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The Conversational AI market size globally is projected to expand from $4.8 billion in 2020 to $13.9 billion by 2025. Key factors contributing to this growth are the growing demand for omnichannel deployment, low chatbot development cost, and AI-driven customer support services. Moreover, the rising integration of innovative AI capabilities and growing customer engagement on social media platforms adds value to the conversational AI solutions, which is expected to offer openings for companies, especially in the retail sector.
Today, Retail 2.0 is at its peak, with retailers increasingly leveraging the power of data and evolving tech to enhance the customer experience both online and offline. Speed, immersion, automation, and convenience are the four pillars of this technology-led retail revolution. And the one consumer-friendly tool that retailers today rely on to deliver on these tenets is conversational AI.
Benefits of Conversational AI in Retail
AI-driven voice bots have a vital role to play in bringing together retailers and customers. Read on to know more about the growth of conversational AI in retail:
Data extraction for actionable insights
The retail sector generates massive volumes of data each passing minute. Each query, acquisition, and service request offer significant insight to retailers on consumer behavior. Retail conversational AI acts as a compelling and extremely useful data investigator– collecting and assessing consumer data to obtain actionable insights.
Considering that retailers will be focusing on building a niche customer base in the coming-future, conversational AI is all set to play a decisive role in business strategy development.
Instant customer interaction opportunities
With retailers having to deal with a large number of customers daily, they often find it challenging to address all inquiries at any given time. In today’s digital era, the prospects of setting a system in place for this are infinite. With conversational AI, retailers can address these queries even beyond office hours within a specific integrated platform.
Conversational AI reduces the need for thousands of agents to be utilized for the same, aiding enterprises globally to cut down running costs while gathering valuable data from conversations in real-time.
AI-driven voice bots, armed with machine learning, can converse as humans with consumers and become smarter with each interaction. Considering their automated nature, these tools are accessible 24×7, helping retailers address customer queries round the clock and significantly minimize wait-times or be constrained by the ‘office hours’ of a contact center.
Integration of offline and online retail
In the recent past, news of the offline retail slowdown has been widespread. A series of lay-offs and insolvencies have afflicted the sector with the rapid growth of e-commerce. News of store closures increased tremendously in the past couple of years. So, the following question arises; Has the retail sector been taken over entirely by e-commerce? Not exactly.
The fact is that brick-and-mortar retail stores cannot be written off altogether. A recent report by CBRE has disclosed that online-only retailers still account for a marginal fraction of all retail transactions, while physical store sales account for close to half of the transactions. Many young ‘digital natives’ still prefer to shop in retail stores, as they would instead physically explore their purchases.
Simultaneously, online retail continues to flourish and is expected to expand to $73 billion by 2022. So evidently, both online and offline stores are essential when it comes to retail. By assuring a standardized online and offline experience for customers, conversational AI can play a crucial role in bridging the disparity between the two.
With the help of voice bots, customers can glance through supplies and acquaint themselves with promotional deals and product offerings before they are taken to the store. Thus, conversational AI for sales can offer a more encouraging and rewarding in-store experience for customers, driving repeat visits and boosting their engagement with retail brands.
For example, the Future Group has introduced conversational AI in its Future Pay wallet with a Shopping list bot and a Quiz bot. The Quiz bot comes with a gamut of GK quizzes for consumers daily, offering them an incentive of winning big if they manage to climb to the top of the leaderboard by giving correct answers. The chat-based setup’s uniqueness is the element of fun and allure, incentivizing consumers to come back again.
The Shopping list bot focuses on the buying experience by aiding users instinctively create a shopping list and placing reminders to shop for necessities, thereby driving them towards purchasing from offline stores.
Better engagement with innovative content
With the rising consumption of digital content on smartphones, retailers are introducing new online content to enhance their brand awareness amongst consumers. This is where chatbots are proving to be quite useful.
The union of retail and content has already become quite evident. For example, Google has begun testing retail features on YouTube. Prices of products and suggestions are stated beneath videos, with viewers being authorized to purchase directly. Naturally, this is wonderful for retailers. However, users would need guidance for a seamless purchase experience while they are kept engaged. And that’s where conversational AI could help.
Lately, chatbots with multi-linguistic conversational powers are being built that are exceptionally useful for a lingually diverse nation like India. As per a KPMG-Google report published in 2017, there will be over 500 million Indian language internet users by 2021 in India, far more than the projected 200 million English language internet users. To serve this expanding and essential next-generation audience, retailers today must have vernacular-enabled, mass personalized engagement tools offered by chatbots.
These key drivers of conversational AI growth have also led to enhanced customer service, bringing about swift replies and augmented consumer experience. But as people cannot be available the whole day, and neither can they give immediate responses, conversational AI’s role has become substantial in retail customer service.
Impact of Conversational AI on Retail CX
Retailers today are using conversational AI to deliver quick service and offer all customers an individualized experience. Experts believe that conversational AI’s use in retail customer service will become more prevalent with time. Here is a list of ways in which conversational AI is impacting retail customer experience:
- Enable employees to engage in more useful tasks: Several retail firms might be mismanaging human talents by designating work that could easily be performed by voice bots. Customer service chatbot lets retailers put their employees to better use. They can allocate their employees to more urgent tasks, such as sensitive customer inquiries or actionable customer service.
- Improved experience pre-and post-sale: Retailers can provide customers with a more individualized experience, making them feel more valued with a digital human response to their queries. AI chatbot continuously learns by providing its service. The more it handles inquiries, the more it gets to know about dealing with customers. Once it is adequately trained, it can even recommend products or services that retailers offer—especially those tailored to the customer’s behavior patterns and interests. If there is a problem that the bot fails to manage, then it will pass the customer on to a human agent at an appropriate time.
- Enrich a company’s brand name: All retailers are keen on getting a chance to enhance their brand name. Now, what better manner to improve your standing than by launching higher efficiency and cost-cutting solutions? With AI chatbots, retailers can create their perfect staff members by keeping in mind their brand image. Conversational AI presents the ideal opportunity to appropriately brand the company by the overall look, the tone of the responses, and the tailored answers to each question. Retailers can get the customer service bot to match their communication guidelines and manage circumstances by the guidebook.
- Avoid unhappy customers: Often, enraged customers call customer service, and rant about the unsatisfactory service or the delay in having their problems addressed. Retail consumers today have high expectations and low tolerance, and companies find it challenging to manage them, as consumers expect faster service. Luckily, customer service chatbots can handle the problem. AI chatbots have an optimistic approach at all times, and they can promptly cater to customers’ needs.
Voice chat is the ideal medium of engagement in the 21st century. It merges the real-time synchronous character of phone conversations with the intimate nature of text messages and the traceability of e-mail. Conversational AI has genuinely become a necessity for retail enterprises with the ability to provide 24×7 customer support, actionable consumer insights, and the power to engage customers with interactive content.
While online retail presents expediency to customers, they still want the experiential and social touchpoints offered by offline retail. As retailer enterprises work to give their customers the best of both worlds, they will gradually start counting on conversational AI to provide the best possible customer experience.