In a single week, Dick’s Sporting Goods, Ulta Beauty, and Home Depot each launched AI-powered customer experiences. The strategic question isn’t whether to match them, it’s whether the investment will produce returns your customers actually want.
The data suggests caution. Forrester research cited by Chuck Gahun, who leads the firm’s digital business and strategy practice, shows 85% of consumers find AI answer engines helpful, but only 71% trust the answers. Adoption drops the closer customers get to a transaction, and few transactions happen inside AI app experiences at all.
That gap between helpfulness and trust is where the strategy lives. Three principles separate the brands getting it right from the ones chasing a buzzword.
Define the use case before the technology.
“Where businesses are being successful with this is being very deliberate about what value they’re trying to gain by targeting very specific use cases,” Gahun said. Hospitality brands are using AI to match customers to vacation packages; retailers are using it to streamline returns. Generic deployments fail. As Shashi Bellamkonda, principal research director at Info-Tech Research Group, put it: “The best AI is used where you and I don’t even know that AI was used.”
Build for adversarial users from day one.
Customers will test the limits, and AI doesn’t know when to ignore an unreasonable request. Taco Bell’s AI drive-thru reportedly crashed after a customer ordered 18,000 cups of water-a viral incident that traces back to insufficient scope constraints. The risk extends beyond mischief: Gahun flagged agentic security concerns, including malicious inputs designed to corrupt organizational data. Guardrails are not optional.
Recognize where customer trust actually sits.
Consumers trust first-party experiences more than third-party platforms like ChatGPT. They’ll use third parties for discovery, then move to a brand-owned environment to transact. Traffic from third-party platforms is declining across multiple brands, but Gahun noted the conversion picture is stronger than it looks: “Consumers that are coming through and basically go from ChatGPT to the brand-owned environment are converting, essentially, at a higher rate.” Bellamkonda added that customers remain reluctant to enter credit card information on AI platforms-and forcing that behavior is the wrong investment.
The brands betting on first-party AI aren’t winning because of the technology. They’re winning because they picked a defined problem, anticipated misuse, and met customers where trust already exists. Get those three right, and customers won’t need to be sold on the AI. They simply won’t notice it’s there.
ref: https://www.customerexperiencedive.com/news/pros-cons-adding-ai-first-party-experiences/818487/
