Best Buy is introducing an artificial intelligence (AI)-based delivery tracking system that promises up-to-the-minute updates.
The company is looking to satisfy customers who are increasingly frustrated with vague delivery windows and limited order transparency. Experts say the move comes as the e-commerce sector grapples with rising consumer expectations for delivery transparency and efficiency.
“Over 30% of global consumers are open to AI-driven order and delivery updates – demonstrating the immense potential value of the technology behind Best Buy’s new feature,” Krish Iyer, vice president of industry relations and partnerships at shipping software company ShipStation, told PYMNTS. “When customers know exactly when their package will arrive, it reduces their anxiety and builds trust. This is critical for large or high-value purchases that require someone to be present for delivery.”
Best Buy’s new system, which will roll out nationwide, uses real-time data and predictive analytics to provide customers with detailed delivery updates. “We use data such as forecasted demand and real-time traffic patterns to reduce delivery times, optimize our routes and ultimately provide customers with live, up-to-the-minute estimated arrival times,” Best Buy said in its announcement Thursday (Aug. 15).
According to a PYMNTS Intelligence study conducted in collaboration with Adobe, consumers abandon their online shopping carts an average of eight times per month while browsing brand websites.
Changing consumer expectations
Retail has been moving toward more transparent delivery systems for several years, driven by innovations in the grocery and ride-sharing sectors. According to Iyer, research conducted by ShipStation found that 80% of global consumers now want at least four delivery updates per order, with 38% wanting daily updates with detailed location information.
Many retailers struggle to meet those expectations. ShipStation’s research found that two-thirds of retailers fail to provide basic updates, such as a simple “shipped” notification, Iyer told PYMNTS.
Implementing AI-powered tracking systems brings several technical challenges. According to Ed Clarke, founder of logistics company Yojee, customers’ perception of drivers’ routes is a potential problem.
“Sometimes it can appear as if the driver is moving away from the customer and heading to another stop first,” he told PYMNTS. “This can inadvertently create a poor customer experience and trigger unnecessary calls to customer service – even though the AI has already determined that the delivery window will be met.”
Data integration across multiple systems represents another hurdle.
“Companies need to ensure the accuracy of their AI models and ensure that the data ‘communicates’ between the various systems in the retailer’s technology stack,” Iyer said. “The tracking data is only as good as the inputs and behaviors themselves; that is, a person executing the order on time and scanning at the points where the order is generated and picked up.”
Hemanth Holla, senior director of supply chain at Tredence, said the potential impact of AI tracking goes beyond customer satisfaction.
“AI-powered live tracking has the potential to transform last-mile delivery in retail,” Holla told PYMNTS. “By leveraging real-time data on traffic, weather and other external factors, companies like Best Buy can dramatically reduce variability in delivery times and provide customers with near-instant updates.”
Holla also pointed to broader implications: “In addition to improved customer satisfaction, this can also increase supply chain efficiency through AI-driven dynamic resource allocation. The impact of the technology extends beyond logistics and influences customer behavior and purchasing decisions in both e-commerce and brick-and-mortar stores.”
Influence customers
The technology’s impact could extend beyond logistics, potentially influencing consumer behavior and purchasing decisions in online and brick-and-mortar retail. “It could even lead to larger purchases, especially online, as people feel more confident in planning delivery time windows,” Iyer predicted.
By implementing this new system, Best Buy joins many retailers testing AI applications in their operations. Amazon, for example, has been using AI for years to optimize its vast logistics network, while Walmart has implemented AI-powered inventory management systems.
Read more: AI is at the heart of the tug-of-war between Walmart and Amazon in retail
The move also comes as retailers grapple with shifts in post-pandemic consumer behavior, ongoing supply chain disruptions and increasing competition from e-commerce giants. Innovations in shipment tracking could provide a competitive advantage.
“AI-powered live tracking is not just a nice-to-have feature, it’s becoming commonplace,” said Iyer. “Brands that leverage this technology will have a significant advantage in customer retention and increasing sales.”
Holla said technology will be a driving force for innovation in retail.
“AI-driven live tracking represents a transformative advancement in logistics and sets new standards for customer service and operational excellence in the retail sector,” he said.
