Chatbots Must Learn to Talk Back

Advanced search functions are now indispensable in helping shoppers find and choose what they want from the many millions of products now available to them online or in-app 24/7. There are now more than 268 million digital buyers in the U.S. — all expecting highly personalized experiences and super-fast, hyper-relevant product discovery. To do this at scale is virtually impossible without the use of filters, algorithms and search tools.

Increasingly, to help cut through the noise, provide curated services and higher levels of customer support, many retail brands are turning to chatbots. In fact, chatbot transactions in e-commerce are expected to reach $112 billion by 2023, according to Juniper Research.

However, for many customers bots still fail to deliver the fast and frictionless discovery experiences they desire. This has left retailers seeking new ways to boost customer-centricity and strike up more meaningful digital interactions. They need more humanized tools that help them ask the most relevant questions, at the right time in the customer journey — even if that means embedding chat artificial intelligence within the search box itself.

Turning Bots From a Necessary Touchpoint to a Valued Friend

Let’s face it, even when buying online or through an app, no one wants to do business with a robot. Shopping has always been and is still a highly emotive activity, irrespective of which channel customers choose to use.

Human interaction is important. It prevents brand relationships from being purely transactional, locks the customer in and increases loyalty. And customers want the same "feel good factor" online as they get in-store. More than half (51 percent) of consumers said they’re less likely to be loyal to a brand if its online shopping experience isn't as easy or enjoyable as shopping in person. Surprisingly, the number is even higher for Gen Z (69 percent) and millennials (57 percent).

So how can online retailers make their search and chatbots more "human’ like"? The secret lies in teaching search and support interfaces to talk back in a human way. To initiate conversations and to be able to respond intuitively to customers and their needs, and not simply follow a pre-set script. With the latest conversational AI technology this is now possible.

Conversational AI combines natural language understanding (NLU), natural language processing (NLP), and machine-learning models to emulate human cognition. It’s expected to achieve 24.8 percent CAGR in the U.S. from 2021-2028. One of the biggest applications will be in retailing, where it's fast becoming a must-have for digital brands looking to recreate the value-rich, highly engaging two-way conversations typically associated with personal service in-store.

Solving the Friction vs. Personalization Dilemma

Every online retailer knows that digital customers prefer less friction and faster, easier experiences. At the same time, they crave more support to discover what they truly want. This represents an ongoing dilemma for webstore and shopping app designers. How do you simplify and speed interfaces yet provide interactive tools that truly add value?

With conversational AI, they can have the best of both worlds — a smart and simple-to-use chatbot that lets customers interact without becoming intrusive, cumbersome or inconvenient. By enabling people to interact with search functions more intuitively — to be guided by the chatbot rather than grilled by it — conversational AI encourages the shopper to communicate what’s really important to them, which ultimately leads to a more positive result. Want to know what's even better? A chatbot that’s situated within the search experience. And one that allows for shoppers to switch seamlessly between the AI chat and the more typical e-commerce search experience.

Welcome to Decisions Based on Feelings, Not Keywords 

Conversational AI functionality goes further than traditional keyword searches. It doesn’t just follow prescribed rules when responding to a customer request but can pull in all sorts of data — from previous interactions with that customer, based on intent, using third-party data, exploring millions of vectors. The chatbot also respects business rules set up in the backend by retailers. This allows it to make intuitive and empathetic decisions on the most appropriate next steps, content or product information to share with the shopper

In effect, it allows chatbots to recreate the real-life sales assistant in the digital world and much more personalized sales interactions to aid better discovery, increase conversion and boost revenue.

And there's much to gain from a more personal approach. According to McKinsey & Co., companies that excel at personalization generate 40 percent more revenue than average players. It’s estimated that in the U.S., shifting to top-quartile performance in personalization would generate over $1 trillion in value.

Smarter Chatbots Can Power Greater Business Advantage

In addition to improving the customer experience, next-generation chatbots can work better for businesses by helping them to:

• Gather more meaningful customer insight: Brands can record, analyze and share more meaningful, accurate and deeper customer intent insight from higher levels of interaction and more detailed "conversation-based" searches.
• Increase conversion with hyper-relevant recommendations: Website and app chatbots can predict and deliver more accurate recommendations based on what customers really want, not what an algorithm thinks they want.
• Optimize resources at scale: AI-based chatbots can hold multiple conversations across multiple channels simultaneously, freeing agents to focus on value-generating activity.
• Remember past conversations and initiate new ones: Conversational AI applications can automatically track previous searches and queries and connect these with back-office and CRM functions to drive value and sales — e.g., keeping customers updated when an item they may like is launched, comes back into stock or is discounted.

Building Closer Long-Term Relationships

New conversational AI initiatives are reshaping capability every day. For instance, the recent release of GPT-4 will help solve more complex interactions with greater accuracy thanks to its broader general knowledge and problem-solving abilities.

There’s no doubt that AI-powered chatbots are set to become faster, easier and less frustrating to use, more ubiquitous, and seamlessly integrated within search functions. They will continue to learn from every customer click and feed that information back into businesses, helping brands get closer to their customers while enabling them to better understand and solve pain points and barriers to purchase.

By ensuring their chatbots can "talk back" and dig deeper into their customers’ desires, retailers may finally achieve the one-to-one relationships that they desperately need to keep today’s digital consumers connected and loyal for longer.

Nilay Oza is the CEO and co-founder of Klevu, a powerful and extensible e-commerce search solution that delivers search results based on shopper intentions and behavior, in real time.