Reimagine Customer Experiences with Conversational AI in Retail

Conversational AI in retail

Conversational AI is revolutionizing the way businesses interact with their customers. With advanced capabilities to streamline customer service operations, conversational AI bots make businesses available on-demand 24×7.

Through personalized and engaging interactions, conversational bots are prompt in resolving customer queries, and provide the flexibility of choice for customers to choose their preferred medium and language for communication.

Conversational AI is reshaping customer experiences

Due to the increased convenience enabled by AI powered virtual agents, chatbots and NLP engines, the retail business is transforming customer experiences with omnichannel engagement models.

Ideally, conversational bots can facilitate a unified portal for customers of any retail business to purchase goods, or avail services without wasting any time. This is especially applicable to large scale retail chains that experience voluminous traffic from different areas.

Conversational AI doesn’t just focus on the customer, but the entire user experience and the buyer journey, empowering retail businesses with powerful intelligence about consumer patterns and behaviours.

Conversational AI in retail

As we already know, AI powered product search is becoming the driving force of eCommerce retail. Amazon Alexa and Google Assistant are perfect examples of how retail customer experiences are being transformed by voice-enabled conversational AI bots. In fact, AI is refining the human-technology experience with user-friendliness, automation, and personalization.

According to IDC’s report, the conversational AI market will cross $77.6 billion by the end of 2022. Since 82% of consumers prefer to shop from a company that offers tailored experiences, this trend is expected to skyrocket advancements in voice-based conversational bots and AI chatbots alike.

But before we look at the applications of conversational AI in retail, let’s understand more about the buzzword of 2022, conversational AI powered “virtual agents.”

What is Conversational AI?

Conversational AI is the key differentiator for agent and customer experiences. In this blog we understand more about this revolutionary technology that has been fuelling retail giants like Walmart, Amazon, and eBay to acquire, engage and retain their consumers worldwide.

conversational AI in retail

So, what is conversational AI?

Conversational AI is the use of AI to communicate with people in natural, human-like conversations. The AI can understand the user’s text or speech inputs, identifying the intent behind each interaction and responding accordingly.

Main components of conversational AI technologies are:

  • Natural Language Understanding
  • Machine Learning
  • Automatic Speech Recognition
  • Text-to-Speech and Speech-to-Text Integration


Using these advanced components, conversational AI bots can interact with numerous users via voice bots, chat bots or intelligent virtual agents. The use of such conversational support services can help shoppers get the information they need easily, and quickly. Through contextual natural conversations, AI powered bots can resolve queries, track orders, complete transactions and much more – via voice or text.

Conversational AI workflow

In the world of retail, this type of automated friendly engagement reduces the dependency on humans and increases the output of efficient customer services. By saving time and costs, conversational AI bots are reimagining customer experiences in retail.

In the next section, we list down 6 uses of conversational AI in retail and eCommerce.

6 Uses of Conversational AI in Retail

To deliver seamless customer experiences, businesses must know their customers.

Conversational AI is a powerful asset that empowers retail businesses with increased knowledge of their customer, how they interact, what they like and when they’re most likely to make the next purchase.

Placing the customer experience at the centre of retail operations, conversational AI bots are used to uncover new opportunities, by ingeniously boosting customer engagement.

Juniper Research’s report states, 70% of chatbot conversations are expected to happen using retail conversational AI systems by 2023.

And with increased digitalization in retail, conversational AI introduces a myriad of use cases and benefits like the 6 uses listed below.

1. Know more about customer needs

Conversational AI bots, whether a chatbot or intelligent voice response system (IVRS), empowers retailers to understand their customer better, by gaining insights into their wants and behavioural patterns.

Retailers can thus analyse the percentage of customers seeking products in specific price ranges and categories, to know what items are highly sought after. This can help manage inventory, deliver personalized experiences, and nurture buyers to make a better decision.

In turn, conversational AI in retail helps businesses stay atop customer demands and changing market conditions to create an effective sales strategy that breaks the rules of conventional retail sales.

A digitalized world allows retailers to implement conversational AI bots into their network to boost customer service efficacy, operational efficiency and improve their sales.

2. Get better quality leads

Conversational AI in retail comes with a powerful capacity to engage with voluminous consumer traffic effortlessly. By answering the questions of customers, a timely resolution encourages advocacy among buyers. Using continuous feedback mechanisms and real-time customer sentiment analysis, the AI can help personalize the shopping experiences for users.

By empowering retail businesses with new opportunities to generate leads, conversational AI is also used in retail to build stronger ties with the market. Intelligent virtual agents can guide customers towards the services of a retail chain without any interruption, requiring zero human intervention.

The best part is, generating leads with conversational AI becomes more human-like with every engagement.

3. Redirect human efforts towards strategic tasks

Another big benefit of conversational AI in retail, is the use of intelligent virtual agents to replace humans in the customer service cells. This reduced dependency on the workforce can save a company lots of money. Furthermore, humans can be delegated strategic and creative roles to exercise key elements of organizational productivity.

With increased flexibility, better work-life balance and job satisfaction, your employees can focus on more actionable customer service tasks without being burdened by the tedious nature of dealing with customer grievances throughout their workday.

By automating rigorous tasks, conversational AI frees up your workforce for more important work that can help your retail business grow and offer better services to customers.

Conversational AI customer benefits

4. Provide 24/7 customer service availability

Conversational AI bots don’t get tired and can handle way more workload than any single agent. In fact, one AI powered chatbot alone can automate the work of an entire retail customer service team.

Trends like shorter attention spans, diverse shopping preferences, various device compatibility and peer to peer advocacy can be capitalized using conversational AI technology. Conversational bot services can be used 24/7 on any device, making omnichannel retail that much more awesome.

According to Forrester’s research, 73% customers say that convenience and value of time are among the most important aspects of good customer service.

With conversational AI integration, retail businesses are always available, prompt in responding to customers and can value the preferences of each customer no matter the scale.

5. Streamline order management in retail

Conversational AI in retail is used to simplify the order processing and tracking functions of the company. Through engaging conversations with customers, the AI powered bots can close sales faster and enable easy shopping for customers.

Using a chatbot or voice bot, the customer can pick a product, specify details, purchase, and track their order at their convenience. AI also studies the pattern of engagement, using powerful analytics to predict trends and patterns of the customer journey.

An excellent use of conversational AI in retail is how the Starbucks app allows their customers to order personalized drinks by chatting with their AI powered chatbot. Customers can specify their type of drink and the AI puts together the flavours based on intent. Now that’s a superpower.

When the drink is ready, the customers receive a notification to pick it up on their way to work, or anywhere.

Through improved order management in retail, the business can expand their portfolio and uncover new opportunities to cater to the customer sentiment well.

6. Holiday promos and loyalty programs

Another great use case of conversational AI in retail is the holiday assistant that can help customers find exactly what they are looking for. Along with this form of conversational assistance, the technology can also help customers compare products and prices when making a purchase decision.

During holidays, this type of assistance is a breakthrough for retailers and eCommerce companies. AI can promote seasonal offers, inform customers of promotional activities, and grow a retailer’s subscriber list. Retailers get a clear view of the current needs of customers based on trends uncovered by AI engagement, ensuring safe, secure, and confident retail experiences.

The conversational AI bot can suggest alternatives to a product, issue seasonal coupons, provide discounts and invite customers to your new loyalty program without any human intervention. The predictive intelligence and historical data analysis ensures that AI is never wrong when dealing with your customers.

Conversational AI business benefits

In fact, the science shows that conversational AI bots can boost customer satisfaction by over 140% with timely, accurate and empathetic user engagement models.

Build Your Own AI Virtual Agent

By implementing conversational AI into retail, the road to 2022 is all about refreshing, rejuvenating and reimagining the customer experience. AI supports the need to build stronger relationships with your customers and thereby offers an in-depth understanding of your business needs. With accuracy and agility, retail businesses worldwide are already capitalizing on the advancements of conversational AI and its many benefits.

If you would like to know about conversational bots, and the implementation of Bot-as-a-Service (BaaS) technology for your business, read A Beginner’s Guide to Bot as a Service (BaaS) Transformation.

At Technovert, we build virtual bots that reimagine customer experiences and reignites your efforts towards producing rewarding end-user value.


Business longevity is met when IT facilitates system changes required to compete and thrive as a leader in industry. I write about digital assets and how businesses can leverage capabilities of AI, cloud and edge computing for strategic transformation.

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