Using Conversational AI to Make Commerce Happen


Conversational AI has the capability to scale and contribute to cost savings while being highly efficient.

The always-online, instant-gratification-seeking customers of today have grown used to the convenience and customization offered by Conversational Commerce. Last year, consumers worldwide spent $41 billion over these channels, and that number is expected to climb to $290 billion by 2025. This growth can be credited to conversational commerce’s ability to empower customers to interact with brands naturally. That is, the same way they interact with friends and family–on their preferred channel, at the ideal time and in the desired communication mode. For instance, according to Twilio, 81% of consumers say communicating with businesses is often difficult, and closer to 90% say they would prefer to be able to send and receive messages to and from brands. Moreover, Gartner predicts that by 2025, 80% of customer service organizations will abandon native mobile apps in favor of messaging for a better customer experience. That insight presents exciting opportunities for brands to leverage new channels and technologies to find a place in the market share.

by Raghu Ravinutala

But the communication needs of today’s connected world are also always shifting, which requires a nimbleness on the part of brands to reach their customers. The need of the hour, then, for any brand is to be able to connect with customers across their journey, with communication shifting from siloed multichannel interactions to an integrated omnichannel model. In other words, a conversation that starts on Instagram should be able to seamlessly continue over WhatsApp and end up as a live-agent call. Frictionless adaptability is the crux of creating an omnichannel Customer Experience (CX) that puts brands on the path to unlocking great value.

Seizing the Social Conversational Commerce opportunity

When we think of the most effective way to conduct commerce via conversational AI, brands should adapt an all-inclusive approach to provide a consistent and continuous experience for their customers. Essentially, their strategy should include the ability to drive automation across different modalities, be it voice or chat, or across web or social, etc. For instance, when it comes to channels, social is making exponential gains and is expected to grow at three times the rate of traditional ecommerce.

According to Gartner, consumers in Asia/Pacific are heavily engaged with social internet apps where WhatsApp, WeChat, Facebook, LINE, and many other social apps rank among the most popular in many countries. We are seeing tremendous growth on WhatsApp, whose use has become increasingly widespread in the past few years, especially in the UK and APAC regions. Aside from processing over a hundred billion messages daily, the platform offers an effective commercial use case because text messages on the platform are non-intrusive, get the message across and see a 95% open rate. With WhatsApp having over 40% conversion rates, there’s a great chance that automated brand notifications will be read and prompt actionable responses.

When it comes to the US, Facebook Messenger stands out with 61% of internet users aged 16 to 64 using the platform each month, making it an important customer touchpoint for many brands. A conversational Facebook ad, whether it’s a Click-to-Messenger ad, or a Sponsored Message, enables brands to engage with customers and generate leads in a highly cost-effective way. For instance, with Click-to-Messenger ads, brands can retarget potential customers who click them with follow-up automated messages by AI agents, ultimately, contributing to the conversion rate.

Brands are also capitalizing on the popularity of more such channels including iMessage, WeChat, Google Business Messages, Instagram, and Viber for their unique capability to deliver differentiated AI agent-initiated conversations. These messages proactively engage with customers through promotions, campaigns, back-in-stock notifications, abandoned cart reminders, etc. For instance, if it’s your birthday month, you might receive a message from an airline with a special rate to entice you to treat yourself to a trip. If you recently added a product to a wishlist, an online retailer might send you a prompt on the messaging platform of your choice, reminding you to get yourself that little something you’ve been eyeing. Essentially, also opening up avenues for brands to create opportunities for upselling and cross-selling their products and services, all powered by Conversational AI.

The rise of Voice Commerce

In 2021, we witnessed a surge in voice as a channel, largely stemming from millennials and Gen Zers who prefer dictating text messages and conducting searches through voice. In 2021, 64.2% of US adults between the ages of 25–34 used a voice assistant. It is expected that 48.2% of US adults will use a voice assistant by 2025. We can infer from this trend that voice as a conversational AI channel will see a significant rise in adoption in the next two to five years.

With Alexa, Siri, Google Assistant, etc. becoming household names, awareness of voice technology and its capabilities is pushing forward rapid adoption. Voice assistants can already engage in over hundreds of languages, positioning the technology as a major tool for driving and shifting consumer behavior across the globe as adoption escalates.

Conversational AI has the capability to scale and contribute to cost savings while being highly efficient. With Natural Language Processing (NLP) as their backbone, the new generation of voice assistants — dynamic AI agents — are designed to deliver a more natural conversational experience that reduces that “bot” feel that customers typically dislike. Initial call-duration trends seen in Yellow.ai user data suggests that customers are actually finding interacting with these AI agents more beneficial for resolving their queries. The automated speech recognition and response technology today enables fast, accurate, lifelike conversations in multiple languages, dialects, speaking styles and emotions for a variety of use cases, like customer self-service, agent assistance and speech analytics.

As voice assisted technology evolves, the potential for customization is unending. Case in point, to deliver ease of conversation, voice-assisted technology can now support automatic subtitling and translation into languages of the consumer’s choice, covering hundreds of languages and dialects, which can have far-reaching effects on promoting inclusion and hyper-personalization. Furthermore, voice biometrics, a technology that is still in its nascent stages of adoption, can, through speech recognition, enhance the efficiency of customer conversations as well.

Metaverse to become the new interface for commerce

With the Metaverse adoption gaining ground across industries, it will soon become an integral virtual interface in delivering services such as product and service marketing, branding, and sales. The possibilities in the metaverse are wide-ranging, from buying and donning digital clothes for one’s avatars in the metaverse to opting for a virtual test drive of a car. Thanks to metaverse, brands would be able to leverage opportunities to create new modes of commerce through virtual stores and elevate customer experience. However, AI- specifically conversational AI is needed to make this possible. Brands would use digital avatars, powered by conversational AI and equipped with the advanced capabilities to converse like humans, to guide their customers through the process of shopping in the metaverse. Conversational AI enabled virtual assistants with multilingual and multicultural voice-first capabilities will become a bridge for communication between customers and businesses in the metaverse.

Let’s take the example of the retail industry. With commerce shifting to metaverse, every customer would have access to their own AI-enabled digital personal assistant available on their phones, assisting them in finding just what they are looking for – a pair of shoes in their size or the accessories to match their cocktail dress. Furthermore, virtual goods, properties and accessories are taking off as digital humans move from skin to new realms. Many consumer product companies already have digital nonfungible tokens (NFTs) and are leveraging the intangible value of their brand for marketing and to drive new revenue streams. The complete management of inventory can be scaled and sales can grow with intelligent upselling through conversational AI. As such, conversational AI will power interactive retail and commerce, real-time customer support and engagement, digital wayfinding, and customer experience in the metaverse.

If we’ve learned anything since the rise of ecommerce, mobile and now voice and metaverse, it is that technology is most effective when it enables people to do more of what they enjoy – faster and more intuitively with fewer steps and less noise in-between. Conversational AI is helping deliver greater efficiencies and more robust solutions for businesses to directly engage their customers wherever they are. While it may still seem novel today, before you know it, dynamic AI agents will prove to be an irreplaceable technology for every major brand.

Raghu RavinutalaRaghu Ravinutala is the CEO and Co-Founder of Yellow.ai, a leading next-gen Total Experience (TX) Automation platform, enabling enterprises to deliver human-like interactions that boost customer satisfaction and increase employee engagement at scale. Raghu co-founded Yellow.ai in 2016, with a vision to make customer and enterprise interactions more effective and effortless. Since its inception, Raghu and his team have successfully expanded Yellow.ai’s presence across the U.S., Southeast Asia, Europe, the Middle East, Japan, Australia and Latin America with 1000+ customers in 85+ countries.


Photo by Rendy Novantino on Unsplash.

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