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Conversational Commerce Makes Dollars and Sense
Retailers and e-commerce sites have been trying to optimize their sites for conversion in different ways. Artificial intelligence language models make a positive difference.
5 Min Read
hirun laowisit via Alamy Stock
Chatbots. Consumers have about had it with chatbot popups and chatbots that can’t answer questions. While retailers have worked hard to improve digital shopping experiences for the last three decades, a lot of the optimization has to do with the way their sites look, but user experiences still tend to lack some of the important traits of shopping in a physical store, such as getting assistance finding an item. Generative AI (GenAI) helps by making online shopping more personal and engaging.
“GenAI is revolutionizing the shopping landscape by providing highly personalized and efficient customer service,” says Timothy Bates, professor in the University of Michigan College of Innovation and Technology. “Voice interfaces, in particular, are transforming the shopping experience by enabling hands-free interactions, which are particularly beneficial in an increasingly mobile world.”
Brands that have successfully deployed conversational technologies are realizing significant benefits. Bates says his clients have reported up to a 25% increase in customer satisfaction scores, a 30% reduction in customer services costs, and a 20% increase in conversion rates.
“We’re heading towards more sophisticated and context-aware AI systems that can handle complex queries and provide even more personalized recommendations,” says Bates. “As these technologies continue to evolve, the key will be addressing biases and ensuring inclusivity in AI interactions.”
Sanjeev Siotia, chief technology officer at supply chain and omnichannel commerce solutions company Manhattan Associates, considers GenAI “transformative.”
“This technology will transform how retailers interact with their customers. With the assistance of AI, retailers will be able to provide more precise answers to the consumer in a personalized and natural manner. The goal is to convey to consumers that the retailer is fully informed of all aspects of their interaction whether they are responding to a complaint or proactively selling a product,” says Siotia in an email interview. “Secondly, AI will significantly improve online product descriptions, provide quick answers to complex products, and enhance the way consumers search [for] and select products.”
Bottom line, a different interaction paradigm is emerging that is more visual and conversational than keyword search and tiled product displays.
How Conversational Commerce Boosts Conversions
Boosting conversions and ultimately sales require optimization. Using GenAI, retailers benefit from greater customer engagement and brand loyalty.
“When you go onto a website and you want to buy a new dishwasher, a mountain bike, or seeds, [those websites] are all almost identical, so it’s really hard to find the product you want. You open a tab or click on a product and read about it and go back and click on another one and they you’re trying to remember, how is this different from the other product?” says Matt Gertner, CEO and founder of AI-powered 3D configurator provider Salsita. “It’s a frustrating experience for the buyer and it’s bad for the merchant.”
Of course, some sites have tried to overcome that problem by providing a compare feature, but that can be unwieldy, too. Typically, the result is a long list of facts, side-by-side, which sometimes leaves the buyer even more confused about a purchase than they were before visiting the site.
“If you can get rid of the thumbnails, which is not conducive to finding the right product, and replace it with something much closer to the offline purchasing flow, where you’re given a limited set of options, it’s clear to you what the differences are between products and if you can ask questions or get advice, you can feel confident about making a purchase,” says Gertner. “This technology is so impactful that you have to consider the whole UX.”
One huge advantage of GenAI in retail is the ability to provide mass personalization.
“The more relevant information you can show based on what you know about the products and the individual [the more we’re] able to find a better match,” says Xun Wang, chief technology officer of ecommerce personalization platform provider Bloomreach. “We try to think about how we can differentiate, and that requires an understanding of the user’s context and journey. If the user did a very streamlined search and is about to check out, we’re not going to intercept them and say, ‘Talk to my AI agent.’ So, there’s a level of AI that we need to be able to detect relevant data and context information.”
The mass personalization GenAI enables can come in the form of quick accurate answers to customers’ specific questions. For example, one shopper might want help with a technical specification while another is more concerned about size. Instead of receiving or seeing a lot of information that is irrelevant to the question. customers can explore products in a more personalized and interactive way.
“GenAI offers a cost-effective solution by providing personalized and engaging customer experiences. Through AI-driven solutions, retailers can transform passive browsing into active product exploration,” says Ryan Volberg, president at AI-infused retail solutions provider Mobile Insight. “GenAI enables customized recommendations based on customer behavior and preferences, leading to more relevant product suggestions and higher satisfaction. It can also predict customer needs, streamline the buying process and offer consistent, accurate information enhancing the shopping experience.”
Bottom Line
GenAI is making a positive impact in retail. Retailers can finally transform passive browsing into active product exploration, whether that’s responding to specific customer queries, making suggestions or guiding the customer through a more streamlined shopping experience.
In the near future, expect to see more voice-activated commerce and GenAI used with different forms of AI and emerging technologies that extend the art of the possible.
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