AI is being looked at as a game changer which can beget better customer interactions across various channels, devices, and touch points. To humanize these interactions, brands are making contextual investments to drive human-like conversations, also known as Conversational AI. This juxtaposition of AI & human consciousness is leading to conversational interfaces similar to the ones used in Alexa, Google Home, and Siri. These AI powered devices are disrupting several industries, especially the retail space and are being increasingly used by consumers to research product information, deals, and compare competitor products. The technology helps customers interact with shopping websites and apps while providing a new capability for retailers to drive brand awareness. These step changes indicate that Conversational AI is soon becoming the new normal in retail and will play a critical role in influencing the customer along the purchasing journey.
Transforming shopping experiences through AI
Retail organizations should consider Conversational AI solutions to listen to their customers and ingest voice data to distill it into actionable insights. Retailers can induce artificially intelligent conversations and allow leads to interact with brands through apps and receive instant responses without any agent interactions. This capability can deliver not just template responses, it can now offer contextual human-like responses, and can learn over time. This has huge business consequences since it can impact the customer acquisition processes.
Awareness: Showcase products based on customer voice queries; optimize customer product search efforts by displaying products which match their unique interests and needs, analyze voice search trends and tendencies to know customer preferences and display products they want.
Consideration: AI-powered apps can provide recommendations more accurately and in real-time, it can take them to an FAQ page with customized information. Chatbots can handle more than a million conversations with the customer in a day and can suggest various products based on their past purchase history, likes, and needs.
Conversion: Bots can also boost conversions by automating up-selling and cross-selling processes. They can start a conversation with the user based on their profile and interactions, while offering value-added products and services which might interest them. Amazon generates 35% of its revenue from its AI enabled recommendation engine.
Customer care: The predictive analytics feature in conversational AI helps in forecasting product demands; this is used in customer care where user behaviors can be predicted to deliver proactive customer support through quick and relevant interactions.
Brand Advocacy: Conversational AI can strengthen brand connections with customers by giving redeemable offers which are personalized and by integrating allied services enabling varied opportunities to interact with the customer. These services can be movie booking or food delivery feature in messenger or gaming apps, the idea is to enhance the overall customer experience by blending utilities for effective brand recall. The overall experience through conversational AI plays a larger role in influencing a customer’s buying process and it has the potential to transform customers to evangelists leading to increased brand resonance.
AI - Driving a new wave of growth in retail
Retailers should adopt AI across the buying cycle to stay ahead of the curve and improve ROI. Japan’s SoftBank has deployed “Pepper” a humanoid robot to interact with customers and understand their emotions to greet them. It can be found in 140 stores and is increasing footfalls across all stores.
AI can also help in enhancing responsiveness by quickly adapting to competitors’ pricing and market demands. Retailers can now revamp prices based on parameters such as weather conditions, local festivals, events, and competitor activities. The technology is also apt in inventory replenishment; it identifies products which should be stocked up based on buyer tendencies and streamlines day to day operations.
The new entrants to the experiential retail space include facial recognition (to identify customers and inform store associates), augmented reality (to virtually experience any product), virtual fitting rooms (virtual experience of trying clothes without any physical tryouts), and apps for customers to gather product information within the store.
AI is bound to play a critical role in digitizing the retail space and should be an integral part of retail marketing strategies. While entering the new zone of engagement driven by AI, companies should keep in mind the need of Gen-Z who is going to be their next-gen customers. They are bound to invest more on experiences, rather than on products. Their shopping habits and social media behaviors should be understood to align their needs and traits.
AI is here to stay and by adopting conversational AI, retailers can assure better experiences, brand recall, while retaining their competitive edge in a thriving digitized retail marketplace. They should pin down the areas which need AI interventions and innovate new ways to engage customers, to remain relevant, to rake in revenue, and to ensure brand equity.