Retail Readiness Shifts to AI-Powered Conversations Over Search

A new approach to product discovery for online shopping may soon be available in an advanced chat box on your favorite retail website. The goal is to duplicate the comfort level of in-store conversation between shoppers and sales representatives.

Retail product discovery platform GroupBy is testing this conversational chat agent approach with Google, which hosts the retail platform on its Vertex AI with Gemini Cloud to run this approach on a broader basis.

The testing could indicate if using chat to shop is a generational thing. So far, they see more people using social media to shop. Hence, a chat-type interface is more important or interesting to that consumer segment, according to Arv Natarajan, director of products at GroupBy.

This testing phase is part of an ongoing upgrade in retail readiness as merchants prepare for the upcoming holiday shopping season. Much of that readiness involves job-shifting as artificial intelligence takes over much of the work merchants had to do manually. With the addition of AI, one of the most innovative merchandising trends is creating a conversational-like online shopping experience.

Store greeters served a valuable purpose for in-store selling. That initial human-to-human contact between shopper and store associate helped to create a satisfying customer experience (CX). Now, online retailers using the proper platform can produce the same kind of conversational experience with human-like exchanges to help customers find what they need and complete the online transaction.

Sure, search engines and chatbots have been around for ages. But that pop-up window inviting you to type a question or help need lacks retail appeal. Expect a new shopping experience with generative AI-powered conversations to create an in-store shopping experience for online product discovery.

“AI-powered product discovery technology now can do that to improve CX. It also automatically maximizes omnichannel revenue. So, it is not just driving people to buy things online but also looking at omnichannel holistically,” Natarajan told the E-Commerce Times.

Product Discovery on a Higher Level

Finding what to buy online has existed since the invention of e-commerce. Typically, consumers rely on search engines to find products. Even on retail websites, the search window is the go-to method. That is how people are trained to search.

“But I think especially with younger generations, there is this new channel or existing channel that used to be their social media outlet, which is now becoming more and more relevant for product searches,” observed Natarajan.

For instance, when pursuing social media, a user is curious about their favorite singer’s jacket and clicks on a picture. The search engine then goes to a website where that jacket is sold.

“That kind of shopping, I think, will be more important to the younger generations as they get to the point where they buy things online. Retailers should keep current with the core experience of e-commerce and product discovery and make sure the e-commerce platform they use has the technology to create the best customer shopping experience to drive users through their website to show them their products at the right time,” Natarajan said.

Online merchandisers must stay tuned in to innovative trends and consider the CX comprehensively.

For instance, the search engine is critically important to a business-to-consumer retailer as well as a business-to-business distributor to ensure they sell the right products to the right person at the right time. He noted that the B2B shopping experience is becoming more like the B2C experience, especially as this younger generation moves into buyer roles.

Redirect the Conversation?

AI integration is leading one of the most innovative merchandising trends by creating a conversational-like online shopping experience. But the process requires retraining consumers to shop a new way, suggested Natarajan. Consumers are used to using keywords in search windows.

When they transfer that experience to retail chat boxes, they respond the same way. For instance, “I’m looking for a dress,” “I’m looking for a T-shirt,” or whatever. If retailers can train users to have a more conversational type of entry, the search becomes, “Well, I’m going to a wedding next month. I need a dress.”

That is the kind of question a shopper would ask an associate in the store. Then, you would have a conversation to clarify descriptions such as the temperature or climate of the wedding, the style of the wedding, and the theme. That encourages more detailed responses like “I’m looking for a linen dress or a night dress.”

“It will be interesting to see how some of these conversational AI-to-human experiences go during the holiday season. It is not yet proven, and I think this will be a good chance to test this approach,” said Natarajan.

He noted that it’s still in the early days of adoption, and he has yet to see the expected increase in engagement with the chat box for retail product discovery.

“I think that is because people are not getting trained to shop like that. When they use a chatbot, they think it is customer support. Retailers are experimenting and trying out different user experiences, but I don’t think consumers are there yet,” he observed.

Getting customers there will take a major player in the market — like Amazon, Target, or Walmart — to train their shoppers with a new user experience that is more chat-like. Only then will retailers start to see that uptick across the board in a more general way.

Retailers can then integrate a conversational feature into the main search box, keeping customers engaged with product viewing without disrupting the e-commerce experience.

Each time the customer adds information during the chat interaction, the screen updates the products. The customer sees new products based on the interaction with the AI agent.

Holiday Marketing Prep Beyond Innovative Search

According to Natarajan, online retailers should follow a checklist to avoid sales failures. The top priority in their run-up to holiday marketing is load-testing the infrastructure. Is it stable? Is it ready for holiday traffic? Can it handle the expected increase in traffic once the holiday starts?

Then, ensure the product catalog is clean and up to date. If an out-of-date inventory or lead product information has errors, even an excellent search engine will not be able to show the right products. Verify data is updated and ready to meet the expected holiday traffic.

Next, what are the business objectives for the holidays? Are there dedicated pages in place, like a special sales or clearance page? Have you created specific themes for your holiday landing pages?

Another critical aspect is analytics. If you can’t measure performance, you can’t improve it next time. That’s why having a robust analytics platform to A/B test and validate your hypotheses is essential.