxes of diamonds — all that kind of stuff is getting more and more taken care of [by AI].”

Davis: “At this point, for anybody to be answering [basic customer service questions] without total automation is just a waste. For a good chunk – I want to say 60% [of our CX questions], … the questions people are asking we don’t need a human to look at that. … But if I have a particular question that may be more complex, I want to talk to a human, or I want to talk to something that’s going to actually get me to the root of the question.

We [also] have personal shopping assistants. You call and get help, and in a world where all our competitors are going to bots and AI agents and people are so honored that a human is taking the time to have this conversation and to help them, even though they’re using [AI tools on the backend], it can really be a differentiator. We’re getting a lot of juice out of the fact that we’re picking up the phone old school. Like, who does that?”

How AI engines like ChatGPT are changing the shopper journey 

Davis: “We’re tracking our traffic from ChatGPT and other AI [sites], because we’re actually seeing [traffic] from other AI platforms, as well. And it’s really interesting, … SEO has been huge for us our whole lives, because it’s free. Just optimize your site well and make it useful, and then people are gonna use it … And in the last year-plus, we’re like, ‘There is an entire world now where I’m focusing on optimizing for these agents.’ [We’re asking]: ‘How are we putting information out so that ChatGPT and, again, other platforms are able to use it?’ And it’s so interesting because they haven’t monetized it yet. There’s not an ad platform, but it’s [likely] coming. 

[To optimize content] Chat GPT actually has [guidelines], in terms of, ‘Here’s how you can be helpful to us,’ and we’ve followed all of that.”

Michaux: “We definitely see this as a channel that’s growing, but it’s relatively small still versus the scale of our other channels. … But more importantly, what we see and what we’re getting really excited about is the mindset shift in the user. People used to search for, ‘What is the best shampoo for curly hair?’ Or, ‘What is the best shampoo or best treatment for my scalp?’ And now people are getting used to using AI as a way to create. … And we see a future where people are going to ask ChatGPT, ‘Make me a sulfate-free shampoo for my thick and curly hair, and I want this to smell like citrus,’ and to be very precise — and that becomes a product brief.

One of the challenges of AI is that there are a lot of new tools and a lot of new trends…We’re definitely going to work and test and iterate toward, ‘What does the Prose experience become, if we just let the user prompt us? What do they need, and what do they want?'”

Simon: “I think we’re all in agreement that it’s the future, and it’s fundamentally changing how brands will be discovered, and that’s really fascinating. In terms of actual strategies we’re learning, we’re in “let’s try to figure it out” mode. … We’re in more of a fact-finding stage. It’s really interesting because we [are serving prompts] to different platforms, like, ‘Where’s the best place to get an engagement ring in New York?’ And – I think it was on ChatGPT – we were never on the list. And so we [asked], ‘Why didn’t you mention The Clear Cut?’ And the [response was], ‘Oh, well, The Clear Cut is mostly known for selling online, and it is great technology, but you asked us where to go in New York.” We have a showroom in New York, but [ChatGPT] has bucketed us as a pure-play online brand. That’s an interesting learning — like, do we need to position ourselves differently [for AI engines]?”