Chatting Up A Storm: How India Shops In The Era Of AI Assistants

Like every good millennial, I have a few quirks that people from generations that flank me, fail to understand. I work hard, I live for the weekends and while I spend perilous amounts of time on my phone, I really do not enjoy talking to people on it. There’s a reason for this last bit: People like me spent our early adulthood fascinated by the powers of a mobile device, only to be bombarded by unsolicited loan requests, attempts at credit card fraud and often, terrible customer care. Especially when it comes to shopping, I am happiest if I can avoid talking to a salesperson, whose job demands that they upsell, no matter what I’m buying.  

Which is why I am the ideal target audience for conversational commerce. You know those chat icons on ecommerce apps that discreetly ask if I ‘need help finding the perfect style?’ Or the AI chatbot messages that take me through a detailed, but succinct, conversation to know exactly what I want to complain about? I’m here for this seamless integration of conversational commerce, which makes my shopping experience efficient, and often, surprisingly personal. 

The Basics

In very simple terms, conversational commerce refers to the use of chatbots, messaging apps, and voice assistants to interact with customers and facilitate transactions directly through these platforms. It also encompasses services like customer service through WhatsApp messages. I like to think of it as one more milestone in the history of how we shop. In some ways, it combines the best of both worlds – a personalised shopping/customer care journey and immediacy, minus the friction or anxiety associated with speaking to another person. Especially in a post-pandemic era, where human interaction can be fraught, the ability to transact or get redressal within a single conversational thread is a blessing. 

The level of personalisation has meant that conversational commerce has been employed very effectively in developed markets in the West. Brands like Sephora and H&M were very early adopters. In some parts of the US and UK, Starbucks introduced the ‘My Starbucks Barista’ feature within their mobile app, where customers could place their orders via voice command or messaging interface. For the majority of office-goers, this was a particularly useful and accessible feature during busy morning commutes. The AI also learnt from a customer’s order history, and offered personalised recommendations and reminders.  

AI Is Not Always Regrettable

We are primed to believe that human interaction is the underpinning of our society – and that by extension, AI is to be mistrusted. And while this adage holds true for the most part, there are plenty of instances where human interaction can actually prove to be counterproductive.  

This is especially relevant when it comes to ‘sensitive’ purchases – for instance, lingerie. For so long, women have had to deal with awkwardness at best, and insensitivity at worst, when it comes to intimate-wear shopping, considering most salespeople they’d encounter were men. The Indian lingerie brand, Zivame, found a way around that, by offering a discreet shopping experience. To enhance purchase decisions, the brand introduced ‘fit code’ technology, where AI bots offer fitting advice and product recommendations directly through chat. This significantly reduces the barrier to purchase in the case of a product that shoppers much prefer to try before buying. According to the brand, more than 7 lakh women have used the flow on their platforms. 

For brands, conversational commerce is also about reaching their audience where they already are, versus attempting to draw them to your own platform. Every marketing manager knows the gargantuan challenge that that presents! However, combining efficiency with an existing platform enables a new route to potential and existing consumers. Domino’s Pizza understood this when they introduced ‘DOM The Pizza Bot’, a virtual ordering assistant that customers in the US accessed through Facebook Messenger and other platforms, a few years ago. The service simplified the ordering process by guiding customers through preset messages in a conversational manner. The chatbot also answered common questions about the menu and deals, and provided customer support.  

Services like DOM also reduce the load on human customer support executives. They eliminate repetitive tasks, and reallocate human effort to a place where it is most effective and necessary.   

Imagine the potential in the retail landscape of India! We’re a country that has experienced rapid digital transformation: Smartphone penetration in India has skyrocketed from 76 million to 760 million in just over a decade, opening up markets across geographies, especially price-sensitive ones in Tier II and III cities and semi-urban areas. It’s here that the impact of new technology can really be felt, when research indicates that conversational AI has the potential to reduce customer service costs by as much as 30 per cent. This is the kind of scale that traditional marketing methods simply cannot match. 

Language Heterogeneity A Concern

Another aspect to consider in a country like India, is our literacy rates and diverse linguistic landscape. We might be a country of savvy mobile phone users, but our apps and web platforms are ill-equipped to efficiently serve the heterogeneity of Indian language speakers. That’s a challenge that voice-based AI services can rise to. In a country where dialects change every few hundred kilometres, local language integration is long overdue. 

To see how conversational commerce can benefit brands and markets, we need to look no further than China. A 2016 McKinsey survey titled ‘How savvy, social shoppers are transforming Chinese ecommerce’, underscored the importance of social media in initiating online purchases and noted a significant increase in consumers using platforms like WeChat for purchasing decisions. The survey also found that consumers in Tier 3 and 4 cities were ‘outspending those in high-tier cities online — and the gap is likely to get wider’. These less developed markets had significant untapped potential, as many residents still hadn’t started their ecommerce journeys. The report went on to state that ‘major ecommerce platforms are investing heavily to acquire customers and build logistics networks in low-tier cities.’

It’s easy to see then that conversational commerce is not just a trend but a strategic necessity. The key takeaway for marketers is clear: the future of customer interaction in India’s burgeoning digital economy will rely heavily on these technologies. For brands, the challenge will be to continuously innovate and ensure these interactions remain seamless, engaging and, most importantly, human. And the brands that will thrive are those that can harness the power of conversational technology to create genuine connections with their consumers. 

Ruchika Gupta

Guest Author Ruchika Gupta is the Marketing Director at Beam Suntory India