AI-Powered Chatbots: How the Pandemic Fueled Innovation

There was a time when automation in the retail space meant autonomous point-of-sale checkouts, and chatbots were reserved solely for the ecommerce ecosystem. Opportunities were seldom explored across the retail and shopping sphere, primarily due to the lack of a requirement.

Before the dot-com boom, shopping was an activity that took place physically at brick-and-mortar stores. Even in 2019, 90% of all retail purchases took place in physical stores.

As shoppers were content with receiving customer service in real time from human retail assistants, chatbots and AI-powered virtual assistants were relegated to basic CX tasks such as recording customer feedback or for advertorial push notifications.

Digital stores and ecommerce platforms ushered in the era of digital shopping. Since it became next to impossible to establish real-time communication channels between customers and these digital shopping platforms, virtual assistants came as the saving grace. With the help of conversational AI, customers could interact with these digital agents 24/7, seek information in real time and track orders without the need for human intervention.

Virtual assistants were also utilized to scour through conversational data, analyze trends and discover shopping patterns, to help make recommendations more focused. This helped the ecommerce industry balloon to $3.3 trillion at the end of 2019.

But what about physical retail stores?

AI-powered virtual assistants were only at the precipice of importance. What was needed was a catalyst to take over and become a leading contributor across the customer journey. It came in the form of the coronavirus pandemic.

As restrictions and social distancing norms were established to curb the spread of the virus, brick-and-mortar retail establishments had to pivot toward virtual stores to stay in the game. Even with the gradual removal of restrictions, retail outlets had to operate with minimal personnel, making it difficult for customers to receive the type of customer service they were accustomed to experiencing.

A study by Retail Dive showed that 62% of customers prefer physical stores because they can feel, touch and see the product.

When customers arrived at physical stores, they often relied on human assistance to help them locate the most ideal product. Stores are now deploying virtual agents layered with conversational AI and Natural Language Processing (NLP) to guide product discovery. By using a humane tone to communicate with customers via text or voice, the NLP component analyses the context and delivers results through recommendations suited to individual preferences.

That covers the front end, but what about the backend?

Customer loyalty goes far deeper than just attractive offers at the POS and personalized recommendations. Availability and supply-demand forecasting are now pivotal requirements for customer loyalty, especially with the backdrop of the COVID-19 outbreak. With crunched supply chains and reductions in manufacturing, retail stores have to analyze trends and monitor SCM practices to ensure shelves are stocked in time. True brand loyalty stems from trust — which means trusting a store that is (hopefully) stocked and ready to serve customers.

However, one of the biggest challenges that AI-powered virtual assistants are helping to solve does not revolve around monetary gains or marketing initiatives.

When retail outlets were allowed to open up around early 2021, it became a mandate for them to track the health status of employees and even customers in real time. This practice would help in contact tracing activities in the eventuality of a potential outbreak.

By employing empathetic virtual agents, customers can record their health, which will help them realize if they are a health risk to other shoppers. When talking about personal health, businesses need to tread lightly and with sensitivity, which conversational AI achieves.

Employee health also needed to be tracked every day, in case anyone was to start displaying COVID-19 related symptoms. With the help of a virtual employee agent, employees can monitor their health and get real-time health alerts, which helps to keep colleagues and shoppers safe. 

With every growing demand, a new possibility arises. And with every setback comes a push forward. That’s what the global retail industry needed to do, and they are doing just that.


Pranay Jain is the Co-founder and CEO of Enterprise Bot and is responsible for global business and product development. With his expertise in finance, NLP and artificial intelligence, Jain has ensured that the firm is already cash flow positive within its first year of operations with clients and partners like SIX, Generali, and PwC among many other prestigious organizations. He is passionate about fintech and insurance tech and studied Economics and Finance at Bentley University.