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How Conversational AI Will Transform Retail Customer Service Featured

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Consumers are increasingly comfortable with AI. As people increasingly interact with AI technology, conversational AI is poised to revolutionize retail customer service. Conversational AI is a technology that uses speech-based assistants to create meaningful and natural interactions with customers, similar to talking to another human. Conversational interfaces allow businesses to increase the efficiency and personalization of their customer service while also cutting costs.

Additionally, conversational AI can centralize fragmented customer data into actionable insights, boosting conversions, upsells, and retention.

This article explores how retail brands can benefit from conversational AI and the future of this technology.

Conversational AI Enhances In-Store Support

Conversational AI lets businesses interact with customers in real-time via their mobile device.

According to RetailDive, most people already use their mobile device to aid with in-store purchasing, primarily to research products or compare prices.

Conversational interfaces offer new functionality to shoppers, letting them chat with customer support or store representatives through chat apps and mobile messaging.

These platforms offer intelligent and ever-more natural responses to users due to their natural language processing (NLP) and machine learning capabilities. AI learns from each customer interaction so it can better respond the next time around.

Conversational AI offers a more intimate and immediate customer service experience. With the feel of personal human care, shoppers can instantly:

  • Ask questions
  • Give feedback
  • Receive personalized recommendations
  • Make a purchase from within their text inbox or chat window

This type of access would be cost-effective to do with entirely human employees, but AI can supplement live customer service representatives, allowing for these personal interactions at a fraction of the cost.

This type of direct access to customers’ inbox is a rare and valuable opportunity for retailers.

Text messages are read quickly and unanimously, so brands using conversational AI can expect to engage their customers in a precise, timely, and accurate fashion.

Data from these service interactions can then be used to refine the AI’s responses. This bolsters the technology’s ability to maintain customer relationships and promote sales.

Businesses should work with their e-commerce development companies to best understand how conversational AI can support their in-store experience.

Conversational AI Enables Meaningful Future Interactions

Conversational AI aligns with peoples’ desire for personalized service and their growing comfort with intelligent technology. These personalized experiences not only improve the present customer experience, but can make it more likely that customers will return to your brand or purchase more items.

For example, fashion apparel retailer H&M uses intelligent chatbots to offer a curated catalog to shoppers. Implemented on the chat app Kik, the bot quizzes the user then scans their social profiles for data to inform its recommendations, as seen below.

ai retail


H&M’s AI-based interaction can lead to an upsell, and the customer will appreciate having personalized recommendations, making them more likely to return.

According to PSFK, a customer experience platform, 51% of people are comfortable sharing personal details in exchange for personalized recommendations and discounts from brands.

As businesses continue to offer AI capabilities, shoppers will increasingly expect this extra personalized attention from brands.

Conversational AI also allows for rich communication services (RCS) – or mobile messaging with visual media and interactive elements – to be delivered via text or messaging apps such as WeChat or Whatsapp.

Unlike SMS, RCS are data-rich communications that can be personalized and optimized to promote meaningful interactions.

Brands can now leverage interactive buttons, high-resolution images, and videos to engage customers throughout the funnel, helping to bolster service, increase loyalty, and drive revenue.

Conversational AI Improves the Retail Experience

AI-enhanced shopping and on-demand customer service are coming to a retailer near you. Businesses should work with artificial intelligence companies to implement these technologies to satisfy customer expectations or risk falling behind.

Riley Panko is a Senior Content Developer for Clutch, the leading research, ratings, and reviews platform in Washington, D.C. She focuses on business process research, specifically virtual assistant services and phone-based customer service.

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