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9 months ago. Reading time: 3 minutes
What exactly are Chatbots?
Chatbots are interactive applications designed to automate simple communication tasks. Some companies feel that Chatbot are not yet sophisticated enough to deal with the complicated nature of their eCommerce business. On the other hand, many more are beginning to see the potential in this rising technology.
They were a big talking point at this year Internet Retail Expo, in fact, Stuart McMillian, deputy head of eCommerce at Schuh, suggested they’ll become common currency in the next 2 years. It’s not just western retailers embracing them, as Anthony the Chatbot saw great success as one of the centrepieces at this years Asia Expo in Hong Kong.
Although this form of AI is far from ready to take over eCommerce it is beginning appear more, so in this post we’ll look at some of the companies who have begun experimenting with them. From marketing and brand boosting to customer care and driving sales, how can retailers use Chatbots successfully?
Directly making money from chatbots is difficult, with some exceptions such as Uber on Facebook messenger, currently their most recognised function is driving interest through brand engagement. However, savvy marketers are beginning to see the potential, which in turn can lead to conversions, especially when the bots are used creatively.
For example, US makeup brand Sephora’s new Chatbot provides customers with health and beauty tips that eventually guide them towards products. Their marketing approach avoids aggressive selling techniques by starting with content then moving towards commerce.
Adidas found that an exclusive offer available only through their bot messenger was a unique way to drive more interest. They started offering free fitness classes to women in London who would join the messenger service. The Chatbot would then contact them exclusively with dates and times. Their ultimate goal was to boost brand awareness and it certainly worked. Within the first week 2,000 people signed-up and their first week retention was 60%, higher than any app they’ve started.
A frustrating interaction for a consumer is receiving a robot on the phone when you’re expecting a person, it can even turn some away. However, with more shopping done online than ever before, Chatbots that interact via messaging could revolutionise the customer service sector for eCommerce.
One reason is the speed with which they can respond to a customer query. mGage found that some Chatbots can instantly answer up to 90% of the questions they’re asked accurately. They’ll have the ability to provide this support 24/7, making it easier for users to receive help after regular working hours. This round-the-clock support is unlikely for most businesses using humans due to the cost, so another benefit of Chatbots is the money they’d save retailers, up to 30% in customer service. They can even be used to reply to a complaint or issue, at any hour, for instant reassurance to customers.
This is one of the main reason nearly $4 billion has been invested in Chatbots already. They provide a cheap, instant and convenient customer service experience.
With the majority of web surfing now done on mobile, retailers are focusing their marketing effort to those on the move. Messenger bots could be a great way to engage with customers, send things like push notification and deals based on location straight to their mobile.
Burger King have begun testing a Chatbot in the US that allows customers to place an order, choose a restaurant and collect from that location. They’re even able to contact the user when they’re not directly using the messenger bot. Sending them messages with deals, targeting them around the time of day they’d usually order, even provide location based offers. This is a great example of Chatbots being used to re engage customers and not only that, encourage sales.
Similarly, the flower service 1-800 Flowers is another Chatbot that’s been well received during it’s US trial. Again, allowing customers to order through its facebook messenger bot. They’ve said the new bot has helped “enhance the customer experience” by sending notifications around birthdays for added convenience.
Chatbots could even message customer during or after an interaction with a the service to get feedback on a particular aspects of the site, gain some insight into how they found the user experience. The engagement possibilities are endless.
With a bit of bit of creativity, Chatbots can even provide customers with a way of reducing steps to their shopping basket. For example, H&M’s new messenger bot attempts to offer a personalised shopping experience that leads to the checkout. Customers enter a conversation with the bot who will pick-up on certain keywords, like colours and garment types, to help guide them to their products. It will recommend clothing, suggest whole outfits and link them to the product page; reducing steps and creating new sales opportunities.
Source: Guided Selling
A highly sophisticated version of this is Amazon Echo, which has proven successful at reducing these steps. Matt Johnson, Vice President of GoKart Labs, suggests investment into this technology by retailers is the key, the more advance the more it can push a sale. He finds using programs like Echo have helped him shop more freely. Verbally adding things to a virtual shopping basket is easy, in fact, he finds himself ordering things he may not do otherwise. This is just one example of how they’re helping reduce friction.
Although their rise in popularity is slow, AI is undeniably seeping into every part of eCommerce and chatbots are up there. There is still a way to go, their interactions aren’t flawless but their potential is huge.
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