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How retailers can benefit from chatbots

Updated: September 20, 2023
How retailers can benefit from chatbots
How retailers can benefit from chatbots

Conversational AI chatbots are the most sought after technology by e-commerce retailers as they improve customer engagement as well as customer support, along with an increase in RoI by many folds compared to existing technology.

What makes the conversational ai chatbots the first preference by e-commerce retailers?

E-commerce is poised to grow up to 5% by 2021, accounting for nearly 20% of the world’s retail sales soon. AI-enabled technology has been the biggest facilitator for this sharp rise, accelerating the adoption of digital-first shopping experiences. E-commerce technology, in particular, has taken the retail industry by storm, enabling 24/7, one-on-one, personalized interactions between brands and prospects/customers, on a massive scale.

A recent National Retail Federation Survey conducted among 3172 participants shed light on the 3 topmost reasons influencing shoppers’ decision on where to shop:

  • Quick and easy product discovery – 58%
  • Top-notch customer service – 44%
  • Simple, fast checkout – 42%

AI-powered chatbots can supercharge all these experiences. Chatbots are software programs that can intelligently converse with your leads or customers directly with very little human intervention. We can integrate chatbots on e-commerce websites, WhatsApp businesses, Facebook Messenger, or even Google business pages. Chatbots can be customizable in the sense that you can decide the top-level objectives you want to deploy them for below service but are not limited to them:

  • Customer Support
  • Employee Onboarding
  • Product Discovery
  • Lead Generation & Lead Nurturing
  • Up-Selling and Cross-Selling
  • Customer Support
  • Answer FAQs

With the help of chatbot orchestration, one chatbot can be deployed for multiple functions, while at the front end only one chatbot- a universal bot interacts with the user. By the end of 2020, conversational chatbots will handle nearly 90% of customer interactions, bypassing human agents fully or partially, as per Chatbots Life. Millennials are leading the charge in making chatbots mainstream, being much more tech-savvy, and being open to trying new things.

The tremendous flexibility and ease of setup afforded by chatbots make them ideal for small retailers, strapped for resources. They can save big on payroll expenses (marketing, sales, customer success), thus bolstering their return on investment in the long term. 

Let us now take a deep dive into understanding how retailers can benefit by embracing chatbots:

Product Discovery 

It’s frustrating to go to a store to search for that specific product you want, but it proves futile. Chatbots to the rescue! They can don the role of intelligent personal assistants, noting your specific requirements and help narrow down the search. Customers rarely know exactly what they’re looking for and seek recommendations. In such cases, the smart AI recommendation engine in chatbots can provide suggestions based on colour, type, brand, price, ratings, and more. Based on the customer inputs, the chatbot can save customer preferences and user history of the conversation to provide a smoother, personalized experience next time, not just online but at the physical storefront as well. A DigitasLBi report claims that nearly 1 in 4 consumers want chatbot product recommendations available at the retail outlet.    

24/7 Customer Support

If your customers are scattered all over the globe, using a retail chatbot is an easy decision because maintaining high-quality, round-the-clock human agent shifts is inefficient and hurts your bottom line. Retail chatbots are at your service 24/7, never resting, never sleeping, answering every customer query in real-time, to the best of their knowledge. Chatting with bots is a breeze and eliminates the annoying waiting times associated with human support (“Your call is important to us. Please wait, one of our representatives will get in touch shortly”). 

You can also design chatbots to provide localized help, as an Indian customer’s needs might differ from those of her Spanish or Dutch counterpart. Typically, chatbots can handle generic inquiries very well, but if the conversation becomes too complex, or the customer prefers speaking to a human, the bot can always hand off the ticket to a human agent for swifter resolution. 

Boost Sales

Chatbots can drive up customer engagement, turning visitors into leads, and leads into customers. Drive customers right from the ad to the chatbot on Messenger or WhatsApp or simply give an engaging platform right on the ad to users with banner ads. Chatbot reminders are also great for arresting cart abandonment rate, as they have around 80% open rates, over 3 times better than email. They also trigger 10x greater click-throughs and are a clever way to hack your conversion funnel, generating up to 7 times more revenue that would have been otherwise lost through cart abandonment. Another way chatbots can catalyze sales is through timely exclusive deals with notifications. Wouldn’t you be amazed if an exclusive discount or a ‘buy one get one deal popped up on the website out of nowhere? You can run special one time, limited period offers for visitors casually browsing through your products page. Such campaigns can incentivize customers to keep coming back and create staunch brand evangelists.

Gathering Customer Feedback 

Last but not the least, chatbots are an absorbing way to talk to your customers. You can get a lot of product insight on things that are working well, things that can be improved, things that need to be prioritized, etc. Communicating with your target audience is the best way to chalk out your product roadmap. Chatbots can help you conduct Net Promoter Score surveys, create feature request polls, post-communication questionnaires to test the quality of the conversation, and more. And, since it’s in a chat format, it’s much more enjoyable and effective compared to the boring form. The conversation data can also come in handy to iterate and improve on conversational AI algorithms and make it even more humane.

Launch Smart Promotions

With the customer data collected from the interactions and surveys by the chatbot, send personalized promotions for the customers. Launching the right promotion at the right time is necessary for converting leads. By sending automated promotions and other helpful tips and updates, a business can make itself present in the customer’s mind.

Endless Aisle

Endless aisle is the ability to display, access, and sell inventory enterprise-wide, allowing retailers to meet in-store shoppers’ wants by ‘stocking’ stores with a never-ending supply of SKUs. Mobile-equipped associates, kiosks, and smart screens are fast becoming essential for stores of all sizes that want to compete with online disruptors.

There’s no denying that chatbots are ushering in a new paradigm in the retail industry by popularizing conversational commerce. Not only do they save businesses time and money but also showcase that the brand cares about providing exceptional customer service. Chatbots simplify the whole buying process for the user by providing a familiar instant messaging platform to browse, buy, and more. 74% of people are likely to switch brands if they find the purchasing process too difficult.

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