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How AI is set to dominate conversational commerce and engagement – even if businesses aren’t yet investing

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AI has rapidly become the dominant force in shaping customer engagement strategies and, coupled with CPaaS developments, is poised to take over conversational commerce in the coming year driven by consumer desire to chat.

According to data in Capterra’s 2023 Retail Chatbots Survey, 56% of respondents who have used ChatGPT say they’re more likely to shop from a brand offering a similar tool. The report also finds that current chatbots are not up to the job and, having experienced ChatGPT-like services consumers are increasingly expecting this level of service.

The report finds that widespread adoption of conversational AI chatbots is expected as large companies partner with ChatGPT or roll out their own bots. As AI-driven customer service becomes the status quo, growing businesses will follow suit, turning to chatbot vendors for affordable options. AI-enhanced shopping experiences will greatly benefit businesses by tracking behaviour and guiding decisions throughout the buying journey with greater personalisation.

However, we are not there yet. According to the study, traditional chatbots fail to meet customer expectations and lack sales prowess. Only 17% of retail chatbot users have used a bot to search for products, and just 7% have used it to receive product recommendations.

With greater capacity to handle customers nuanced and complex queries, ChatGPT-like integrations can improve the most common issues with retail chatbots. In fact, 67% of ChatGPT users feel understood by the bot often or always, versus 25% of traditional chatbot users.

“Most retail chatbots are rule-based bots and are best used for basic functions, like order shipping status or inventory checks,” says Molly Burke, senior retail analyst at Capterra. “With natural language processing, better handling of nuance, and a greater ability to personalise responses, conversational AI has the potential to improve chatbot experiences by simulating the personalization and creativity provided by human agents.”

Business buy-in needed

Business also seems to be on the same page. According to the latest annual survey of marketing industry trends from Mapp, an international provider of insight-led customer experiences, almost three quarters of ecommerce businesses believe AI is the biggest marketing trend in 2023 – but only 18% of them are planning to invest in AI technology.

Instead, the top three technologies that businesses are focusing their investment on in 2023 are Customer Insights and Analytics (70%)., Marketing Automation (69%), Audience Segmentation (59%).

When it comes to deciding where to invest in 2023, the top three areas for marketing investments are improving the use of tools and technology, acquiring new customers, and retaining customers.

Although the majority of marketers are able to initiate automated marketing campaigns in real time using customer data, 42% of businesses say they are currently unable to initiate automated marketing campaigns with their customer data.

Despite businesses embracing personalisation as a tactic when using email (89%) and social (73%) channels, only 40% are using personalisation on their website.

Patrick Guidi, Mapp’s Director of Sales for UK & Northern Europe, comments: “Customer acquisition and retention are both priorities this year, yet key revenue-driving opportunities are still being missed in the customer journey. A lack of customer knowledge and insights is often the cause here. However, marketers plan to be smarter with their budgets this year by improving the use of tools and technologies and focusing on first-party data collection to learn more about their prospects and customers. Moving forwards, having this owned data will give deeper insights into the customer journey and be used to optimise experiences on owned channels as a primary focus of their spend.”

Over to the ai?

Generative AI is already making inroads here too. The use of services such as ChatGPT to write compelling, SEO-ed marketing copy, emails and more is likely to see many marketers invest in AI without really realising it. As they look to invest in marketing automation solutions they will, in fact, be getting generative AI-driven services.

Similarly, the need to segment, analyse and personalise will also be enhanced by generative AI tools.

Overall, the marketing and engagement market is set to get a boost from AI. Consumers want to interact with natural sounding chatbots that are well informed and which chime with the marketing materials that they have received.

Businesses looking to embrace this, while upping their marketing automation, will then be adopting AI rapidly and widely across their business – and selling more.

Integration with CPaaS to drive this engagement into more natural conversational commerce is also set to be a big tie up between marketing, ecommerce and AI.

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