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The Future of Chatbots: 3 Ways ChatGPT is Transforming Retail

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When OpenAI introduced ChatGPT in late November, it captured the world’s attention. By January 2023, the platform had over 100 million monthly users—making it the fastest-growing consumer application ever.

Chatbots are not new. But only 43% of customers today believe engaging with chatbots is “easy.” Negative chatbot interactions can lead to frustrated customers and lost sales.

ChatGPT and the growth of conversational AI will transform how customers interact with brands. With conversational AI, retailers can deliver a more meaningful customer experience and increase brand value.

What is Conversational AI?

Conversational AI applications—like ChatGPT—rely on natural language processing (NLP). NLP uses machine learning and deep learning to understand the context of language and respond like a human. 

With NLP, chatbots can engage in nuanced conversations—including asking relevant questions, acknowledging errors and discerning consumer sentiment. And unlike traditional computer programming, these AI models improve as they receive new data. 

“In the past, chatbots were very much restricted to specific questions [such as] ‘what is your size?’” says Slawek Jarosz—Director of AI Product Development at Salesfloor. “But ChatGPT opens up the possibility [of] a much broader and natural conversation.” 

Conversational AI vs. quizzes

Conversational AI also provides a more compelling experience than a traditional customer quiz. 

“Sometimes quizzes lead [customers] to a dead end,” says Jarosz. “You answer all these questions, and at the end of the quiz is ‘Sorry, we can’t recommend something for you [because] there’s nothing matching in the product catalog.’” 

Unlike quizzes, conversational AI does not follow a formula. Instead, it leverages NLP to ask the right follow-up questions and tailor recommendations to customers’ needs.

3 Ways Conversational AI will Transform the Customer Experience

Today, shoppers prefer chatbots—especially younger consumers. Sixty percent of 18-24-year-olds would rather interact with a chatbot than a human to find a product. 

For retailers, conversational AI is an opportunity to meet the evolving needs of consumers and increase engagement. Here are three ways retailers can enhance the customer experience with conversational AI.

1. Optimize the online shopping experience

Let’s face it—online retailers have not been able to replicate the experience of a physical store. Online websites can be challenging to navigate. Product selection can seem endless and value unclear. The result is an average cart abandonment rate of 70%. 

With conversational AI, retailers can enhance the online shopping experience. Jarosz uses an example of a wine store. “A chatbot could ask, ‘Do you like strong wine? Do you pair it with beef, with pork? Do you like notes of oak or berry in your wine?’” he says. 

“Maybe the shopper likes notes of fruit. We would then add a fruit icon to our wines. The shopper would know, ‘These wines are recommended for me based on what I previously discussed with the chatbot.’ It’s much more natural.”

With conversational AI, retailers can better guide shoppers through the online experience—encouraging exploration and engagement. 

2. Deliver personalized product recommendations

In the past, retailers relied on third-party cookies to make personalized recommendations. But recent data privacy changes—such as Apple’s iOS14.5 privacy update or Google’s announcement to phase out third-party cookies—have given retailers a reason to worry. 

For Jarosz, conversational AI unlocks new opportunities for personalization while building consumer trust. “For example, [customers] can say, ‘I like Zoe Kravitz’s fashion style, what does she wear?’”

At the same time, conversational AI can extend the conversation. “Customers can say, ‘I’m looking for a suit to wear to my daughter’s graduation from university. The graduation is in May. What would you recommend?’ That becomes another open-ended question,” says Jarosz.

Retailers can use conversational AI to recommend the right suit and introduce accessories—like matching shoes or belts. With more personalized dialogs, conversational AI unlocks opportunities for upselling. 

3. Improve the post-purchase experience

If a customer does have a question or a concern about their order, the customer service experience is critical. According to a recent survey, 40% of respondents said they’d switch to a competitor if their favorite brand took more than 30 minutes to reply. 

“There has already been a bit of automation to streamline customer service tasks. With ChatGPT, retailers can free up more,” says Jarosz. 

With conversational AI, retailers can resolve customer issues faster—including answering frequently asked questions and providing multilingual support. 

Elevate the Customer Experience with Salesfloor

In today’s competitive marketing, a positive customer experience is essential to driving revenue and building brand loyalty. With conversational AI, retailers can nurture more robust relationships with customers. 

But deploying conversational AI requires the right tools. “You have to be very careful if you’re going to put something out there,” warns Jarosz. “You’re going to be compared to [ChatGPT].” That’s where Salesfloor comes in. 

Salesfloor is an all-in-one customer engagement platform. Maestro—our conversational AI application—is one of the leading providers helping retailers deploy conversational AI. With Maestro, retailers can power virtual sales advisors to deliver a seamless, hyper-personalized customer experience. 

Book a demo today to see how Salesfloor is revolutionizing the customer experience with conversational AI.

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