When your brand enters the chat: How brands are using conversational AI

Conversational AI has evolved beyond simple chatbots to include multi-channel systems, offering brands new ways to create personalized and immersive customer experiences.

• This can enhance everything from shopping to customer feedback and operational efficiency.

• To succeed, brands must strike a balance between automation and the human touch, focusing on authenticity, empathy and natural language.

• This can be seen in examples such as Sephora's personalized shopping chatbot and Mercedes- Benz's AI assistant, which enhances the driving experience.

• With the right implementation, including mindful and thoughtful interactions, brands can succeed in the post-ChatGPT era and beyond.

Why it matters

As conversational AI evolves beyond simple chatbots to dynamic, multi-channel systems, brands have new opportunities to create personalized and intuitive customer experiences. These tools can enhance everything from shopping journeys to operational efficiency while building stronger connections through empathy and natural language. Striking the right balance between automation and human touch is critical for success.

Takeaways

• Personalization is essential to building deeper relationships with customers. Brands like Sephora illustrate that understanding user preferences transforms what could be a basic interaction into an experience that feels tailored, building loyalty and driving repeat purchases.

• Be imaginative. Gamification and playful engagement turn routine interactions into opportunities for emotional connection and loyalty. Luxury Escapes’ “Roll the Dice” invites customers to explore random travel destinations, making the experience interactive and enjoyable.

• Proactive engagement enhances customer value. Mercedes-Benz’s AI suggests route adjustments or driving tips in real time, showing how predictive tools can exceed user expectations while creating brand differentiation.

Until recently, conversational AI really wasn’t much of a conversation. A business’s chatbot was mostly rule-based, focusing on specific tasks or providing entertainment, with minimal adaptability or learning capabilities compared to the AI-driven systems of today. A conversation really amounted to a simple Q&A about product availability or basic search.

But times have changed.

Especially in the post-ChatGPT era, brands can tap into increasingly sophisticated multi-channel conversational tools in an intuitive way. For instance, AI-powered search tools like Perplexity and Google’s AI Overviews are exploring ways for brands to share sponsored content in the user interface. Perplexity is testing a Sponsored Replies feature that allows businesses to integrate relevant, branded responses into user queries.

AI-powered chat matters very much – even more so.

Businesses are getting more creative about how to use conversational AI for everything from research to assisted shopping, and generative AI models like ChatGPT and Perplexity are opening the door for more imaginative ways for brands to enter the conversation through sponsored content.

Today’s landscape beyond chatbots

Modern conversational AI isn’t limited to website support widgets. It is present across channels and devices, opening up new avenues for engagement:

Personalized shopping experiences

Sephora’s chatbot goes beyond assisting with purchases. It creates an immersive, personalized shopping journey. By analyzing customer preferences, purchase history, and even skincare concerns, the bot tailors product recommendations that feel intuitive and relevant. This not only increases conversions but also strengthens the emotional connection between the brand and its customers. Instacart also employs AI to simplify meal planning and shopping by offering curated grocery lists and meal suggestions, enhancing both convenience and satisfaction.

Dynamic customer experiences

It’s well known that some hospitality brands have been using conversational AI to improve the guest experience. An example is Hilton’s AI-powered concierge, Connie, who is stationed at front desks to assist guests with various inquiries, such as providing recommendations for local attractions, answering questions about hotel services, and making reservations. Connie uses natural language processing to deliver human-like interactions and adapt responses based on guest preferences. In doing so, Connie reduces the workload of humans.

But how about AI assistants that take your feedback to provide better experiences?

That’s what some brands are doing. For example, Mercedes-Benz has integrated Google’s conversational AI into its MBUX Virtual Assistant, which enables dynamic interactions with drivers. This system can handle complex dialogues, provide real-time recommendations, and adapt to user preferences, which improves the driving experience and gathers user feedback for future vehicle features. This is where generative AI offers great promise by collecting user feedback in a more intuitive way, for categories ranging from health tech to automotive.

Omnichannel integration

Most of the discussion surrounding conversational AI focuses on customer-facing applications, but AI-powered assistants can improve the brand experience by integrating across touchpoints to improve operations. This is what Walmart’s “Ask Sam” does. In-store employees use the tool to locate products, check schedules, and access inventory details in real-time. This creates a ripple effect: employees work more efficiently, and customers enjoy more seamless and intuitive interactions.

Gamification and playful engagement

Luxury Escapes shows how conversational AI can turn customer interactions into engaging, gamified experiences. The brand’s chatbot features a “Roll the Dice” game that encourages users to explore random travel destinations. If a user interacts but does not immediately book, the system tracks their preferences and uses retargeting strategies, such as follow-up messages or personalized email offers, to re-engage them. Not only does this drive interaction but it also boosts sales by incorporating retargeting strategies into the experience. These playful engagements make customers more likely to associate the brand with positive emotions, building loyalty over time.

Social media real-time engagement

Conversational AI enables brands to respond to customer feedback and trends faster than ever. Snapchat’s “My AI” personal assistant helps users plan trips, find recipes, or brainstorm gift ideas — all in real time. This functionality enhances user experiences while providing valuable insights into customer needs and behaviors. Similarly, tools like Sprinklr AI+ allow brands to monitor and engage with social media audiences at scale, which ensures responses remain timely and on-brand.

Tips for brands to succeed

Success with conversational AI hinges on thoughtful implementation. Brands must prioritize authenticity, empathy, and value-driven interactions to make their conversational AI efforts resonate.

Be mindful

Research firm Gartner reports that consumers are increasingly unhappy with AI-powered chatbots that try to take on too much. Gartner suggests that too many businesses are adopting a brute force approach to conversational AI by designing chatbots to answer too many complicated questions about sensitive, deeply personal topics like finance and healthcare. Be mindful of what your customers really want from you, and carefully segment customer experiences that require the human touch from those where a chatbot is the right solution.

Adopt a natural tone

Conversations must feel intuitive, mirroring natural human dialogue. AI-driven tools should be trained to recognize nuances in language, tone, and context. This ensures the interaction feels organic rather than automated. By emulating a conversational style, brands can build rapport with users and make the experience enjoyable rather than transactional. Having humans in the loop to develop your conversational AI application will help you ensure that your style remains natural.

Avoid robotic messaging

Overly scripted interactions risk alienating users. Instead, focus on crafting responses that genuinely address the customer’s needs. For instance, a bot might provide helpful tips or answer questions with clarity, creating a sense of trust and reliability. Balancing promotional content with value-driven communication helps ensure users remain engaged.

Use data responsibly

Personalization relies heavily on customer data, but transparency is essential to maintaining trust. Brands should clearly explain how they use data to improve user experiences. Incorporating safeguards, such as anonymizing sensitive information and adhering to privacy regulations, reinforces trust and shows that the brand values its customers’ security.

Incorporate feedback loops

AI tools improve significantly when user feedback is factored into their development. Brands should regularly assess AI performance by analyzing user satisfaction and troubleshooting recurring issues. Adjusting conversational flows based on real-world interactions ensures that the AI remains relevant and effective, reducing frustration and enhancing user loyalty.

Engage across channels

Consumers expect consistency across platforms, whether they’re interacting via a website, social media, or in- store devices. Brands should ensure that conversational AI solutions work cohesively across all touchpoints. When brands maintain a unified voice and approach, they can provide seamless, integrated experiences that feel natural and professional.

Plan for proactive engagement

Waiting for customers to initiate interactions leaves untapped potential. AI can anticipate customer needs by analyzing behavior patterns and sending timely suggestions. Proactive AI might remind users about expiring loyalty points or suggest complementary products based on previous purchases, which encourages a sense of care and attentiveness.

Looking Ahead

But also in how brands embrace and apply it. As AI capabilities grow, the brands that succeed will be those that understand the human element. Consumers want more than faster responses or more efficient service. They crave connection, empathy, and value in every interaction.

This article originally appeared in WARC.