Continuous innovation and adaption to developing technology might help you maintain a leading position in the increasingly competitive e-commerce market.

Conversational AI arose to alter lead generation while also improving user experience and customer support in the e-commerce industry. Its continuous customer assistance and support, collection of customer data and feedback, product recommendations, and other features help to foster more intelligent, simplified, and user-centric business operations in the digital marketplace.

Let’s take a closer look at how Conversational AI has transformed the e-commerce business, providing a competitive advantage in lead generation and consumer experience.

How Does Conversational AI Work?

Conversational AI enables machines to interpret and process human language. It simulates genuine and meaningful human interaction using natural language processing (NLP).

Along with NLP, foundation models and machine learning (ML) are used to analyze, interpret, process, and generate human-like responses. This technology powers chatbots, virtual assistants, and other interactive systems that can communicate with users, answer queries, and complete tasks.

Conversational AI represents a transformative force in industries of the Internet of Things (IoT), healthcare, retail, and beyond e-commerce to provide better customer service through chatbots and virtual assistants, providing 24/7 support and swiftly resolving customer queries and issues. 

Imagine a patient named John recovering from surgery at home who is greeted by an AI assistant with a friendly,  “Good morning, John. How are you feeling today?” John speaks into his tablet, describing his pain levels and symptoms. The AI analyzes his inputs, identifies potential issues requiring immediate attention, and notifies his doctor in real-time. It also reminds John to take his medication, logs his daily health metrics, and even suggests healthy eating tips and gentle exercises to aid in his recovery. 

Such illustrations demonstrate how Conversational AI is revolutionizing traditional processes and improving outcomes. Let us delve deeper into how this innovative technology reshapes the e-commerce landscape, enhances customer experiences, and drives business growth.

Example of Conversational AI

E-commerce is electronically buying or selling products online. In 2024, approximately 2.71 billion people are expected to make online purchases, as it is convenient and accessible to shop anywhere. A business should establish a strong online presence to excel in the competition.

50% of firms use AI to improve operations, including conversational AI. It facilitates real-time, interactive contact between customers and businesses by addressing client inquiries, making personalized recommendations, and expediting the purchasing process in order to increase customer satisfaction and engagement.

Conversational AI can be used in a variety of ways, including chatbots, virtual agents, messaging apps, live chat, and voice assistants for e-commerce.

• Chatbots: Chatbots simulate human conversation to provide personalized product recommendations, enable shopping assistance, offer 24/7 customer support, and facilitate transactions.
• Virtual agents: Virtual agents handle a broader range of queries and provide more detailed responses, often mimicking human-like empathy and understanding. It goes beyond chatbot function to offer more complex and nuanced interactions.
• Messaging apps: Messaging apps facilitate direct and instantaneous communication between businesses and customers regarding inquiries about product details, making purchases, and tracking orders, all through a simple text interface.
• Live chat: Live chat blends human support with AI assistance to provide immediate help to customers. When an AI chatbot reaches its limitations, the conversation can smoothly transition to a human representative, ensuring that queries are resolved efficiently. This dual approach is particularly beneficial for addressing complex issues that require a human touch.
• Voice assistants: Voice assistants (Amazon’s Alexa, Apple’s Siri, and Google Assistant) allow customers to search for products, place orders, or navigate a website through voice commands. 
• Customer service with AI avatars: Use an AI avatar generator to create expressive AI avatars that tackle first-level questions and answer your users’ queries in a personalized way.

How Conversational AI Is Affecting Lead Generation & Customer Experience in E-commerce 

Conversational AI reshapes how businesses interact with customers. It impacts lead generation and customer experience. Let’s examine how conversational AI is revolutionizing these aspects.

• Boost in customer base: Conversational AI tools attract new customers by providing instant responses that reduce wait times, improve satisfaction, and increase the conversion of visitors into buyers. 
• Drive sales growth: Chatbots guide customers through the buying process by providing timely assistance and suggesting upsells or complementary products. By helping them overcome hesitation, chatbots increase sales and customer satisfaction.
• Enhanced personalization: Conversational AI collects the customer’s browsing history and preferences to personalize the customer’s product suggestions, promotions, and support. 
• Customer data collection: Through interactions with customers, conversational AI understands businesses’ audiences, which helps in doing better targeting and creating more effective marketing campaigns.
• Streamline the process of capturing leads: Chatbots efficiently capture leads by qualifying them during conversations and collecting essential contact information. It allows businesses to follow up with high-quality leads.
• 24/7 customer support: The convenience and availability of AI-powered support 24/7 can instantly answer customer questions and address concerns. 
• Voice-activated shopping: Voice assistants eliminate the need for physical interaction with devices and make shopping more accessible for those with disabilities or busy lifestyles through voice commands. 
• Personalized product recommendations: Conversational AI tracks the products the customers view, their purchasing history, and the items they add to their cart to identify patterns and predict what products a customer will be interested in next for more personalized product suggestions.
• Deliver multilingual support: With the help of NLP, Chatbots understand and respond to customer inquiries seamlessly regardless of their language preference, allowing businesses to cater to a wider audience.
• Integration of offline and online e-commerce channels: Chatbots ensure that customers enjoy a consistent and unified shopping journey, regardless of the channel they choose to engage with -physical store or online platforms.

Benefits Offered by E-commerce Conversational AI

E-commerce businesses can reap numerous benefits from integrating conversational AI into their operations – from streamlining customer interactions to gaining a competitive advantage.

• Streamlining customer interactions: Chatbots can handle routine inquiries by instantly providing answers to frequently asked questions. It frees human agents to focus on complex issues requiring a personal touch or advanced problem-solving skills.
• Improving conversion rates: Chatbots and virtual assistants offer personalized recommendations to help their buying process and reduce cart abandonment, which increases conversion rates and sales.
• Building brand awareness: The engagement from personalized recommendations and offers fosters brand loyalty and enhances the brand’s overall perception, making it more memorable and trustworthy to customers.
• Seamless inventory management: Conversational AI can also automate stock-level monitoring for inventory management. It can suggest reordering or highlighting popular items based on purchase trends to ensure that inventory is optimally managed.
• Optimizing lead generation efforts: Conversational AI gathers customer data and insights to make more effective and targeted marketing campaigns for better lead-generation results.
• Competitive advantage: Implementing conversational AI can offer an e-commerce business a superior customer experience, giving it an advantage in the competitive market.

What is Voice Commerce in AI?

Voice commerce is a type of e-commerce experience that allows customers to buy products and services using voice commands. Designed by online retailers to work with voice assistants such as Apple’s Siri, Amazon’s Alexa, and Microsoft’s Cortana, voice commerce reduces friction in the customer journey and tailors the buying experience to each person who uses it. 

Read Also: The Top Voice Commerce Platforms for Businesses

Voice-enabled commerce is a relatively new technology, but thanks to recent leaps in artificial intelligence development, it’s quickly advancing in functionality and popularity. 

In terms of practical use, voice commerce is especially well-suited for industries such as beauty, apparel, packaged goods, consumer electronics, and home improvement because of the huge number of content and products available. With voice commerce, you can discover products, look at pricing, and make purchases without manually typing in requests via search engines.

Voice commerce works at various stages of the customer journey in online shopping — from product discovery and checkout to customer service and support. 

The tech used in voice commerce deploys voice recognition and natural language processing (NLP) software to interpret voice commands and respond accordingly. Newer voice commerce models implement advanced AI and machine learning to adjust responses based on the user’s preferences, sizing, previous purchases, and location.

Whether the customer wants to compare prices for certain products, learn about different models, or add an item to a cart, voice-activated digital assistants can carry out the request in real time. 

For instance, say you’re in the market for a new coffee maker. Whether you’re at home or on the go, you can ask your smart device questions or issue commands such as: 

Hey Google, what’s the difference between a Chemex and an Aeropress?

Hey Siri, how much does a Chemex cost?

Alexa, I’d like to order a Chemex on Amazon. 

Alexa, what’s my order status for the Chemex? 

As a consumer, it’s easy to see why online shopping with voice commands is convenient. It’s as easy as asking a friend to pick something up at the store. 

For online stores, implementing voice commerce is one step closer to a complete omnichannel customer experience. You can reach your ideal customer where they are, when they need you. You’ll also reduce steps in the buying process — no need to attract customers to your site, direct them through multiple landing pages, and have them manually enter payment info. 

Benefits of Voice Commerce for Customers and Sellers

Voice commerce is an emerging channel that will develop as new technologies advance. Some of the current and future benefits of voice commerce for consumers are:

• Hands-free convenience. No need to log into accounts, type in search queries, or sift through endless ads
• Frictionless online payments. With payment info stored in smart devices, customers don’t have to manually enter credit card info
• Personalized shopping experiences. Voice assistants collect and process data from previous purchases so that every interaction is personalized for repeat customers
• Knowledgeable voice assistants. Generative AI assistants are getting smarter by the day, harnessing the world’s knowledge and sharing it with users 

Business owners will see impactful benefits as well, such as: 

• Increased customer satisfaction. With voice assistants that “know” their wants and needs, deployed by brands they trust, voice commerce will make the customer experience more empathetic and human (plus, voice assistants can easily collect feedback about how to improve customer service) 
• Reduced support costs. Much like Questions & Answers, voice assistants can also deliver operational cost savings by reducing the volume of requests to your support team. Customers communicate in their preferred way, and get the answers they need without needing to call your support line

Voice assistants will become even more beneficial as capability improves, thanks to generative AI models like ChatGPT. Voice commerce models will be able to not only reply more precisely to user questions and requests, but also anticipate user demands and prompt them to perform certain actions.

AI and the Future of Commerce

There’s never been a better time to get started with voice commerce. Here’s a few facts and figures about the current state of voice commerce within the overall e-commerce landscape:

• 20% of Google searches are voice searches
• 62% of smart speaker users say they’ll probably use their speakers to make a purchase in the upcoming month 
• The smart speaker market is expected to exceed $30 billion by 2024
• As of May 2022, 54% of U.S. consumers are using voice-activated search for retail
• Voice assistants on the market will increase to 8 billion by 2023 (up from 2.5 billion in 2018)
• The estimated value of voice commerce transactions in 2023 is $19.4 billion (up from just $4.6 billion in 2021) 

With online shopping reaching new peaks every year and the use of generative AI becoming widespread, businesses can take advantage of these new technological advances to reach new audiences.

The tech behind voice commerce may be advanced, but getting started with it isn’t as complex as it sounds. 

• Do SEO for voice search. Yes, many voice commerce systems are directly linked to search engines like Google. Items you sell via voice commerce should be linked to relevant keywords and phrases that people are likely to use when searching for products or services on voice assistants — think long-tail, full sentence keywords
• Create voice-friendly content. Write content that’s easy for voice assistants to understand and that provides the information that people are looking for. Often people engage with voice assistants conversationally, so include colloquialisms and phrases common to the spoken language 
• Offer voice-activated shopping. Aka, allowing people to purchase products or services using their voice. Bonus points if you can optimize the checkout process to occur in as few steps as possible
• Provide customer support through voice assistants and/or voice-assisted chatbots. Make it possible for people to get help with their orders or questions using their voice
• Track voice commerce results. Set measurable performance indicators such as the number of voice searches, voice-activated purchases, and voice support requests that you receive. Voice commerce is only one sales channel, and the benchmarks you set for it should be aligned with your overall company goals 
• Implement key findings from customer insights. Use tools such as Bazaarvoice’s Insights and Reports tool to transform user-generated reviews and answers into actionable insights for your e-commerce strategy

Bottom Line

It may appear that relying on Google Home or Amazon Echo to generate significant money is premature — but now is the time to experiment with the benefits it can have on your consumers and business.

Consider voice commerce to be a playground for discovering new and fascinating ways for your customers to connect with your products. You might come upon conversations you never expected to have or possibilities to enhance acquisition that were right in front of you. After all, robots are not the only ones capable of hearing. You can also listen to them.