Conversational AI in Retail: Use Cases and Benefits

The retail industry is a fast-growing vertical with an estimated market size of 32.68 trillion US dollars today. It is estimated that the market size will reach 47.24 trillion by 2029, with its largest market located in North America. In such a massive market with so much growth opportunity, conversational AI plays a pivotal role by automating processes, simplifying operational processes, and contributing to better customer experience.

In this entry, we will discuss how conversational AI is changing the retail industry today and how businesses can use this technology to meet demand. 

How Conversational AI is Transforming Retail

The retail industry transformation with conversational AI technologies is more extensive than ever. Conversational AI's impact is changing consumer behavior and industry standards. Applications include customer service and support to reduce operating costs, tailor shoppers' experiences, manage inventories, and even let customers access personalized self-service options.

For example, a couple of years ago, accessing attentive and functional customer service without speaking with a human agent was impossible. Today, with conversational AI solutions, customers can communicate with brands directly, share their concerns, and receive immediate answers. 

Customer Service and Support

On top of the attentive and automated possibilities conversational AI offers, this technology also provides an additional advantage: 24/7 support. Before these technologies were implemented in the retail industry, customers were limited when accessing support after 5 PM. Now, they can access actionable and valuable information and solutions anytime, anywhere, and much faster. From query handling, order tracking, product recommendations, etc., businesses in the retail industry are adopting conversational AI to serve customers better. 

Tailored Shopping Experience

Not all shoppers are alike. Conversational AI solutions are trained on large data sets and behavioral signals to help customers with a shopping experience that better matches their needs and preferences. From getting a shopping guide in case you prefer to browse through a catalog or getting augmented reality recommendations if you are a tech early adopter, conversational AI solutions adapt to consumer behavior to facilitate and accelerate purchases.

Inventory Management

A significant problem that retailers face is having an accurate inventory log. As a result, consumers may face a frustrating experience trying to buy an item that is no longer available and where little to no information is available regarding when it will be in stock. Conversational AI solutions act as a communication tool that allows users to see what's in stock, what other similar options they may want to buy, and when they will become available again. It also represents a massive opportunity for retailers to understand user preferences and purchase signals for future product development and strategic decisions. 

Customer Feedback

With conversational AI solutions, retailers can gather valuable customer data and feedback with automated surveys, aggregated reviews, and more. Unlike other customer feedback systems, conversational AI technologies also build more robust data sets to understand purchase patterns, triggers, etc., ultimately helping you better understand your customers. 

Omnichannel Support

There are more channels to communicate with retail brands today than ever in history. However, given this fact, users also often face difficulty interacting with their brands, given that the service or particular solution they need is not available for a specific channel. With conversational AI support, their entire relationship is logged, organized, and interpreted to provide optimal support. Customers receive the help they need regardless of where they started interacting with the brand, getting solutions faster, or getting referred to a human agent with the context of their case instead of starting from scratch and identifying the problem. 

Self-service Options

Solving problems on your own without having to speak to a human customer representative is part of our daily routines when interacting with products and services. When it comes to retail, customers generally want a fast solution to their problems, meaning that if they can solve the problem by themselves, it might be the ideal solution. 

Personalized Marketing and Promotions

By analyzing customer purchase behavior, retailers have a massive opportunity to accelerate sales simply by showing up at the right time with the right offer. Personalized ads, notifications, and offers that help buyers solve their problems are some of the best ways to build a loyal customer base, sell more, and be perceived as a valuable brand. 

Quick Access to Product Details

Conversational AI also allows customers to access product details without speaking to a human agent. Instead, they can have a natural conversation with an IVA (Intelligent Virtual Agent) that guides them through multiple features and potential queries they might want to learn about to ensure their satisfaction. Instead of having to be on hold, explain their problem to an agent, and potentially get an incomplete answer, conversational AI becomes a self-serve solution that is immediate, effective, and saves time. 

Proactive Communication

Retailers that integrate conversational AI into their tech stack can better understand customers. The more they know about their customers, the more they can reach out to them in a meaningful and helpful way. 

Proactive communication mediated by IVAs augments the customer experience. Businesses become more profitable, and operational costs are reduced. Read more about how to communicate proactively with your customers.

Benefits of Conversational AI in Retail

The benefits of conversational AI in retail touch upon most business areas. Customers receive a better and more personalized experience, while businesses add an intelligent ecosystem to better understand what people want, when, and how. 

High Customer Satisfaction and Retention

Essentially, every customer wants a single thing: to feel their purchase is satisfactory. Brands incorporating conversational AI solutions can identify faster whether customers are facing issues to provide solutions. As a result, customers get superior service, businesses automate operations, and retention KPIs are improved. 

Better Sales and Conversions

The more information and personalization you can add to every touchpoint, the higher the resonance and the likelihood of purchase. Sales are improved due to perceived value via personalization; marketing strategies also become more efficient, and ultimately, customer brand perception skyrockets. Instead of being just another retailer, your brand can be perceived as one that understands its customers and actively helps them live better with your products.

Leads to Better Customer Engagement and Loyalty

As we mentioned, information and proper use of behavioral signals to create a meaningful CX impact brand perception and loyalty. By integrating technology that essentially uses machine learning and generative AI to provide the best possible customer experience every time, customers can feel more connected to your brand. This leads to loyalty, word of mouth, and multiple other benefits for retailers.

Better Decision-Making Based on Valuable Data

Information is power. When it comes to retail, given the immense number of data sets available and the complexity of understanding users, conversational AI becomes an intelligent solution to simplify decision-making. Instead of having to guess what customers want or their most common problems, IVAs can automatically send internal reports to help leaders improve processes. Remember that data is only as valuable as the organization can interpret it. With conversational AI, leadership can augment customer intelligence, leading to better decisions and outcomes. 

Good for Employee Morale and Productivity

Running a retail call center can be a repetitive and frustrating job. Instead of having a team of specialists handle all incoming calls, for example, you can augment your team’s abilities with a conversational AI solution that handles most customer queries. At the same time, they get to focus on the more complex scenarios. This way, KPIs associated with volume and speed become less rigid, allowing human agents to primarily focus on providing high-quality customer service. 

Streamlines Operations

Retail operations are a complex system. When it comes to customer service in retail, the complexity is also massive, leading to many potential problems and mistakes, which can lead to poor customer experience and reputational damage. Conversational AI streamlines operations by letting your customers access efficient service fast, getting your best human agents to work on the right types of problems and reducing potential errors. 

Good for Brand Image

Solving your customer problems efficiently and immediately positively affects your brand image. Companies using conversational AI to improve their CX processes stand out for their effectiveness and thoughtful service. The best products and services we have are those that work well and provide a seamless and efficient experience, even if issues arise. 

Beneficial in Crisis Management 

While crisis management is almost always best handled by a human professional, conversational AI can act as a buffer that provides alternative solutions quickly for customers. Suppose the problem is still present after the IVA interacts with the customer. In that case, the call can be redirected to a trained customer service representative who has the context to provide the best solution for the call. 

Elevate Your Retail Business With Mosaicx IVAs

Proactive outreach allows retail businesses to share important information with customers, improving sales velocity and brand loyalty. If you’re looking for an enterprise partner to help you integrate conversational AI, please visit our product page to learn more. 

Mosaicx is a cloud-based, AI-powered customer service platform that can help you create or elevate your proactive outreach strategies. Reach out; one of our specialists will be delighted to show you how to integrate conversational AI today.