Over recent years, the eCommerce industry has shown a decent amount of growth compared to the rest of the industries. Thanks to modern technologies from product visualization to augmented reality, which has helped retail industrial to survive in this competitive world.
Users’ behavior in recent times has completely evolved when it comes to online shopping. They are now looking towards decent customer support from any eCommerce store. Most of the eCommerce store owners invest heavily in hiring developers to design a perfect website for their online store. But at last, they forgot to integrate the most fundamental feature in their website, which can provide the best support to their users’. And, because of the same loophole, they lose potential buyers.
It’s quite evident that any buyer can have some questions or queries while reviewing a product on your online store. Buyers’ can visit your store any time during a day or even at night. But does that mean that:
“Do you need to hire a dedicated 24/7 customer support team?”
Answer to the above question is NO. Here’s where the power of AI Chatbots comes into play in the eCommerce industry. Instead of hiring customer care support staff for 24/7, you can integrate AI Chatbot for an online eCommerce store.
A recent report from the Statista has discovered that Global chatbot market will rise to 1.25 billion U.S. dollars in 2025.
Above statistics certainly, indicate at the growing requirement for retailers to depend on eCommerce AI chatbots as a piece of their customer support methodology. So let’s dig a bit deeper & understand the concept of AI Chatbots, benefits it drives for the eCommerce industry, and many more.
What are AI-powered Chatbots?
If you’re not aware of AI-powered Chatbots, the concept is quite simple. Chatbots are automated bots which interacts with the users’ via a chat interface & provides perfect support to its users’ just like any user is interacting with a real customer support agent. ‘AI-powered Chatbot’ simulates interaction with a user while curating an intelligent conversational interface. These are designed to make users interactions with machines more advanced and intelligent via AI and Natural Language Processing.
Artificial Intelligence is a technological boon to the digital world. In mere words, we can say that the machine can understand and learn things just like our human brain does. Its powerful combination with ML (Machine Learning) has paved the way for Chatbots or Personal Assistants.
The prowess of AI Chatbots in eCommerce Industry
“40% of millennials say that they chat with chatbots daily” – Acquire.io – 2018
“67% of businesses believe that chatbots will outrun mobile apps within the next 5 years” – Medium.com
Well, after looking at the above statistics and few more statistics over the web, I feel that Chatbots are going to play a huge role in the eCommerce industry. AI Chatbots for eCommerce industry is quite engaging and user-friendly. As customers are becoming more demanding, so the focus of this technology is on understanding, analyzing, and facilitating users without any kind of human interaction.
Let’s have a quick look at few of eCommerce brands which have used AI chatbot to perfection to outreach their potential audience, provide decent customer service, generating sales, and more.
Sephora Chatbot on Kik Messenger
If you’re very addictive to social messenger, you must have heard about Kik Messenger. It is one of the most popular messengers in the United States, among the young generation both males & females. On the other hand, you must have also heard about Sephora – Virtual Make up artist.
On seeing the rise of Kik messenger, Sephora quickly adopted to develop a chatbot for its users, which helps them to understand & learn about makeup! Under their unique AI-powered chatbot they have covered up tips, video tutorials and image tutorials for all things makeup- eyes, lips, face, hair, even nails!
When you will find Sephora bot under discover bot option in Kik. On the first prompt, when you’ll click on start chatting button, it will take you to play a quick quiz and then, later on, you can search for tips, videos or images or even search for a product.
Sephora’s chatbots are just not helping buyers’ finding the best deals, & making purchases but also helping them with fashion choices and accordingly finding products that meet their unique style & flavors. That’s something which you’ll not find a simple eCommerce website offering you at the moment.
Another example of an eCommerce which is utilizing Chatbot with great perfection is H&M – Clothing retail company. H&M Chatbot is built on the same principle & logic which the Sephora – Virtual Makeup artist integrated.
On the very first prompt, it will ask you which type of clothing you want to see, i.e. Men’s Clothing or Women’s clothing. Then moving on next, it will ask you a few questions like which describe you the best? Are you a teenager, a college student, 20s, 30s, or others? After describing yourself, it will ask for your style statement.
Once a style profile is created, you can use the bot to effectiveness to create outfits of your own; to vote and browse outfits created by other users and buy.
What I like most about H&M Chatbot is the option of voting on the outfits created by the other users. Voting can certainly influence your shopping decisions to a certain extent. It is one of the best possible opportunities to drive sales. The brands which are relying only on designing attractive layout of their eCommerce alone is missing this wonderful opportunity of driving more sales.
In & around there are few more examples of eCommerce stores likewise Burberry, 1-800-Flowers which have successfully integrated their chatbot on Facebook messenger. Remember both brands are very old but they are keeping a close watch on the future by adopting new technologies to reach their potential audiences.
Benefits that AI Chatbots Drives to the eCommerce Industry
Although AI-powered chatbots are pretty much in their beginning stages, they present a huge scope for e-commerce retailers. Let’s have a brief look benefits that chatbots can drive to your online eCommerce store.
AI-powered Chatbots improves the overall efficiency rate
One of the most significant advantages of integrating chatbots to your customer service strategy is that they improve your overall team’s efficiency rate. For any eCommerce company, their topmost priority is to provide fast & helpful service to their users’. Only that person will understand who has worked as a customer care executive, how it can be frustrating sometimes to spend time in replying to the same answer over and over for the same question on a particular day. This will ultimately lead to a decrease in the efficiency rate. Here’s where AI-powered chatbots can play a handy & crucial role.
The properly built chatbot can act as a customer care support tool. When buyers’ ask for some basic questions (likewise what’s the shipping rate for their country or when will a particular product will be back in stock), the AI-powered chatbot can provide the straightforward answer they’re looking for immediately. This way, your team can focus their time and effort on more complex issues that a bot can’t solve — which is ultimately a much more efficient use of their time.
A major eCommerce leader who has deployed AI-powered Chatbots to resolve basic buyers query is Amazon. From its Alexa (a voice assistant) to other customer support services, Amazon has leveraged the power of AI with success. A live example of AI-powered Messaging Assistant of Amazon is as shown below:-
Here, we can see how Chatbot is using its database to understand the users’ intent to provide the most accurate responses. By doing so, Amazon has let their actual customer care support team focus more on the complex issues that a chatbot can’t solve — which is no doubt increased efficiency rate of their team.
Act as an Intelligent Sales Associates
Digital selling is similar to offline shopping in most ways. Just like we hire a salesman for our physical storefronts to educate customers about their purchase. Similarly, we can build digital sales associates for our eCommerce brands with AI-powered Chatbots.
Earlier in this article, we came across two live examples of Sephora and H&M Chatbots on Kik Messenger suggesting products that perfectly complements with customers’ choice. These are the pure examples of AI-powered Chatbots working as our intelligent Sales Associates.
This way, we can easily cut down on users time sorting and scrolling through multiple product pages to find a suitable one. Instead, users can conveniently navigate directly to the products that fit in well. Also, they can make a purchase as well; if they like suggestions of Chatbots.
Automated Communication with AI-Powered Chatbots
The majority of communication regarding order confirmation, shipping, or delivery information, and another kind of follow-ups are done in eCommerce. And, today’s smart retailers look for different solutions to automate the same process.
For instance, an automated email regarding all these activities along with marketing campaigns, etc. will bolster the whole process effectively. Considering AI-powered Chatbots, automation is the key benefit associated with it.
While these emails are informative, shoppers tend to delete them after going through them. Or, they are marked as spam sometimes. But AI-powered Chatbots allow you to make your communication approach stronger by changing the mode of reaching out. Live Chat interface is helpful instead of automated emails.
Future Opportunities & Challenges
Having gone through how AI-powered chatbots are bringing revolution in the users’ digital journey and easing out the merchant’s hassles while delivering a great UX/UI. It is important to look further into future opportunities and arousing challenges with AI Chatbots.
Starting with the opportunities lying ahead, below are some facts to digest:-
– Consumers don’t care whether they are talking to a bot or human they just need instant help. So, you can incorporate AI chatbots without any hesitation.
– Reducing dependency on human agents. As Chatbots are capable of understanding the human intent and to respond accordingly, so you don’t need a human agent available 24X7.
– Speed up response times and cut down on customer service costs. With a human-like brain, AI chatbots can answer the queries in a fraction of seconds without charging you a single penny for service.
To realize these benefits, you need to understand some of the challenges that come along with this invention; so that you can measure the results in the right context.
1. Vulnerable to Hackers
Digital hacking is a well-known concern of online vendors. Data privacy and sensitivity are imperative for users to trust you before detail sharing.
Therefore, while chatbots are interacting with humans and asking or collecting their information, it is of utmost importance that it is securely transmitted over the internet. It should always be a part of your business DNA to shuffle user’s information moderately.
You need to assure that no hacker gets access to your Chatbot UI, i.e. Chat interface; as it can lead to security breaches at both ends (merchant as well as the user).
2. Fast and Accurate
One key concern with AI Chatbot is to make it fast and accurate while answering customer’s queries. A vague and unrealistic response can compel your user to move away and possibly never to return.
Whenever you are building Chatbot, you need to make it intelligent and effective as per the user’s intent. No matter how superior your website may be; but if you fail in accuracy and speed, you will fail to capture the user’s interest.
3. Understanding User’s Intent
An interaction between a machine and a human can be awful if not supported well. Especially, when you choose Voice Bots for your brand; as they can go extremely wrong in speech commands. It happens due to the lack of sensitivity towards a user’s mood and emotions.
Therefore, a Chatbot needs to be well-trained by a real human so that the right intelligence is built. On that note, Google’s Dialogflow is an interactive SaaS tool that offers you a platform to build custom chatbots that are more reliable in understanding what users are saying.
With this tool, you don’t need to write NLP logic manually. Moreover, you can easily explore different ways to build voice and text-based AI Chatbots that are scalable too.
Leveraging technological advancements are great. But you can not allow it to ruin your brand presence in the market. All you need to do is to be ready for different challenges.
To Wrap Up
Gone are the days when talking to a Chatbot appeared foreign or alien or impersonal. Today’s users enjoy conversing with them as they save a lot of time. Also, they do the spoon-feeding for them while struggling with complex online processes.
AI-powered Chatbots are quite intelligent and specific in remembering user’s preferences and are 24X7 available for them. As long as companies are looking for different ways of assisting end-users with innovation and smooth UX, this technology is surprisingly beneficial.
The more you train this technology, the more you can raise customer service standards as well as revenues. And, no matter if you are already using a Chatbot or are about to build one for your digital retail business. Always looking for its market size, opportunities, and challenges lying in the market will be helpful in your business aspirations.
Kunal Khullar is a Co-Founder at The Brihaspati Infotech Pvt. Ltd, a leading IT consulting & service provider. He holds 10+ years of experience with providing software services, development and team management with diverse offshore software consulting firms all across the globe. He is passionate about technology and believes in serving today’s diversified business world with his knowledge and expertise.