Artificial intelligence is transforming retail workplaces by automating tasks and boosting efficiency.

Artificial intelligence (AI) is reshaping workplaces by streamlining routine tasks and boosting efficiency, particularly in retail, where innovation is essential for maintaining a competitive edge. Beyond automation, AI supports employee creativity by offering valuable insights and allowing them to focus on innovative tasks. However, research is limited on how AI service quality impacts employees in retail industries, making this an important area to explore.

Researchers from Florida Atlantic University and Hanyang University in Seoul, South Korea, examined how perceived AI service quality influences retail employees’ innovation, job fit and job satisfaction. The study looked at system-related factors such as reliability and transparency, as well as interaction-related aspects such as responsiveness and empathy. Researchers also explored the moderating role of AI adaptability, a key feature that allows AI systems to adjust their behavior based on user needs, for its potential to enhance service quality.

Results of the study, published in the Journal of Retailing and Consumer Services, suggest that employees are more likely to engage in innovation when they perceive benefits from AI interactions. When AI systems demonstrate reliability and empathy, employees reciprocate with innovative behaviors. The study highlights AI’s role in service innovation, particularly in management’s strategic decision-making and operational scaling across retail industries.

Reliability strongly supports service innovation, emphasizing the need for consistent AI performance, whereas transparency does not significantly influence innovation. Surprisingly, responsiveness had an insignificant effect on service innovative behavior, challenging prior studies in which responsiveness is considered vital for enhancing customer engagement and real-time problem-solving.

In contrast, empathy had a strong and significant positive effect on service innovative behavior. Hence, AI systems capable of understanding and addressing users’ emotional and psychological needs can foster a more engaging work environment.

“Empathy in AI fosters trust and deeper connections, encouraging employees to engage in innovative behavior by making them feel supported,” said Sangbeak Ye, Ph.D., co-author and an associate professor in the Department of Educational Leadership and Research Methodology within FAU’s College of Education. “In retail, empathetic AI enhances job fit by aligning personal attributes with job expectations, leading to higher job satisfaction, reduced turnover and increased employee involvement. Employees who actively engage in innovative behavior feel more aligned with their roles because they can tailor their tasks to match their strengths and aspirations.”

Researchers also found that AI adaptability weakens the impact of system-related attributes (transparency and reliability) on service innovation, revealing complex interactions between system and interaction-related factors.

“Our research highlights the importance for managers to create work environments that promote innovation by enhancing AI service quality,” said Ye. “Focusing on reliability ensures AI can dependably assist with daily tasks, while boosting empathy in AI systems leads to more personalized and emotionally resonant experiences, inspiring employees to pursue new ideas. Furthermore, in dynamic AI-driven environments, attributes like empathy become even more vital in fostering employee engagement and creativity. Organizations that strategically integrate AI to support job customization and innovation can increase job satisfaction, making employees feel more connected to their work while improving service quality.”

For the study, researchers analyzed data from 290 retail employees, which spanned online retail and     e-commerce (28.6%), grocery and food retail (26.9%), apparel and fashion retail (14.8%), health and beauty retail (14.5%), electronics and appliances retail (11.0%), and finance retail (4.1%). Management-level employees comprised 62.8% of the sample, while 37.2% were in frontline roles.

Study co-authors are Suhyoung Ahn, Ph.D.; and JungKun Park, Ph.D., School of Business, Hanyang University.

-FAU-