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Envisioning a new era of Indian retail with Conversational AI

With the advent of Conversational AI, retailers are able to have deeper engagements with customers and shift the focus from discounts and timely delivery to convenience and experience-based shopping.

Envisioning a new era of Indian retail with Conversational AI

Friday November 06, 2020 , 4 min Read

India is one of the fastest-growing retail markets in the world, ranking no. 2 on the global retail development index. A host of factors including increasing disposable income, time-strapped individuals, single-households, growing brand awareness, easy access to credit, are fuelling this exponential growth.


As per the BCG-Retailers Association of India report, the industry is estimated to cross the $1 trillion-mark by 2025. The sector has also been one of the top employers of the country, contributing significantly to India's GDP.


Ecommerce has brought further disruption in this sector and is touted to touch 8% of India's retail trade according to a white paper by Technopak Advisors. The Indian Government's initiatives in opening up foreign investment in the retail sector is another indicator of its enormous potential.

Impact of Covid-19 on retailers

However, Covid-19 came as a major blow to the sector. Operations were shut down across the country. This impacted the dominating small-format retailers severely. While the country is emerging out of the pandemic, low demand and disrupted supply is making doing business challenging.


The need-based retail segments like food and groceries are showing some signs of recovery, but other major categories including fashion, beauty, consumer electronics are lagging. This might make achieving the 2025 goal difficult.

Digital taking over traditional

The situation has prompted retailers to look at new ways of reaching and engaging with consumers. The largely fragmented and small-format retailer dominated sector is experimenting with digital innovations over traditional means. Pure play brick-and-mortar players who thought they did not need a digital storefront have started integrating technology in their marketing and engagement strategies.


We are witnessing investment in AI/ML technologies to offer an assistive, personalised online shopping experience to drive sales. This enables them to provide customers with a retail experience that’s far more efficient than the brick-and-mortar experience.


Existing e-retailers are also revisiting their engagement strategies. They are looking at omnichannel engagement to drive business and revenue in a post-Covid world. They realise that discount pricing and on-time delivery will not impress an informed consumer anymore.


Time-strapped Indian consumers are relying on convenience and experience-based shopping. It is time to stop relying on traditional marketing means.

Conversational AI to the rescue

Innovative marketers in the retail sector have turned to Conversational AI to drive deep engagement, generate leads and drive conversions.


It acts as a gateway to an interactive, data-rich experience, with an opportunity for “storytelling” well beyond traditional means. It also enables cost-efficient, convenient data collection, targeting, and segmentation.


Using natural language processing and automation techniques, brands are increasing online consumer engagement. Reducing friction in communication has enabled brands to improve the feedback loop making consumers feel more connected during the online customer journey. Conversational AI-driven virtual assistants don’t just assist in answering product, feature and pricing questions, but also enable brands to emulate the offline experience of personalised, in-person interactions online.


During the pandemic, leading fashion and beauty brands have leveraged Conversational AI to create virtual experts that recommend products based on consumer interactions. This has led to deeper business engagement and is ultimately driving an increase in sales.


These always-on, 24*7, personalised channels of communication that work across all three pillars of digital engagement (Web, Social and Search) have also helped brands create detailed and granular audience profiles based on garnered data.


Evolved audience segmentation further enables these retailers to micro-target and build more successful campaigns for re-engagement – altogether driving more economic value to the business. Apart from chat-based engagement flow, companies are adopting innovative formats – online games and quizzes to deliver persistent and personalised interactive engagement.

The path ahead

Conversational AI can significantly benefit the unorganised retail sector of India that makes up for almost 88% of the total retail market (IBEF).


The sector deals with data on a day-to-day basis and Conversational AI cannot just streamline this process but also generate valuable and actionable insights that can enable targeted campaigns and increased business conversions.


In an experience-driven era, it will enable retail-heavy brands to deliver a superior digital experience compared to the in-store experience and swiftly move from a product-centric marketing approach to a service-centric one. We believe Conversational AI is the future of retail consumer engagement.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)