AI Speech Bots & Chatbots: Opportunities in Contactless retail

An Emerging New Economy

As economies across the globe reopen and organizations learn to operate in the new normal, COVID-19 continues to subdue consumer confidence and alter buying preferences – even altering buyer segments.

Emerging themes in customer behaviors are represented by a shift to value and essentials, a flight to digital and omnichannel, shocks to prior loyalties, the health and “caring” economy, and the homebody economy.

In the U.S., visible safety practices and care for employees and customers has become even more important, with the reliance on online business now surpassing 10% in many retail categories according to Mckinsey.

Prior to the Coronovirus, a whopping 85% of purchases occurred at physical stores,, emphasizing the value that consumers found in an in-store shopping experience. Now, contactless retail is a major use case for omnichannel delivery including curbside pickup, delivery and drive through services.

A recent survey shows only 9% of US consumers complain of decrease in discretionary time while 26% claim to have more disposable income in the current socially distant world. As a result consumers are engaged in new or renewed activities during their spare time. Many are trying new recipes, engaging in DIY and home improvements and embarking on new skills. The pre-COVID consumer persona is now altered and new insights have to be calibrated as consumers adjust their buying behavior to new circumstances.

The changing face of the consumer

I vouch from personal experience – In the last few months we have visited DIY and hardware stores due to the emerging interests in handicrafts and DIY projects in the family. While we checked out new tools and supplies; we had many questions.

A Forbes article talks about the need to educate employees more about the products and brands in the store so they can act as friends and consultants to shoppers. While large brick and mortar retailers come under intense online competition, health and safety scrutiny, and operating margin pressure, the opportunity to invest on the employee workforce may not be without challenges.

In Store Omnichannel Integration

Store traffic had been thinning even before COVID and retailers must now reimagine a new role for the brick and mortar establishment.

‘Buy online, pick up store’ (BOPIS) contactless delivery is a good example of leveraging omnichannel integration. Omnichannel frameworks seek to integrate customer journeys across multiple channels without losing context and enable personalization across each of these touchpoints.

With access to customer data from offline and online (for example, data on loyalty and purchase behavior across channels, stores can tailor their customer interactions accordingly.

Tight integration across channels is important to understand consumer needs and support in product discovery and advertising, especially inside stores where a customer can actually peruse the height, width, weight, and texture of a physical product and not just rely on average online customer review.

Experts think brick and mortar establishments may be able to emerge as customer discovery centers and not just points of transaction. When that time comes, AI-driven bots may be instrumental in this transformation.

Contactless Interactions with Bots

Bots are conversational interfaces that can be integrated with mobile and web apps and can use speech or text to interact. Most support speech recognition (ASR) for converting speech to text, and natural language support (NLP/ NLU) to recognize the intent and enable engaging user experiences with lifelike conversations.

The ability to use algorithms to analyze vast repositories of previous conversations to build natural language models to serve future customer asks is an exciting possibility of AI.

Here are some interesting application of bots in retail space are as follows:

2016, saw a major upcoming trend with the launch of H&M’s chatbot on messenger app Kik.
Macy’s optimized chatbots for mobile and web primarily to locate items and provide customer service
Sephora is pushing towards conversational commerce with its debut on the messaging app Kik.
Since 2017 Target allows shopping in the United States through Google Express and with the Google Assistant (except for Alaska and Hawaii)

Some emerging use cases for in store application with corresponding in store interactions are as follows:

Browsing and location discovery:- Guiding the customer to the only can of “chestnut black” spray paint for instance based on in store customer location.
Recommendation:- Recommend products and services based on DIY projects or purchase and search history
Pickup and Shipping- For large items help in contactless scheduling for shipping or for large items to be brought up front
Unstated wants or understanding sentiments- Use advanced analytics and text mining at scale to understand customer sentiment- goods that should be carried, persistent points of sale termination in the customer journey and barriers in closing sales
Feedback- Bots are a great way to capture customer feedback — both explicit and implicit. For instance, customers could provide help to store management to identify spillage and shrinkage through a conversational app, just the way you can report cop cars in a navigation app
Complete in store payment- Instrument chat apps to be able to accept store specific payment and reduce contact.

Use cases for speech and chat conversational bots are specific to the type of retail business, the usual challenges customers face and also the level of automation warranted for profitable store operation through digitization.

Cultural and Economic Considerations

The type of retail business and the customer base will dictate the rate of adoption of customer facing AI solutions. Customers who are more tech savvy and use smart devices on a regular basis would be attracted to safer contactless options to meet their needs; whereas this may be a detractor in situations where customers like human face to face interactions.

According to McKinsey, retail store operations need to shed 20-22% of cost and become leaner to survive the post pandemic environment.

From the point of view of a retail CXO any new tech solution should lead to improvement of operating margins, a reduction of risk and a consolidation of operating procedure. Most cloud providers and several digital experience management companies provide the ability to design omnichannel customer journey and speechbot / chatbot interventions leading to quick integration.

In fact, retail companies rediscovering themselves as tech companies are building their own frameworks, indicating that both speech/chatbots are going to form important toolkits for contactless retail reorganization.

About Chisel Analytics

Looking to implement an omnichannel customer experience? At Chisel Analytics, we provide advisory services to help you identify opportunities and get started implementing the process, technology and people you need to sustain your operations in this new normal. Contact us today to get started.