AI-powered self-service is the future of physical retail

At the start of the Covid-19 pandemic, retail was among the most impacted industries: over 17,500 chain stores closed in the UK in 2020. At the same time, e-commerce growth numbers went through the roof. According to Digital Commerce 360, “the pandemic facilitated a gain of around $218 billion in e-commerce.” 

In the spring of 2022, it might be too soon to talk about getting back to normal, but the overall GB retail vacancy rate decreased to 14.1%. New stores are opening and it comes as no surprise, as traditional shopping experiences still offer lots of value. In the post-pandemic world, people particularly enjoy going out and doing tactile shopping. 

At the same time, we’re seeing companies that grew dramatically during the pandemic struggling a little because people are moving to traditional outside experiences. For example, Netflix reported the loss of 200,000 subscribers in the first quarter of 2022, while Peloton is said to be temporarily halting production of its connected fitness products to control costs. It’s not like people abandon online altogether, but finding the balance between physical and digital experiences is the trend that will dominate the next few years.

People always have questions before they buy

The past two years of using mostly highly personalised online services transformed customers’ expectations of physical shopping. There’s one thing that applies both to online and traditional shopping: people always have questions before they buy.  There are even companies who build their business around that need: Go Instore, for example, brings a real person from the store to tell online customers about products online. People need advice before purchasing and start a call with an actual shop assistant on a web chat.

Another thing that makes online so great is that users get access to a visual of everything: they know that shoes already come in a different colour, and that size 42 is out of stock. In a physical shopping experience, customers have to go and get somebody to do that – there’s the time involved which a salesperson could have spent doing something else. 

In physical stores, there is only a limited number of people who can answer those questions. Businesses cannot scale their staff to meet the demand: be it thousands of customers walking around the store or thousands of customers on the website. Businesses cannot afford their sales staff to answer all those questions all day long, it just doesn’t make sense operationally. It doesn’t make sense for a salesperson to give 20 minutes of their time to every customer, especially in businesses that have a smaller margin, like fashion.

To offer customers the personalised service they need, businesses can rely on digital strategies they would normally use online to convert customers to use them in-store too. If a customer is interacting with certain products businesses can recommend other products, or notify customers they’re looking at the last item in stock to create urgency and get them to check out faster. Social proof is another great tool: notifying customers that 30 people have just bought the jersey they’re looking at in the last 3 days. All these different types of things will come together to create value.

The future of retail: advanced tech meets traditional experiences

So, customers always have questions before purchasing and need service to convert, the question is how to scale it – and that’s when our technology comes in. People always carry smartphones with them and Google and Apple payment services. So the smartphone is their primary interface to the world. The most important thing here is to combine the traditional shopping experience and all the benefits that digital technologies bring to e-commerce. 

Technologies like QR codes, NFС tags, and proximity beacons, help businesses create interactive experiences where customers can then get personalised information or individual product recommendations without the need to interact with the sales assistant. This in turn enables businesses to scale the expertise of their in-store sales staff to thousands of customers concurrently.

When people walk around the store, they can choose to engage with a salesperson themselves, but if the experience is facilitated through a mobile app, a proximity beacon can help indicate the experience and proactively reach out to the user. That way customers can get access to the real-time information on the products, get their questions answered and do things that would have traditionally required a salesperson to do. 

On the website or social media, one can easily enable self-service with AI. This way businesses can treat every customer individually and provide them with support on an easily accessible communication channel. That support can take the form of a virtual shopping assistant helping people with their decisions by giving them access to real-time information.

Tovie AI is constantly exploring ways to apply advanced conversational technologies to physical retail: its Shopping Assistant solution enhances traditional shopping experiences that have value by pairing them with things that proved efficient in e-commerce. That enables self-service so that people don’t have to hunt down a salesperson to figure out that a pair of shoes comes in a different colour, what the material it’s made of or if they have a different size in stock. As Covid-related health concerns remain pressing, allowing customers to serve themselves and get access to information they need quickly and without any face-to-face interactions with the sales staff caters to the growing safety expectations.

Virtual assistants and the power of microservices

When starting a Conversational AI project in retail, it’s important to keep in mind that digital assistants work best when the experience is very narrow and focused. One of the main mistakes businesses make with conversational tech is trying to automate everything at once. This one is a no-brainer, but when trying to do everything, chances are you will do everything very poorly. It’s better to accomplish one thing but particularly well. That’s why we believe in having every bot trained on specific products. Of course, these bots can answer general questions about the store, business hours and policies, but fundamentally they are here to help customers with these specific questions – the size, the stock and so on. By scoping the conversations and setting the context, businesses can build virtual assistants that are truly helpful.

We often see companies choosing to build one giant convoluted conversational AI project, which takes forever to get into production, only to get disappointed with the result. But we believe in microservices because they allow businesses to build small bits of functionality – one particular thing at a time. One particular bot that does X, one particular bot that does Y – businesses can manage them independently, work on them independently, connect them if necessary, discard one or update one, it won’t affect the other. These bots can truly add value to traditional shopping experiences.

Summary

So, we’re entering a new era of physical retail shopping and we believe that it will be about bringing traditional and digital experiences together, taking the best from both worlds. We also believe that AI-powered conversational technologies like chatbots and virtual assistants can add an unprecedented value to those experiences, empowering self-service, scaling employee expertise and ensuring health safety.