How Retailers Can Use AI to Improve Customer Engagement & Conversions

With the rise of artificial intelligence (AI), there have emerged a plethora of innovative ways to leverage AI tools and software to improve customer engagement and conversions


Retailers and businesses of all types have many unique opportunities today to improve customer engagement and conversions by leveraging artificial intelligence (AI).

From AI analytics tools for analyzing customer data and drawing actionable insights to AI chatbots for engaging customers in real-time and AI location-based prediction apps for facilitating personalized recommendations, AI tools present many ways to drive increased business performance and sales.

Here’re some of the best ways to leverage AI tools and software to improve customer engagement and conversions:


1. Analyze Data to Understand Customer Behaviors, Preferences, and Needs


Retailers can use different AI tools to analyze customer data and understand what attracts and engages shoppers. For example, retailers can use real-time AI analytics tools to determine which products are most popular with customers, what marketing campaigns are most effective, and what features or products appeal to shoppers.

Once retailers better understand customer behavior, they can use AI tools to create customized customer experiences. For example, retailers can use AI programs to recommend products based on past purchases, provide targeted marketing messages, or create personalized shopping experiences.

AI can also help retailers to identify and respond to customer issues and complaints. By quickly detecting and addressing customer concerns, retailers can improve customer satisfaction and loyalty.

In other words, AI can help retailers collect and analyse customer data to create a more personalized and engaging shopping experience, leading to increased customer engagement and conversions.


2. Improve Customer Experience with Location-Based Prediction


There's a reason your smartphone can give you directions to the nearest Starbucks; it’s because of location-based AI predictions feature. AI predictions apps use your current location to anticipate your needs and provide you with relevant information or recommendations. They can even help you find your parked car.

The use of location-based AI predictions is becoming increasingly popular and sophisticated. AI predictions tools are now used to recommend products, services, and content, to provide directions and other navigation tips, and to alert you to sales and other promotions near you.

Generally, AI predictions tools rely on input from multiple sources, including past behavior, current location, and data from other users in an area. This data is processed by algorithms that identify patterns and trends. The predictions are then delivered through notifications, recommendations, or customized content.

Using AI location-based predictions can be a powerful way for businesses to improve customer experiences. By using your current location to anticipate needs, companies can provide relevant recommendations and information to improve user experience and boost engagement with their products or service.

In retail, location-based predictions can be used to send notifications about sales and promotions near you, recommend products based on past purchases, and direct people to your current location. In the travel industry, location-based predictions can be used to provide directions and other navigation tips.

Location-based predictions can be used to improve the experience of customers who are using public transportation. In London, for example, the city's transportation agency use predictions to provide real-time information about the status of transportation systems and to alert passengers about disruptions.

Location-based predictions based on AI technology are a powerful tool for businesses to improve customer experiences. Using your current location to anticipate needs, companies can provide better and more relevant information and personalized recommendations to improve boost customer engagement and conversion.


 3. Engage Users & Answer Queries Using AI Chat bots


Chat bots are computer programs that mimic human communication. They are programmed to respond to customer queries in real-time and communicate with users in the most natural way possible.

Chat bots can be added to messaging apps, websites, or social media pages to engage users. AI-enabled voice search is another solution that is now being used in ecommerce for automatic customer interaction to improve customer engagement and conversions.

Chat bots can answer customer questions, provide product information, and even process orders. They can also respond instantly to customers' questions, which is helpful when customers need answers quickly.

The benefits of using chat bots in retail include helping customers find the information they need quickly and easily. Chat bots also reduce the workload of customer personnel, freeing them up to handle other tasks.

Additionally, chat bots can be used to collect customer data. This data can be used to personalize and improve the customer service experience and create more targeted marketing campaigns that lead to high conversion rates. 


 4. Get Support and Assistance from Virtual Assistants (VA)


Virtual assistants are programs that use AI technology to replicate human interactions. They can help business owners with their administrative tasks and provide support to customers with their shopping needs. Popular virtual assistants include Amazon Alexa, Apple's Siri, Google Assistant, and Microsoft's Cortana.

Virtual assistants built for businesses can be incorporated to provide product information, personalized recommendations, and purchase assistance to boost sales and improve the shopping experience. VAs can remember customer preferences and history, which helps to boost engagement and conversions. 

Additionally, virtual assistants can help to reduce the workload for business owners, managers, marketers, and other service personnel. VAs can handle tasks such as respond to emails, perform market research, provide customer service as first point of contact, and schedule and remind you of meetings, reservations, and to-do tasks.

So, if you frequently find yourself at the end of your rope and with more tasks than hours in the day, an AI digital assistant or virtual assistant service could take some of the strain.


5. Incorporate Contactless Payments Solutions


The idea of going contactless and ending queues has gained a lot of traction as people look for faster, more convenient ways to pay for the goods and services they need. This entails using a contactless credit/debit card or smartphone to make payments without queuing up at a payment terminal.

AI technology is at the heart of the contactless economy revolution, providing support for contactless payments solutions across industries like retail. AI ensures more convenience is attained for a truly contactless economy. And the benefits of going contactless are many, besides ending queues at retail stores and other service stations.

Firstly, going contactless is faster and more convenient than using cash and a debit or credit card. You simply tap your card or phone on the payment terminal, and you're done. Once your payment is confirmed, you're good to go. This is especially useful if you're in a hurry or don't have cash on you.

Secondly, going contactless is a more secure way to pay for goods and services. Your card or phone is protected by a chip and PIN, making it more difficult for criminals to steal your information. 

Moreover, going contactless is a more eco-friendly way to pay, eliminating the need for paper receipts. It is also a safer payment method to avoid unnecessary contact during these COVID times. 


6. Use Sentiment Analysis to Analyze Customer Feedback


Sentiment analysis uses AI and natural language processing, text analysis, and computational linguistics to identify and quantify customers' emotional states to improve the customer experience.

There are a few different ways to use sentiment analysis:

       i. To identify positive and negative words in customer feedback to get a sense of the overall feeling

      ii. To track the positive and negative sentiment over time to see if it changes

     iii. To group customer feedback into positive and negative categories

     iv. To compare customer feedback with competitor feedback to see how you stack up

      v. To look for patterns in customer feedback (e.g., what are the most common positive/negative comments?)

Sentiment analysis is a powerful way to better understand your customers' emotions. By identifying positive and negative words and phrases in customer feedback, you can determine people's overall feelings about your product or service.

You can also track the positive and negative sentiment over time to see if it changes. This can be helpful in understanding if your latest update or change has had a positive or negative impact on customer sentiment.

Another use for sentiment analysis is to group customer feedback into positive and negative categories. This can give you a good overview of your pain points and where you need to focus your attention.

You can also compare customer feedback with competitor feedback to see how you stack up. This can help you identify your strengths and weaknesses and know where you need to improve.

Finally, looking for patterns in customer feedback can help understand what people like and don't like about your product or service. This can help you focus your efforts on improving the most critical areas for your customers.




Ultimately, there are many ways retail businesses can turn to AI to improve customer engagement and conversions. Carefully select the AI applications and services that will meet your specific needs.

With the right AI tools, retailers (and other businesses too) can look forward to improved customer engagement and conversions that will help them stay ahead of the competition.

James Wilson is a seasoned Content Writer for ten years at Net Solutions, a software company that develops products & platforms that elevate customers’ experience, helps you earn their loyalty, and grow your business. He has also worked for industries like IT, software & product design and development, Lifestyle, and written some great insights on user experience design, mobile app development, and eCommerce.