How Generative AI Wins Shoppers, Converts Browsers

Generative AI ChatGPT screen feature

Generative AI tools like ChatGPT can help drive conversion and improve CX (credit: Mojahid Mottakin on Unsplash)

Despite concerns about what generative AI heralds for society and humankind, in the form of warning letters from prominent tech executives and academics, many consumers are excited about the prospects for the technology.

According to a 2022 Ubisend study, 27% of consumers worldwide are very interested in generative AI-based tools. And when you look at the use of generative AI for things like customer service, 95% of consumers believe it will be a benefit.

With growing pressure on merchants from increased competition and weakening consumer purchasing power, many are left wondering how best to manage this next tech leap. Like every technology-driven shift in commerce, smart merchants will take a customer-first mindset when evaluating available generative AI solutions and investments.

Automated Customer Service

From the shopper’s perspective, the most common integration of generative AI into the ecommerce experience has been through automated customer service. While automatic case creation, auto-suggested knowledge content and chatbots have been commonplace for some time, the pendulum of communication preferences has swung rapidly in favor of text over talk.

Driven by millennials, sometimes referred to as “Generation Mute,” many people no longer expect to interact with a live customer service representative. This opens the door for merchants to automate order inquiries and returns, better understand customer needs and improve response times, all while collecting data to improve the experience in the future.

In fact, this type of data collection can be key to both sales forecasting and generating personalized recommendations. But most importantly, it provides a value-add for customers that is tangible and immediate, while generating significant savings and increased loyalty for merchants.

Demand for Product Protection

Generative AI tools for product protection are another compelling way to earn customer loyalty and repeat business. Popular brands like Apple and Best Buy may have helped normalize product protection for higher-end electronics. But the industry has expanded dramatically in recent years, making product protection services a powerful tool for all ecommerce sellers.

A recent survey by Mulberry showed that over 80% of consumers say that if a payment method included shopping protection, they would use it for some or all of their purchases. Additionally, nearly one-third of consumers said they won’t even shop with a brand that doesn’t offer product protection.

Beyond expanding the universe of products that can be protected, AI is helping to increase utility for buyers. By combing through troves of information instantly to understand buying behaviors and protection claims data, shopping protection can be integrated into the sales funnel, making the service more appealing, relevant, customized and easier to use for shoppers.

Easier Integrations

Despite consumers consistently ranking shopping protection as a high-value benefit on par with cash back, many retailers and payment platforms have been challenged to integrate it into their sales funnel. Roadblocks range from simple inertia to technical or integration challenges.

Fortunately, new generative AI models are easier to integrate and outsource, making product protection offerings more attainable. Available through simple APIs with seamless user interfaces, they can easily be fitted into an online storefront and integrated with back-office technology stacks. There is no need to build custom offerings in house or retain teams to manage product protection programs.

Individual retailers can tap providers directly or in some cases work through established ecommerce partners like payment processors to activate them. Once live, these solutions are largely automated with pricing, claims processing and customer support, all handled by the third-party partner.

Maintain a Customer-First Mindset

The key to driving adoption and usage of generative AI-powered shopping tools is to ensure they deliver customer value and fit seamlessly into the shopping experience. Having a customer-first mindset ensures peace of mind and helps better convert browsers to buyers.

AI tools like automated customer service and enhanced product protection that support customer needs allow you to differentiate yourself, boost conversation rates, increase average order value and create more loyal, lasting customer relationships.

The emergence of new, powerful tools that can be easily integrated into ecommerce flows mean these wins are attainable by even more retailers and ecommerce marketplaces. With a continued focus on building smarter, more efficient technology through generative AI, the ecommerce trend is clearly set to grow and expand. Consumers can expect to have an experience that mirrors or exceeds that of a brick-and-mortar store.

Chinedu Eleanya is CEO of Mulberry