Top Conversational AI Trends for 2023

2022 saw significant growth in the adoption of Conversational AI-powered solutions among businesses. The pandemic saw many of them undergo a digital transformation journey, and conversational interfaces, a cost-effective way to manage customer experiences, saw significant interest and increased ROIs in the past year. Customers, who have now warmed up to these AI-powered interfaces, expect an even better experience going forward. So as we venture into 2023, here are the top trends to watch out for in the Conversational AI space.

Conversational AI adoption on the rise

Post-pandemic, customers have become more comfortable interacting with businesses through AI-powered chatbots. As a matter of fact, GenZ and millennials prefer self-service options like conversational chatbots over customer service representatives. And they also expect such interactions to be smooth, frictionless and contextually aware. That is why businesses have now started incorporating complex AI-powered chatbots as a part of their digital transformation journey.

Many businesses now use these chatbots on conversational mediums (like WhatsApp) for FAQ resolution, abandoned cart recovery and product comparison. It helps them cut costs across customer support channels, boost product sales, and provide assistance during the pre-purchase process. And in the past few years, the conversational commerce market has grown significantly, with AI-powered chatbots forming the backbone for such interactions.

Initially hesitant, service leaders are now seeing a return on their investments as the conversational AI space continues to grow, and the initial resistance to implementing such solutions has reduced significantly. The trend will continue in 2023 as businesses will aim to reduce their operating costs and boost sales by utilizing industry-specific conversational AI solutions. We can expect several of them to launch enterprise-level AI-powered chatbots to accomplish that. For many, conversational AI will remain central to their digital transformation journey in 2023.

Voice continues to rise

Within the conversational AI space, voice user interfaces are becoming increasingly popular. From smart speakers to voice-enabled tech to communication in the Metaverse, 2023 will see increased investment in domain-specific voice-enabled conversational AI solutions.

Ease of use and the intuitive nature continues to work in favour of conversational solutions powered by voice. For this reason, simple customer queries such as pricing and business hours are more suited to a voice interface as it is a more natural mode of interaction. And as self-service channels continue to dominate the CX landscape, businesses willing to deploy conversational AI solutions will need to evaluate how voice fits into their strategy.

Similarly, for brands venturing into the Metaverse, voice will become a crucial part of their strategy. This is because a significant chunk of interaction in the Metaverse will happen via AI-powered conversational interfaces. Along with it, the deployment of voice-enabled solutions in areas where conversational AI reigns supreme will continue to increase. For many customer-centric businesses, having a Voice Strategy will become a priority as they look to improve their existing CX scores. This trend will continue in 2023 as brands invest more in voice-enabled conversational interfaces.

Alexa is here to stay

With the sunset of Conversational Actions and the ongoing layoffs at the Alexa team, there was pessimism around the future of Alexa. People started questioning the viability of the Alexa program, with many labelling it as a colossal failure.

But it is clear by now that Alexa has evolved into a fully-fledged ecosystem. As an emerging technology, it has indeed come a long way. From building content experiences for kids to venturing into space, it has emerged as the clear winner in terms of being the platform of choice for voice app development. And with Google bowing out of the race, Alexa now becomes the default platform for building third-party voice apps.

In the year ahead, we will see increased partnerships between businesses and Amazon for developing and delivering voice-first content experiences to their customers. One thing that Amazon has spearheaded single-handedly is making voice-computing synonymous with Alexa. This association will bear fruit in the years ahead as a significant portion of the voice ecosystem continues to evolve around it.

ChatGPT will shake things up

Since its launch in late November last year, ChatGPT has dominated the news cycles. With a conversational interface at the forefront, the state-of-the-art language processing model quickly became the talk of the town. Users were impressed with its capability to answer seemingly endless questions. The articulate, verbose responses became its hallmark. And while the research into LLMs is still in its infancy, this was the first time the general public got a hands-on taste of the possibilities ahead. Many rushed to demonstrate their favourite use cases for ChatGPT and how it fits in their workflow. Some even labelled it as the much-awaited Google killer. LLMs quickly became the new industry buzzword.

But for what it is worth, it was interesting to note that for the general public, along with the technology, the conversational nature of the interaction played a significant role in fuelling its meteoric rise. To them, the size of the training parameters was insignificant. It was instead the quick back-and-forth nature of the conversation and the seemingly endless streams of answers which stole the show. It goes on to show that with a conversational interface, the possibilities are endless, provided that the system behind it is able to manage expectations while yielding exceptional results.

But while ChatGPT is fantastic for generating answers on the fly, businesses value the accuracy and correctness of the response even more. In the field of Customer Service, ChatGPT has opened up a plethora of opportunities. For example, before a conversational agent hands over the conversation to a human, ChatGPT can provide a summary of the interaction along with the relevant contextual details to facilitate a smoother handover. For many such human-in-the-loop solutions, a tool like ChatGPT will prove tremendously helpful.

The genie is out of the bottle, and in the time to come, investment into solutions built on top and alongside ChatGPT will surge. Businesses will partner with agencies to craft solutions for industry-specific use cases. 2023 is the year when conversational AI systems and ChatGPT (and LLMs in general) will start walking hand in hand.

Conversation Design becomes central to Conversational AI Strategy

The past few years have seen a significant rise in the design and development of AI-based chatbots. But, the prevalent perception is that, right now, quantity seems to be overshadowing quality. Businesses have now realized, albeit retrospectively, that for POCs and small use cases, out-of-the-box solutions hacked together internally work. But, for delivering delightful customer experiences, conversation design plays a crucial role.

We have seen that in the case of poorly designed graphical interfaces, the user still somehow manages to get the job done, albeit with some friction. But in the case of conversational interfaces, where the purpose is to reduce cognitive load and save time, a poorly designed interface has the exact opposite result. The users drop off in the middle of the conversation if the agent fails to understand their requests. Apart from this, the expectation for context retention is also high. And as the interactions have become more nuanced, the appetite for “smart” conversational agents has increased significantly. So, it has become increasingly important to incorporate design principles right from the beginning of the development process.

In conversational AI, which is a constantly evolving field, it is often easier to blame the non-effectiveness of the channel or the lack of affordances rather than introspect into the root causes plaguing the AI interfaces. In 2023, this will cease to be the case as we will see more and more partnerships sprout between businesses and agencies specializing in delivering bespoke Conversational AI solutions. And as time passes, a design-driven approach to such solutions will start gaining industry-wide relevance.

Closing Thoughts

With all the recent developments in the field of Conversational AI, in 2023, the industry is yet again ripe for innovation. From cutting costs and generating revenue to delivering delightful customer experiences, conversational AI will remain front and centre of the digital transformation journey for businesses.

At Voiceano, we help unlock business value and transform customer experiences through Conversational AI. Just ping us at hello@voiceano.com, and we will set up a call. 💬 😃