How AI-powered conversational commerce will transform shopping in 2023

As the world increasingly relies on technology, the way we shop has also undergone a major transformation. Gone are the days of physically visiting a store to make a purchase – now we can shop from the comfort of our home thanks to e-commerce. But even ecommerce-based shopping will change with the rise of AI-powered conversational commerce.

In retail, artificial intelligence is quickly becoming a common tool to provide more efficient and personalized customer service. According to a recent study through Juniper ResearchAI-powered chatbots are predicted to play a major role in customer interactions in the coming years, handling 70% of customer conversations by 2023.

This shows the growing reliance on AI-driven tools to improve customer interactions and create a more seamless shopping experience. Imagine talking to AI-based virtual assistants that can help you find exactly what you’re looking for, make recommendations based on your past purchases, and then complete the transaction. AI-powered conversational commerce aims to revolutionize shopping by providing personalized, convenient and more efficient service.

The benefit of conversation trading powered by AI

The past decade has seen major advances in conversational AI, deep machine learning, and natural language processing algorithms. Consumers have embraced this technology and are now accustomed to using conversational AI assistants such as Siri and Amazon Alexa, which have enhanced our ability to access information.

AI-powered conversational commerce aims to further personalize the shopping experience. With access to a wealth of data, AI assistants can learn more about a customer’s preferences, making it easier to find products they’ll love. Such personalization is limited with traditional e-commerce platforms, which rely on generic product recommendations. Advanced natural language processing (NLP)-based chatbots and machine learning models can improve customer experience (CX) and ultimately deliver a higher return on investment (ROI) for businesses.

“Consumers increasingly value experiences over things. So unless your store is an enjoyable experience in its own right, customers will appreciate the ability to access the experience you provide (owning your product or enjoying your service) remotely, with little friction,” Kerry Robinson, VP of Conversational AI Strategy at Waterfield Tech, VentureBeat told me.

Robinson explained that as consumers become more comfortable discovering and buying products and services through voice and chat interactions on smart devices, brands will need to optimize for findability through voice search and virtual assistants like Alexa and Google Assistant.

“This indicates [a move] to larger contact centers and e-commerce investments rather than old brick-and-mortar locations — and optimizing those experiences with conversational AI chatbots and voting bots,” he said.

AI-powered conversational commerce will also make shopping more efficient. Customers can ask the chatbot for recommendations or specific product information during the product discovery phase. The chatbot’s deep learning algorithms can learn a customer’s preferences and needs and provide relevant product suggestions based on previous purchases and browsing history. This helps customers discover new products they may be interested in and saves them time by presenting appropriate options.

Once the customer has found the desired products, he can add them to his shopping cart using the chatbot. The chatbot can also provide information about product availability, prices and shipping options and help the customer make the necessary choices.

At checkout, the chatbot can securely store the customer’s payment information and process the transaction. It can also resolve any issues, such as an incorrect billing or shipping address, and assist the customer if necessary.

The chatbot ensures a seamless and convenient experience throughout. The customer can complete all stages of a purchase without visiting multiple websites or speaking to human customer service representatives. This saves time and reduces frustration, improving the overall shopping experience.

Customers also get the flexibility to make purchases through a voice-enabled device at home or through a chatbot on their smartphone.

Beerud Sheth, CEO of Gupshup, believes AI-powered conversational commerce will improve marketing and advertising in many areas, from public broadcasting to private personalized offers.

“Each conversation leaves a crumb trail of personal preferences that the AI ​​can use to personalize all subsequent interactions. Soon, AI salespeople will be like your best friends who know you as well or better than you do yourself, suggesting just the perfect thing you’ll like,” Sheth said. “It will be like having your personal shopper help you through the end-to-end shopping experience like they do in premium department stores, but on a virtual scale. Each conversation is a one-on-one private chat, with each step of the conversation revealing more details about the customer’s interest, enabling deep personalization in a way that previous marketing mediums couldn’t.”

Improving the shopping experience with AI

Traditional ecommerce platforms rely on algorithms that consider a limited number of factors, such as a customer’s previous purchases and browsing history. AI assistants have access to a much wider range of data. This allows them to analyze a customer’s preferences in more detail, make more accurate recommendations and help customers discover new products.

AI-powered conversational commerce will also benefit retailers. By automating routine tasks such as answering customer questions and processing orders, retailers can free up their staff to focus on more complex tasks. This helps reduce the workload of customer service teams and enables them to provide better service. With the valuable customer data and insights collected by the chatbot, the customer service team can improve their marketing and sales strategies while increasing efficiency.

Towards conversational advertising

Explaining how AI-powered conversational commerce will impact the way products are marketed and advertised, Matt Ramerman, president of cloud communications firm Sinch, told VentureBeat that AI conversational commerce will further enable consumers to “talk” to ads so that retailers can push an offer to a customer via messages.

“Marketers can design the ads to invite customers to ask questions or [to] select an alternative or adjacent product that they might be more interested in,” Ramerman said. “The customer, in turn, can directly ask questions about that offering, explore options, and complete that transaction without leaving the messaging channel. participate in a conversation to shape and customize offerings on the backend, so brands no longer have to make educated guesses about what a customer might want.”

Ramerman explained that conversational commerce allows shoppers to proactively interact with brands to shop, transact and deliver. He says streamlining this process through interactivity gives consumers more control, reduces purchase time and enables a more seamless and enjoyable shopping experience. At the same time, it creates trust between the consumer and the brand.

“I believe collectively we are meeting consumers’ preferences to use their favorite mobile channels by moving to messaging. In fact, consumers spend nearly 70% of their time on mobile messaging rather than spending time browsing web pages. These interactions at scale need to be driven in an automated way [and] AI is the enabler,” he said.

Current Challenges for AI-Powered Conversational Trading

Christina Kosmowski, CEO of LogicMonitor, notes that it can be difficult to give conversational tools all the context they need to provide real value and solutions. She also says these tools work great, but only as long as the problem space is limited and known.

“For AI-powered chatbots to work efficiently, context is key. Unfortunately full open support is very hard to get right as this technology runs into the traditional precision/recall problem. The more you try to cover, the less accurate you’ll be – and this will erode customer confidence and confidence in the tool,” said Kosmowski. While the architecture can learn behind the scenes – collecting demographic/psychographic details and, frankly, deeper personal information to provide a valuable customer experience – it is difficult to collect this data in a frictionless way.”

Similarly, Bern Elliot, research VP at Gartner, says many legacy underlying systems lack the agility needed to respond to changing markets. As a result, the only things you can change are your customer-facing elements, not the operations.

“APIs to back-office systems are often lacking and back-office systems are often not integrated with each other. Another important point is the data. AI systems need good data to perform their distinctive services, such as personalization, and many organizations are still unable to capture and retain the necessary information,” said Elliot. “Changing and adapting internal processes, policies, fees, pricing, etc. to take advantage of the new methods is currently a huge barrier to developing the type of organization that is able to deliver these new approaches.”

What to expect from AI conversation trading in 2023

Ramerman predicts AI-powered conversational commerce will soon become the primary way to interact with brands in 2023 and beyond.

“Customers crave convenience when shopping and it’s more important than ever for retailers to keep customers engaged across a single channel. Inviting them to a conversation via AI-powered chatbots and voice assistants is the next step in digitizing commerce. Natural Language Understanding (NLU) enables advanced chatbots to understand and mimic a customer’s tone and/or speaking pattern. More brands will use NLU in 2023 to equip their chatbots with brand personalities,” said Ramerman.

Similarly, Sheth believes that conversational AI can be combined with AR/VR or speech technologies to make the experience more immersive.

“Together, these technologies can trick your eyes, ears, and brain into believing you’re standing next to that store clerk, or even your favorite celebrity, talking about things you should or shouldn’t buy. Going shopping with friends takes on a whole new meaning when those ‘friends’ are virtual shopping agents,” he said. “While 2022 marked the emergence of general conversational AI models, 2023 will mark the emergence of enterprise-specific conversational agents. It’s coming soon to a mobile device near you.”