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How Retail Businesses Can Use AI to Meet Festive Season Demands

To capitalise on the upcoming festive season, businesses must identify obstacles preventing them from fully meeting customer expectations and refine their strategies to deliver memorable shopping experiences

John Batista

Gone are the days when shopping was limited to browsing shelves, navigating crowded aisles, and enduring long checkout lines. Today’s customers expect seamless experiences that combine convenience, speed, and personalisation. They want a wider range of products, larger inventories to ensure immediate availability, and immersive shopping experiences. Most importantly, they want a consistent and seamless shopping experience, regardless of whether they are shopping online or in-store. 

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To meet these demands, retailers have been investing in advanced technologies like edge computing, IoT, and Artificial Intelligence. Features such as conversational AI for commerce, one-click purchasing, digital wallets, and automated check-outs have made transactions faster and convenient, allowing shoppers to complete their purchases with ease. Similarly, the integration of AI and IoT in logistics and supply chain management have enhanced efficiency, reduced delivery times and elevating the overall experience. Despite these advances, only 38 per cent of businesses report being highly effective at consistently delivering positive customer interactions, as per a survey conducted by HBR Analytic Services in association with Tata Communications.  

To capitalise on the upcoming festive season, businesses must identify obstacles preventing them from fully meeting customer expectations and refine their strategies to deliver memorable shopping experiences. A report by Integral Ad Science estimates 88 per cent of Indian consumers to increase their holiday shopping budget this year, with a staggering 79 per cent consumers planning to shop online. Hence, one thing is certain – there is a substantial opportunity for retailers and brands to expand their customer base this holiday season. And here's how retailers can take advantage of it. 

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Immersive Shopping with Programmable Voice and Video 

By leveraging programmable voice and video, retailers can provide real-time customer support, virtual shopping assistants, and interactive product demonstrations, creating a more immersive and personalised shopping experience. For example, a father’s search for a latest electronic gadget for the daughter’s Diwali gift can become exceptional if a tech expert connects with him via video call, providing tailored advice without the hassle of sifting through complex manuals. 

Similarly, a shopper preparing for Navratri could enjoy a virtual tour of festive home decor options, guided by a store expert who recommends items based on their preferences. This immediate, personalised interaction not only builds trust but also enhances customer satisfaction and fosters repeat business. 

Real-Time, Hyper-personalised Email Campaigns 

The festive season also means consumers getting bombarded with many generic offers. But what they really need are the deals that matter to them, and that is where hyper-personalised email campaigns can help. By personalising emails based on individual preferences, shopping history, and real-time behaviour, businesses can ensure that customers receive updates that truly resonate. 

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Personalised emails help retailers stand out by delivering timely updates on customised discount codes, reminders about items left in the cart, and updates on order status, new arrivals, and exclusive offers. For example, ahead of Diwali, a retailer could send personalised email recommendations based on customer preferences, like suggesting specific outfit styles or offering discounts on popular festive decor items. Or picture getting a reminder about a festive apparel left in the cart with a special discount just for you. Such emails create a seamless shopping experience, making customers feel valued and understood. 

For retailers looking to make an impact during the festive season, it’s all about sending the right message, at the right time, to the right customer. 

Optimising Customer Communication through SMS and WhatsApp  

While SMS remains a key channel for retailers, integrating more innovative platforms like WhatsApp can further amplify their communication strategies. To stand out, retailers should also explore Rich Communication Services (RCS) which can deliver interactive and visually rich messages. 

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By combining the reach and reliability of SMS with the interactive and visually rich features of WhatsApp and RCS, businesses can deliver more impactful and engaging messages. For example, during Diwali, SMS can alert customers for new offers, while WhatsApp and RCS can showcase product catalogues with immersive AR-powered demos, creating a more comprehensive customer experience. 

Fraud Prevention and Secure Communication During Festive Shopping Surges 

The festive season brings not only a surge in shopping but also an increase in online transactions, making secure communication and fraud prevention more critical than ever. According to an Ipsos study commissioned by Amazon India, 71 per cent of Indian consumers intend to shop online this festive season in 2024. Hence, ensuring secure transactions is paramount for both retailers and customers. 

AI and automation can play a pivotal role in ensuring secure transactions, especially for tasks like multi-factor authentication and OTP verifications. For instance, during peak shopping periods like Diwali, ensuring the safe delivery of high-value gifts such as electronics or jewellery is paramount. Retailers can implement AI-driven fraud detection to prevent unauthorised purchases and reduce delivery issues. Additionally, businesses partnering with courier services can use AI to send secure, real-time delivery updates, minimising redelivery attempts and ensuring customer satisfaction. 

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Both RCS and WhatsApp offer verified sender profiles, building an additional layer of customer trust and reducing fraud risk. By verifying the identity of the messaging company by Google and Meta respectively, these platforms ensure that customers can confidently engage with legitimate businesses. 

In conclusion, today's shoppers want more than just discounts—they seek personalisation and meaningful engagement that further elevate their experience. By integrating AI-driven automation with seamless human-led interactions, brands can create smart, immersive shopping experiences that exceed expectations. Hyper-personalised interaction touchpoints, such as customised notifications and real-time support, not only boost sales but also foster long-term loyalty, helping retailers thrive in an increasingly competitive, tech-driven market. 

(Author is Vice President and Global Head – Customer Interactions Suite, Tata Communications. Views are personal)

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