Do you remember when shopping used to be a confusing and tedious task? Fast forward to today, just look at how your shopping experience has undergone a great transformation. Thanks to conversational AI development companies for revolutionizing customer service, boosting sales, and automating operations with chatbots.
- 83% of companies in India have invested in conversational AI to improve customer service.
- The estimated value of the Indian Conversational AI Market—through a five-year review—is valued at USD 288 million.
- The size of the conversational AI market in India is expected to reach USD 1,846 million by 2030.
In this article, we are going to dive deeper into the world of conversational AI to help you understand how retail businesses can leverage this innovative technology to succeed, survive, and outshine the competition. Let’s begin!
Conversational AI vs. Traditional Chatbots: How Do They Differ?
Conversational AI and a traditional chatbot might sound similar, but they work very differently in functionality. Traditional chatbots use keywords that have been set beforehand and follow strict preset rules of functioning. They have very limited capabilities in managing questions beyond their original scope.
Conversely, conversational AI enables more human-like interactions. Using advanced technologies like machine learning, deep learning, and predictive analytics, it leverages natural language processing (NLP) to adapt and provide intelligent responses beyond fixed algorithms.
Traditional chatbots do not change but rather stick to rigid rules. Conversational AI, on the other hand, evolves by learning from past interactions to deliver dynamic and contextually relevant conversations. This makes the interactions more personalized and natural, like talking to a knowledgeable friend who understands your questions and offers thoughtful answers for a richer experience.
Why Use Conversational AI in Retail?
For the past few years, AI chatbot development services have been continually improving chatbot technologies. Now that conversational chatbots have entered the retail market, user experiences have significantly improved compared to human agents.
According to IBM, companies using AI-based virtual agent technology report a 12% increase in customer satisfaction. This is because chatbots enhance efficiency, availability, and reliability, and offer superior service. AI development companies drive this innovation, continually improving chatbot technologies.
Key benefits of Conversational AI in retail include:
1. 24/7 Customer Support
Conversational AI provides retail businesses with round-the-clock customer service. All kinds of queries, from the specifications of the product to any form of difficult customer care issues are handled by AI-driven chatbots without any human intervention.
Any customer can reach out to these bots at any point in time; this way, no opportunity to engage with the target demographic is missed by the business house. This round-the-clock support enhances customer experience, creates brand loyalty, and frees up human agents to focus on more critical tasks.
2.Personalized Shopping Experiences
Conversational AI enables retailers to offer a hyper-personalized buying experience. AI-powered chatbots even recommend products based on user behavior or their historical purchase records.
This level of personalization leads to heightened sales due to targeted suggestions for discounts or other promotions, resulting in better shopping experiences. It also sends targeted messages to clients based on their browsing history to enhance conversion and retention rates
3. Reduced Operating Costs
Automating routine customer support tasks, such as frequently asked questions (FAQs), order taking, and product details, enables companies to reduce operating costs. Retailers can use AI to make more routine calls, leaving human resources for more valuable tasks like complex problem-solving and proactive customer engagement.
4. Streamlined Selling Process
Conversational AI streamlines the sales process. AI-based chatbots take customers from product discovery to the checkout phase. They help them add products to the cart, answer any questions they have, and even offer payment options. The buying friction is reduced since the chatbots give real-time support, which increases the conversion rate while cutting down on abandoned carts.
Use Cases of Conversational AI in Retail
The usage of conversational AI chatbots in retail has made things easier for not only the customers but also for the retailers as they resolve queries in seconds. The ability to handle multiple customers and their inquiries efficiently and flawlessly has made it a key part of the retail marketplace. Here are some of the major areas in which conversational AI is used:
1. Product Recommendations
Product recommendations are driven by an analysis of the customer’s browsing history, past purchases, and preferences. For instance, if a customer is looking for a jacket, AI can suggest caps, scarves, or other types of accessories that match the jacket. This personalization offers cross-sell and upsell opportunities that can increase the average order value.
2. Inventory Management
Inventory management is becoming smarter and more efficient with AI chatbot development services in India. These solutions streamline the process by offering real-time updates and solutions to inventory-related queries, ensuring seamless customer support. A customer can ask how much stock of any given commodity is left, and the chatbot may instantly give the correct answer after having looked up that item’s current availability.
3. Customer Reviews
Customer feedback is relied upon by collection retailers to enhance their products and services. The efficiency of using conversational AI in post-purchase surveys or any form of feedback is improved. A chatbot easily encourages customers to share their post-transaction experiences, which provides valuable insights to improve offers and make customers happier.
4. Order Tracking and Delivery Updates
Other common applications of AI chatbots in retail include real-time order tracking and delivery updates to customers. As integrating them with order management lets customers track orders, check delivery times, and resolve shipping queries easily. All of this contributes toward an enhanced experience for customers when automation of communication with them reduces the need to get in touch with support.
Real-World Examples of Conversational AI in Retail
Many major franchises have adopted custom chatbot development and now provide better experiences to customers. Let’s look into the implementations of conversational AI in real life and learn how they have given a new look to the retail market:
1. H&M
To create a more personalized shopping experience, H&M, an international fashion retailer, uses AI-powered chatbots. The chatbot assists customers in finding outfits based on their preferences and also assists with checking for size availability. It allows customers to:
• Ask for styling tips
• Check the availability of items
• And even complete a purchase inside the chat interface.
2. Domino’s Pizza
Dom, the chatbot of Domino’s Pizza has made placing orders easier as Dom can accept both text and voice orders. The customer can customize his/her pizzas, check on the status of his/her delivery, and even pay using the chatbot.
The seamless and hands-free interaction has made Domino’s ordering process faster and more convenient for customers to enjoy their favorite meals in no time.
3. Amazon’s Alexa
Amazon integrated conversational AI into its voice assistant, Alexa, to make it easier for customers to shop on its platform. Alexa lets one check out items, track deliveries, and buy products, among others, using voice commands.
The integration of Alexa with Amazon’s universe of catalogs makes it possible for customers to shop more efficiently, thus enhancing the overall consumer shopping experience.
Usage of Conversational AI in the Indian Retail Market
The Indian retail market is not behind either, as both AI development companies and retailers have worked towards bringing better AI chatbots to the market. Take a look at some of the major brands in the Indian market that have integrated conversational AI into their systems:
1. Myntra
Myntra, one of the biggest fashion eCommerce platforms in India, uses conversational AI to scale up customer engagement and the shopping experience. The company’s AI-powered chatbot helps customers find products, track orders, and even get fashion tips based on their preferences. Myntra’s chatbot can take users through the entire shopping process for added convenience and thus keep the company competitive in the fast-paced market.
2. Zappos
Amazon-owned footwear and clothing brand, Zappos, has smoothened the process of online shopping. They have tied up with local AI development companies in India, localizing the experience of the chatbots so it better fits the cultural values of the Indian customer. This allows consumers to speak with the bot, which suggests specific products for their requirements, takes the order, and solves issues.
3. Pepperfry
Pepperfry is one of the largest online furniture retailers in India. It follows AI-driven chatbots for product selection, order tracking, and customer service, offering users lots of choices in furniture. At the same time, it leads users with personalized suggestions based on their needs, room size, and personal tastes. Pepperfry integrates the features of AI into its eCommerce website for better customer satisfaction and operational efficiency.
Why Choose an AI Development Company for Your Retail Chatbot Needs?
When developing AI chatbots for a retail business, it is important to associate with a highly reputed AI development company to make sure that the solution benefits your brand’s singularities. One of the leading providers of AI chatbot development services is SoftProdigy which specializes in delivering customized solutions for enhanced customer engagement and satisfaction.
At SoftProdigy, we help in all phases of the business and provide various leading-edge chatbot solutions with the best developers. Our approach ensures chatbots align with the brand’s voice and integrate smoothly with CRM and eCommerce systems, enhance customer satisfaction, and drive performance to meet retail industry needs.
• Conversational Chatbots: Leading-edge AI and the best machine learning technology allow us to provide intelligent conversational chatbots, using NLP in many applications—hence, speeding up user-friendly conversations with those bots.
• Social Media Integration: We develop virtual assistants that can seamlessly integrate with the most popular social platforms, helping you automate customer interactions and engagement on those platforms.
• Marketplace Chatbot Integration: We also engineer custom chatbots tailored for various marketplaces, improving user experiences, increasing sales, and addressing unique marketplace demands.
Hurry Up!
Conversational AI is transforming retail by offering 24/7 customer support, personalized shopping, and streamlined sales. This is where AI chatbot development services can help your business boost customer satisfaction, enhance efficiency, and drive revenue growth. Don’t lag and stay competitive by integrating AI-powered chatbots into your operations. Contact SoftProdigy now, one of the top AI development companies in India.
Divya Chakraborty is the COO and Director at SoftProdigy, driving digital transformation with AI and Agile. She partners with AWS and Azure, empowers teams, and champions innovation for business growth.
