2019 Conversational AI Recap

Conversational commerce is on the rise, and 2019 saw key developments laying the groundwork for one-to-one customer experiences to dominate shopping in the year to come.

Increasing usage of mobile devices and social media have transformed consumers’ relationships with brands. Shoppers not only expect the convenience of 24/7 access to information about brand offerings; they also expect instantaneous responses that take into account their individual needs. Meeting those expectations can boost the bottom line. Consulting firm PwC found shoppers are willing to spend up to 16% more for a positive customer experience.

Enabling direct dialogue with customers helps brands measure up. Of consumers who engaged in conversational commerce, 45% said they did so to access the product information they needed, 35% said they wanted an instant answer, and 33% said they enjoyed how easy the service was to access, according to a Facebook/BCG study.

Not only do consumers increasingly appreciate the benefits of conversational commerce, but more and more platforms now exist for brands to communicate directly with shoppers. Three key technology advances in 2019 paved the way for conversational commerce to become more widespread still:

Companies with Data Prowess Pulled AheadThe so-called “360-degree view” has long been a holy grail for retail brands seeking to deliver superior shopping experiences. But the challenge is steep: unifying customer profile data across touchpoints is difficult enough, but the ability to extract meaningful, actionable insights requires big-data processing capacity and, increasingly, tools backed by artificial intelligence (AI) to do the heavy lifting in real time and at scale.

It’s not surprising, then, that 48% of retailers surveyed by BRP were still in the planning stages of real-time unified data initiatives in 2019. At the same time, the vast majority of companies recognize that data is an essential ingredient for superior customer experiences: 86% told PwC they were in a race with competitors in 2019 to extract value from data.

The payoff is real for the 9% of companies in BRP’s survey who had implemented unified data initiatives that were working well: A University of Texas study found that optimizing data by just 10% could result in a 14% sales lift per employee, or more than $2 billion annually for a Fortune 1000 company.

Within the conversational commerce realm, retailers with unified customer profiles can serve consumers wherever they shop via one-to-one interactions that take into account their holistic behavior and preferences. Multi-channel retailer Pac Sun saw a boost in post-purchase engagement for customers who opted to receive SMS-based transactional notifications and recommendations based on their prior brand interactions.

More Use Voice Channels – But Not to Shop (Yet)

The rise of voice-activated intelligent agents has been nothing short of meteoric. “Smart speakers” such as the Amazon Echo have been on the market for only five years, but already a quarter of U.S. households have one, according to Pew. Voice search usage overall  has grown by 40% just since 2017, eMarketer found, with a third of the U.S. population interacting with voice services via their smartphones or speakers.

Companies are responding as access to voice services widens. For example, Amazon’s Alexa now boasts more than 100,000 “skills” — experiences triggered by voice commands — double the number available a year ago. Leading brands like 1-800-Flowers and Domino’s Pizza have designed voice-powered interactions intended to provide consumers with convenient means to locate and order products without the intermediary of a screen.

So far, though, the results have been decidedly mixed. Technology researcher Forrester tested the four major intelligent agents — Alexa, Siri, Google Assistant, and Cortana from Microsoft — across six commerce industries and found that just 35% of queries were adequately answered; instead, the machines struggled with context and failed to arrive at direct responses.

RCS Readies for Prime Time

As mobile adoption has become nearly universal, SMS text messaging has been an effective means to reach consumers — but also one that’s historically been underused by retail brands, with just 11% of businesses using messaging over mobile carrier networks.

But that may soon change, thanks to the adoption of RCS (Rich Communication Services), which began in earnest in 2019 and has just been rolled out  to all Android users in the U.S. through Google’s Android Message tool. This new texting format will enable features popular in online messaging apps such as Facebook Messenger and WhatsApp, including read receipts, stickers, and group chat.

RCS can also support application-to-person (A2P) messaging, enabling retailers to launch automated text-messaging services, and even transactions. As a result, Juniper Research predicts RCS growth of 290% over the next four years.

What were your company’s 2019 conversational commerce highlights, and what are your 2020 priorities?

You can learn more about conversational AI and how automating the shopper experience can engage your customers at every touchpoint by exploring Linc’s platform and solutions pages. Or take a look at how leading brands like Lamps Plus, Levi’s, Carter’s and others are using an automated customer assistance platform as part of their customer experience strategies in their businesses today, in our resources page.

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