Harnessing the Power of Conversational AI to Revolutionize Modern Digital Marketing.
In the early 2010s, the demand for mobile apps surged. The global retail Companies we worked with that time, sought to capitalize on the app economy, striving to stand out in crowded app stores. Client's mantra we worked with was simple:
"We want an app. Make us play and grow in the app stores."
It was a time of rapid innovation and expansion in mobile technology, with smartphones and app stores opening new digital horizons.
However, as we progress through the current decade, the landscape has dramatically shifted. The COVID-19 pandemic accelerated the need for digital interactions, pushing consumers to explore new stores, products, and buying methods.
75% of consumers worldwide switched to new shopping behavior since the early 20's
According to McKinsey, three-quarters of consumers switched to new shopping methods during the pandemic. As we navigate this new wave of technology, driven by generative AI (Gen AI), organizations must rethink their digital strategies. Merely having an app is no longer sufficient.
Rethinking Digital Transformation
The pandemic has highlighted the importance of digital transformation, but true transformation goes beyond technology. It's about rethinking business models and aligning digital investments with business goals. Gartner predicts a significant investment in chatbots and digital assistants through 2025. Yet, companies must look beyond the hype and focus on meaningful changes in products and processes.
Personalization: The Key to Success
Personalization has become a cornerstone of modern digital marketing. Consumers now expect personalized interactions, and companies that fail to deliver face the risk of losing customers. McKinsey reports:
71% of consumers expect companies to provide personalized interactions
76% become frustrated when this expectation is not met.
Conversational commerce, which includes live chat, natural language interfaces, and messaging apps, offers a powerful tool for delivering personalized experiences. Messaging apps like Messenger, Viber, WhatsApp, Kik, and WeChat have become central to this shift, allowing brands to engage with customers in meaningful ways.
Overcoming App Fatigue
Despite the increased time spent on mobile devices, brands face challenges like app fatigue, with users downloading fewer apps. Research shows;
Over 40% of users are not downloading additional apps.
20% are downloading fewer apps.
This highlights the need for brands to offer more value within their existing apps and leverage the power of conversations.
Gartner expands also on how digital behavior is changing:
Consumer demand more self-service options
Now all the data, organisations have collected for years, can get structured to get personal with hyper-targeted digital experiences
Consumer's don't mind (AI) avatars acting as their advisor, butler or concierge
More generations rather send messages than picking up the phone
Case Studies in Conversational Commerce
Brands that have embraced conversational commerce have already seen significant benefits. For instance, H&M and Sephora have utilized personal-shopper bots on the Kik Messenger platform , while Uber's taxibot operates on Messenger, and Taco Bell's Tacobot on Slack. These examples illustrate how brands can leverage messaging apps to scale personalized interactions.
In the early days of chatbots and virtual assistants,we have pioneered conversational commerce on Kik messenger app and with big North-American retailers co-creating the first conversational commerce example.
An early adoption of conversational commerce by these companies didn't hurt their bottom line. At the contrary. The have implemented in a robust digital-first infrastructure encompassing data structuring, cloud adoption, and API utilization.
Embedding their LLM's with the revolutionary Open AI capabilities sets the stage for front line AI-powered customer conversations, even more personal and hyper-targeted including to new segments of customers.
Mastering AI-powered customer conversations
Digital marketeers can now fuel new additional (commercial) value into their apps. As mentioned,the key to success here is to increase the impact of in-app conversations by personalization, meaning your no.1 business problem are your specific customer problems sitting in your customer operations and digital marketing!
How you can set your organisation up for success?
As we like to say in our own client conversations, 'don't build a new app, transform your thinking';
Virtual assistants potentially automate up to 80% of customer operations, offering human-like conversations which we call routine interactions (incl. answering frequent asked questions). The remaining 20% can be handled by real-humans (more complex interactions). Your win: quicker responses, less frustrations and more time to innovate and scale your business
With the advent of large language models (LLMs) and advanced AI technologies, companies can now combine external data with proprietary data to create powerful digital assistants. Just make sure you use Open AI in combination with your private cloud to avoid dumping all your business and system data in the model.
We start pioneering with conversational commerce with North-American retailers in 2016. However the promises of personalization are so much bigger now and leading global retailers invest big in AI enabled by the main force, OpenAI. Open AI launches significant updates which fuels the conversational AI game with additional Intelligence and creativity enabling ongoing new digital marketing strategies.
Bringing in more developers is not the answer to embrace AI as they likely extend more business rules in your rule-based system. Instead invest in developing dialog systems that focus on finding the conversation's intent, ask follow-up questions, send reminders, and adapt as per user's response. In our practices this saves your customer operations on average 5 minutes per call. Depending on your call volumes, this can make your business case shine with millions of Euro's/Dollars in FTE costs.
As can be read in the well-written paper on how to win at Gen AI by platform guru Sangeet Choudary, its more about finding your key control points. And then establish an ultra-agile organisational model with rapid development cycles of teams with model engineers and UX designers (instead of just data scientist) resulting in UX innovation. Its how we worked in the early days with Kik.
The Future of Conversational Commerce
The evolution of machine learning, natural language processing (NLP), and generative AI has been exponential since 2023. Companies that adopt these technologies can gain a competitive edge by focusing on customer problems and delivering personalized solutions creating greater digital customer experiences with AI. Gartner's predictions underscore the importance of chatbots in driving digital change.
Revolutionizing Customer Interactions in the next digital age
Having spent nearly three decades in digital transformation, At Appsolute Value we have witnessed the shift from web-based businesses to mobile-first strategies, and now to AI-powered customer interactions. To succeed in this new era, companies must focus on customer experience, leveraging conversational commerce to deliver personalized, context-rich interactions.
At Appsolute Value, we have helped North American retailers with retail AI solutions to enhance their digital strategies through conversational commerce. By embracing the power of messaging apps and AI, brands can navigate the challenges of app fatigue and deliver exceptional customer experiences. As we continue to explore the potential of Gen AI, the future of conversational commerce looks promising, with opportunities for increased personalization and customer engagement.
Questions answered
We like to share our experience in digital transformation. During our various conversations with business management, we get a lot of main questions from within the business landscapes. Read on if you want to know more about the topics we shared in this blog.
1. What is Conversational Commerce?
Conversational Commerce refers to the use of messaging apps, chatbots, and other conversational interfaces to facilitate online transactions and interactions between businesses and customers. It leverages artificial intelligence (AI) to provide personalized and interactive experiences, enhancing customer engagement, improves the overall shopping experience and driving sales.
2. How does digital transformation lead to eCommerce growth?
Digital transformation involves leveraging technology to streamline processes, enhance customer experiences, and drive business growth. By embracing digital tools and strategies, businesses can optimize their eCommerce platforms, improve online visibility, and create seamless customer journeys, ultimately leading to increased sales and revenue.
3. How has the shift from mobile apps to conversational AI impacted e-commerce?
The shift from traditional mobile apps to conversational AI has significantly enhanced customer engagement and satisfaction. Conversational AI enables personalized interactions, reduces app fatigue, and addresses customer queries more efficiently, leading to higher conversion rates and improved customer loyalty.
4. Why are companies investing in conversational AI?
Companies are investing in conversational AI because it offers a scalable way to provide personalized customer service, streamline operations, and boost sales. By leveraging AI, businesses can handle a large volume of customer interactions while maintaining a high level of personalization and efficiency.
5. What are some examples of successful conversational AI implementations?
Successful implementations of conversational AI included in this post are just some of the examples. We also refer to some of our own case studies. You can find more about our case studies here. These conversational AI examples demonstrate how brands can use AI to enhance customer interactions and drive sales.
6. What is app fatigue and how does conversational AI address it?
App fatigue refers to the phenomenon where users become overwhelmed by the number of apps available and reduce the number of apps they download and use. Conversational AI addresses app fatigue by integrating engaging, personalized interactions directly within popular messaging platforms, reducing the need for standalone apps.
7. How does conversational AI enhance personalization in customer interactions?
Conversational AI enhances personalization by using advanced machine learning algorithms and natural language processing to understand customer preferences and behaviors. This allows AI systems to tailor responses and recommendations to individual users, creating a more engaging and satisfying customer experience.
8. What are the key benefits of using conversational AI for businesses?
Key benefits of using conversational AI include improved customer engagement, higher conversion rates, increased customer loyalty, and operational efficiency. By automating routine interactions, businesses can focus on more strategic activities and provide better overall service to their customers.
9. How can businesses get started with conversational AI?
Businesses can get started with conversational AI by identifying key customer interactions that can be enhanced through automation, selecting the right AI tools and platforms, and partnering with experts in the field to implement and optimize their conversational AI strategies.
10. What future trends can we expect in conversational commerce?
Future trends in conversational commerce include more sophisticated AI capabilities, greater integration with other digital marketing tools, increased use of voice interfaces, and broader adoption of AI across various customer touchpoints. These advancements will further enhance the personalization and efficiency of customer interactions.
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