This just in: conversational AI is becoming an essential tool for e-commerce leaders everywhere. Whether you keep it in your back pocket to manage the busiest moments in the retail calendar year, or you’re going all-in on a conversational commerce strategy, there’s no questioning the powerful capabilities of this technology that’s quickly becoming table stakes for leading brands. Read on to see some of the remarkable stats proving conversational AI isn’t going anywhere, and learn how brands of all shapes and sizes are using it to increase e-commerce sales and boost efficiency on their customer support teams.
All signs point to 2022 being a monumental year for the growth of conversational AI. In 2021, 1.4 billion people around the world interacted with a chatbot. And with businesses projected to spend almost $78 billion in 2022 on cognitive and AI systems—over three times the amount spent in 2018—even more people will be using conversational AI this year.
Savvy brands have already started to take advantage, connecting with customers across Facebook, Instagram, website chat, and more, with Gartner reporting 70% of customer interactions in 2022 will rely on tech like machine learning and chatbots. In other words, customers are experiencing the conversational AI revolution firsthand, and it’s changing how they shop. Just look at how e-commerce sales are going through the roof.
Conversational AI and E-Commerce: A Match Made in Revenue Heaven
E-commerce sales in the US will hit $1 trillion for the first time in 2022, with mobile commerce accounting for almost 50% of that total. And that means incredible growth in the conversational commerce market. After all, shopping on messaging apps is up, with messaging on Facebook Messenger and Instagram increasing by 40% since early 2020, according to The Economist.
Data from eMarketer says there’s going to be over 171 million mobile messaging app users in the US in 2022, up from ~150 million in 2018. It’s no surprise the conversational AI market is on the rise too, with consumer retail spending using chatbots set to reach $142 billion in 2024 from below $3 billion in 2019.
Looking more closely at retail, survey data from Square’s Future of Commerce report (2022 edition) shows 42% of brands plan to sell via text or chat or already do. Conversational commerce is leaving its mark on individual retail sectors too:
- Cosmetics: Square also found 31% of customers have already bought something from a beauty brand via text.
- Fashion: 70% say clothing is what they shop for most on social.
Sporting goods: online sales are now outpacing brick-and-mortar sales, after surging during the pandemic in 2020.
Food: 56% of online shoppers had already bought groceries (or planned to start) using conversational AI—even before the pandemic.
Meanwhile, furniture is expected to become the top e-commerce purchase through 2025, with one out of every three customers preferring to buy furniture online.
Chatbots increased retail sales by an average of 67% in 2021. So, the ties between conversational and e-commerce are as strong as ever. It’s clear why more and more brands are making the switch to conversational AI heading into 2022.
Brands of All Shapes and Sizes Turn to Conversational AI for 2022
Leading the way is apparel giant Lacoste. You can chat with Lacoste’s virtual assistant, Crocodile, when you shop for your next polo. The fashion brand is now turning to conversational AI to keep delivering its trademark premium service on customers’ favorite social and chat apps… and earn its piece of the pie of the projected $8 billion in cost savings delivered by chatbots to businesses in 2022.
Popeye’s Supplements’ P0P gives on-point recommendations
Meanwhile, Popeye’s Supplements, Canada’s largest sports-nutrition retailer, launched a bilingual Heyday conversational AI (French, English) by the name of “P0P.” Like Lacoste, Popeye’s goal was to integrate conversational AI with its different channels—Facebook and Google’s Business Messages—to connect with their customers around the clock. Spoiler alert: it worked.
P0P successfully automated 82% of customer conversations during Summer 2021 helping to push customer satisfaction to an all-time high of 90% that September. The AI chatbot also saved Popeye’s at least 50% in customer-service costs.
P0P didn’t stop there: thanks to an integration with the Shopify Plus e-commerce platform, P0P now delivers product recommendations for an even more personalized customer experience (CX). P0P has a success rate of 60% automatically finding the right products for customers. The end result? P0P’s boosted conversion rates by asking customers the right questions at the right time, creating a similar experience to what they’d get in the store.
Kusmi Tea revitalizes online personalization with KUSM
France’s Kusmi Tea also launched a Heyday conversational AI. Kusmi aims to personalize their CX as much as possible. So, they had concerns the AI, named “KUSM,” could keep up. But since KUSM’s August 2021 launch, customers haven’t had a single CX complaint: adopting conversational AI has been an overwhelmingly positive experience for customers and the brand.
Between August and October 2021, KUSM started more than 8,500 online customer conversations, for a 94% automation rate. Besides answering FAQs, KUSM helped customers add to their carts, creating upsell opportunities, with 16% searching for a product right in the chat. With brands and their customers turning to conversational AI and commerce more and more, look for the trend to continue.
Non-Stop AI Innovation for Retail Brands
According to Deloitte, which tracked conversational AI-related patents filed in the US from September 2019-20, there are five distinct areas of progress in the market. The top three are:
Training conversational agents
Complex conversation handling
Personalization
Not listed by Deloitte, but also worth a mention is proactivity. Proactivity is another area of innovation, where a chatbot can have a personalized conversation with a customer, immediately after connecting for the very first time, or even send an alert about a delayed delivery on its own.
These patents and areas of innovation are only increasing the value of conversational AI and pave the way for the technology to be used in different sectors. But, as Lacoste, Popeye’s, and Kusmi show, they have already positively impacted the development of conversational AI for retailers, which will no doubt continue on the same trajectory.
Your brand’s conversational AI game plan in 2022
Ready to start your conversational AI journey? You can follow fashion retailer Groupe Dynamite (GDI)’s lead. Alejandro Reyes Alaluf is GDI’s Director Client Experience. Reyes Alaluf spoke with Heyday, sharing his key to success with the conversational AI platform, namely to take it slowly one step at a time:
Reyes Alaluf still noted the onboarding and launching process itself was incredibly fast. He credits Heyday with the smooth transition, letting GDI get to where they could actually collect the data to start.
The results? With Heyday, GDI’s average response time to a customer question dropped by six minutes in the first four months. GDI also experienced dynamic increases in their number of customers on chat for both their brands (29% for Dynamite and 33% for Garage).
The number of customers on chat is only rising across the board, making conversational commerce the only way to go. Conversational AI takes you there.
Want to take a page out of GDI’s playbook? Let Heyday help you take your e-commerce business to where you need it to go this year. Book a demo today.