The retail industry’s long-standing reliance on one-way customer notifications is giving way to AI-powered conversational engagement, according to new insights from cloud communications platform Infobip and research firm Retail Economics. As consumer expectations for personalized digital experiences continue to rise, retailers are increasingly being pushed toward conversational AI platforms that enable two-way interactions across messaging channels such as WhatsApp, rather than relying solely on traditional email campaigns and SMS alerts.
Artificial intelligence is reshaping how retailers communicate with customers, moving the industry beyond mass notifications toward continuous, context-aware conversations.
New findings from Infobip, an AI-first cloud communications platform, and Retail Economics suggest that the era of “broadcast” retail engagement—defined by one-way promotional emails, delivery notifications, and marketing messages—is rapidly being replaced by conversational AI experiences that help brands build longer-term customer relationships.
The research reflects a broader shift across enterprise retail, where digital engagement is becoming a competitive differentiator rather than simply another customer service channel. As consumers increasingly compare shopping experiences across digital-first brands, retailers face growing pressure to modernize communication strategies that have traditionally relied on email and static notifications.
Richard Lim, CEO of Retail Economics, argues that customer communication has become significantly more fragmented, making personalization increasingly important.
According to Lim, consumers no longer respond to standardized messaging. Preferences vary across generations, income groups, and shopping behavior, creating a more complex engagement landscape for retailers.
The research highlights these changing preferences. While Baby Boomers continue to favor email communications, younger consumers are adopting messaging platforms for customer service interactions. Around 24% of Generation Z shoppers now prefer WhatsApp and SMS when managing deliveries or returns, reflecting broader changes in digital communication habits.
WhatsApp emerges as a notable exception to the fragmentation trend. Unlike many digital channels that appeal to specific demographics, the platform maintains relatively consistent engagement across age groups, making it an increasingly attractive channel for enterprise retailers seeking broader customer reach.
The findings also point to measurable differences in customer engagement. Infobip reports WhatsApp open rates ranging between 85% and 95%, substantially higher than the average e-commerce email open rate of approximately 32.7%. Rather than serving as another promotional channel, conversational messaging allows brands to guide customers through product discovery, purchasing decisions, order tracking, and post-sale support within a single persistent conversation.
For enterprise AI teams, this represents more than a messaging upgrade. It reflects the growing adoption of conversational AI as part of broader customer experience infrastructure, where automation, personalization, and real-time interactions increasingly converge.
Kim Johal, Retail Specialist at Infobip, believes one of the biggest barriers to adoption remains the perception that conversational customer support requires large operational teams.
Instead, advances in AI-powered automation are allowing retailers to build intelligent workflows capable of resolving routine customer requests—including order tracking, delivery updates, and return inquiries—without requiring human intervention. Complex cases can then be escalated to customer service representatives when necessary, enabling organizations to scale customer engagement without proportionally increasing staffing costs.
This approach mirrors a wider enterprise AI trend in which organizations deploy large language models (LLMs), AI agents, and workflow automation to augment customer service operations rather than replace human employees entirely. Technology providers including Microsoft, Google, Amazon Web Services, Salesforce, and NVIDIA have all expanded investments in enterprise AI platforms that support conversational experiences, reflecting growing demand across industries.
Despite increasing interest, enterprise adoption remains at an early stage.
Industry polling referenced by Infobip indicates that 88% of retailers have begun exploring conversational AI initiatives. However, none of the surveyed organizations reported achieving full integration across the complete customer journey—from product discovery and purchasing through post-sale support.
The findings illustrate a common enterprise AI challenge: experimentation has accelerated, but end-to-end operational deployment continues to lag behind pilot programs.
This readiness gap presents both opportunities and competitive risks. Retailers that successfully integrate AI-driven messaging into commerce platforms, CRM systems, and customer support workflows may gain operational efficiencies while improving customer satisfaction. Those maintaining fragmented communication strategies risk falling behind as digital expectations continue to evolve.
Market analysts increasingly view conversational AI as one of the next major enterprise software categories. According to McKinsey & Company, generative AI could contribute between $2.6 trillion and $4.4 trillion annually across industries, with customer operations representing one of the largest value opportunities. Meanwhile, Gartner projects that conversational AI and virtual assistants will continue expanding across customer engagement platforms as organizations prioritize automation and personalized experiences.
As enterprise retailers continue investing in AI infrastructure, conversational commerce is evolving from an experimental capability into a core component of digital transformation strategies. The organizations that treat messaging platforms as relationship-building channels rather than simple notification tools are likely to be better positioned to meet rising consumer expectations in an increasingly AI-driven retail environment.
Market Landscape
The retail sector is entering a new phase of AI adoption where conversational commerce is becoming central to customer engagement strategies. Rather than relying solely on email marketing or mobile notifications, retailers are integrating AI agents, messaging platforms, CRM systems, and cloud communications into unified customer experiences. This evolution aligns with broader enterprise AI investments across cloud platforms from Microsoft, Google Cloud, Amazon Web Services, Salesforce, and NVIDIA, all of which are expanding AI capabilities for customer service automation. As generative AI matures, conversational commerce is expected to become a foundational layer of enterprise retail technology.
Top Insights
- AI-powered conversational commerce is replacing traditional one-way retail messaging, enabling retailers to deliver personalized customer interactions across platforms such as WhatsApp while improving engagement and operational efficiency.
- Infobip’s research indicates WhatsApp achieves significantly higher customer engagement than email, highlighting changing communication preferences and the growing importance of conversational customer journeys.
- Although 88% of retailers have started exploring conversational AI, none report fully integrated deployments, underscoring a substantial enterprise implementation gap across the retail sector.
- AI automation enables retailers to resolve routine customer inquiries continuously while escalating complex requests to human agents, supporting scalable customer experience strategies and lower operational costs.
- The shift toward conversational AI aligns with broader enterprise investments in generative AI, cloud communications, AI agents, and intelligent customer engagement platforms.
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