Is Customer Service Innovation Always Preferable? The Impact of AI Technology on an Online Retailer’s Customer Service Decision

The online shopping consulting service (online customer service) is an important component of online shopping, and the rapid advancement of artificial intelligence technology has allowed online retailers to apply this technology to customer service. This study explores an online retailer’s customer service innovation decisions. We develop a stylized model to investigate an online retailer’s choices of two different online shopping consulting service strategies, as well as the impact of the different strategies on both online retailer and consumers. This study demonstrates that providing AI customer service with higher performance and higher probability of consumer shopping problem resolution may not always benefit the online retailer. Existing studies have already shown that consumers prefer human customer service. However, this study shows that consumers do not always prefer human customer service, and they prefer AI customer service in some situations. Moreover, this study reveals that the probability of consumers’ shopping problems being resolved and the consulting cost can affect the online retailer’s choice of online customer service strategies.