Analysts predict that spending on artificial intelligence (AI) in the retail sector will reach $7.3 billion by 2022, a majority of which will be poured into customer-facing conversational solutions like voice assistants and chatbots. That’s not surprising, given how the power of conversation is poised to fundamentally transform customer experiences across industries.
The use of consumer-grade digital assistants has exploded in recent years. Consumers have quickly moved beyond “talking” to digital systems for basic information (e.g., weather, traffic, trivia, etc.) and now use them to engage in commerce and other activities. For example, half of respondents to a PWC survey last year said that they had made a purchase via a voice assistant, with an additional 25 percent saying they would consider doing so in the future. While the thought of increased sales through conversational AI is sure to bring a smile to any business decision maker, one shouldn’t lose sight of this technology’s other benefits, particularly its potential to optimize all points of the customer journey.
The New Journey
When it comes to locating information about a product or service, consumers are becoming more interested in simply asking for it, rather than typing or tapping to search for it. Conversational UIs offer many advantages over other digital interfaces in that they help users to find information quickly, allow them to keep their hands free for other activities, and, perhaps most importantly, play on the human brain’s natural inclinations for conversation and engagement.
A recent survey found that consumers preferred chatbots over apps when it came to receiving quick answers to both simple and complex questions. The bar for human-like conversational experiences is being raised constantly through platforms, which are helping tilt consumer behaviors even further toward these types of interactions. As this trend takes hold, it would be in a retailer’s best interest to automate and optimize these engagements through conversation — not just to provide the best consumer experience, but to gain substantial competitive advantage.
For example, when a customer is making a purchase or asking a question, modern conversational systems, integrated and automated end-to-end to back-office systems can tap into individual purchase histories and other data sources to organically upsell or cross-sell additional items (e.g., “Hello Mr. James, thank you for purchasing your new smartphone, would you also like to purchase a screen protector as you did with your previous device?”).
Similarly, more advanced systems allow brands to scale and target marketing/messaging campaigns to very specific segments within the confines of a conversation. For example, an AI system fronted by a conversational UI could alert a 25-year-old consumer who has purchased more than $200 worth of goods in the last six months (indicating she likes the retailer’s products) about an upcoming weekend sale. As these marketing strategies can be modified instantaneously at scale through automation, companies are free to experiment and A/B test different approaches, determining the best response — e.g., making the same offer to “men aged 18 to 25 in the Northeast” vs. “any consumers who spent more than $100 in the last year.”
Conversational AI can also be used to enhance the conventional brick-and-mortar shopping experience, using voice-enabled kiosks or mobile apps. These channels can provide in-store customers with instant access to helpful information such as locations of various items or enhanced services such as scheduling deliveries. When implemented on site, this new functionality benefits customers through access to up-to-date information and services, and it also frees employees on the floor from answering routine customer FAQs to work in other areas.
Humans are designed to experience the world through conversation. Up until recently, this inclination was somewhat incompatible with modern consumers’ expectations for 24/7 access to goods and services, given the lack of tested and effective conversational AI interfaces. However, now that AI allows companies to automate and scale conversational engagements, they can completely reinvent the customer journey to engender loyalty and generate new revenue.
Terence Fitzpatrick is chief growth officer at IPsoft, a world leader in enterprise AI and the home of Amelia, the industry’s most-human digital AI colleague.
Related story: 2019 Retail Technology Report