Chatbots catching up in retail

Chabots are the latest fancy in retail trade. And those companies which have already implemented this technology into their marketing system say that it has helped take consumer experience and satisfaction to a higher level. There are exceptions though. A recent social media post of a veteran retail entrepreneur incubating his hyper-local business is an indicator. His post was a furious tirade against the e-commerce behemoth Amazon. His complaint was that the bot-enabled customer service was simply not any good.

The reason: his chat with the bot did not elicit the right response and moreover, the chatbot thanked him for sharing feedback instead of assuring delivery or resolution. Given that such negative experiences are rising too, can chatbot be dismissed as a mere gimmick or an extra hyped technology? Industry experts say that is not the case. According to them, it’s a useful technology to understand consumer preferences, expectations and deliver results with careful execution. Some of the areas where chatbots can dramatically improve consumer experience are given below.

Product Recommendation
Chatbots are one way to build a connection online for retailers, helping customers find the products they love. Levi’s in the US, for example, has launched a tool called ‘Virtual Stylist’ that helps shoppers find great-fitting jeans. It asks questions about fit preference – for example, how would you like your jeans to fit through your hips and thighs? And then it delivers tailored recommendations for particular cuts and styles.

Customer Behaviour
India’s largest e-tailer, Flipkart, is using artificial intelligence (AI) to track customer behaviour that has helped the company to reduce several pain points. This has been achieved through a machine learning model for each customer, which provides insights such as whether the shopper is a male or female, his or her brand affinity, store affinity, price preference, frequency, volume of purchases, etc. This data gets stronger with time as the machine learns more and more about the customer. It has resulted in its net promoter score (NPS) growing 14% in June over the last 12 months, while customer pain has reduced 25% in the last six months and customer query resolution has gone up 14% since the launch of chatbots in April, the company says.

“Retail companies across segments, be it fashion and lifestyle, health and fitness, food and beverage, among others, are increasingly adopting chatbots – boosting conversational commerce. These automated bots can work like an assistant shopper or shopping guide, simulating real-life conversation through artificial intelligence. In the retail sector, enhancing or creating unique customer experience is of utmost importance, not only because it is real-time, available 24x7 but also because it keeps customers digitally engaged. This where chatbots help expedite consistent quality customer service at optimized operational expenditure,” opines Sunil Munshi, CEO, Denave India.

In this digital era, determining pricing buckets and product offerings is an eternal task for retailers. This is where chatbots play a vital role in providing insights into consumers’ changing demands, trends and expectations, which then forms the premise of pricing strategy. As per Munshi, on the retail business front, AI-enabled chatbots induce a collaborative environment with ease of information sharing across teams and various business units. This collaboration is pivotal in fostering customer loyalty and helps in customer retention. “Overall, it leads to scaling up and quickens the pace of return on investment,” he adds.

“Voylla started experimenting with chatbots to facilitate communication with customers two months ago. E-commerce sites need quite a few touch points with customers and to build scalable platforms chatbots have become a basic need. We are implementing bots to help customers with logistic tracking of order, finding a product, finding a collection, additionally to gather feedback,” states Jagrati Shringi, CTO and CMO at Voylla.com. However, in India, Da Milano as a brand believes in personalisation rather than chatbots.

“While chatbots today are built to personalise a conversation to a certain extent, we still believe that it is yet to replace human interaction. And hence we always personally interact with our customers and have a dedicated team to do the same. However, we do use chatbots in other departments like human resources, etc.,” says Shivani Malik, Marketing Director, Da Milano. As per e-commerce company Shopclues, it has started using the technology in a very nimble way and hence the impact and scalability is yet to be monitored.

Communication Channel
With chatbots, instead of asking for your customer’s email you can ask them to start a chat with you on Facebook Messenger. When they click on it, they are taken directly to your chatbot. Now you can send them an update every week with your newest product offering, or any other information that is relevant to them. Chatting is definitely less formal than email, and cozier. Your customers will want to chat and interact with you more. And you can track the progress of all the conversations at the backend. It also automates your content marketing, improves return on investment per content piece and increases customer loyalty.

Marketing Tool
Chatbots can be used as a marketing tool by keeping a database of the clients’ experiences and preferences. Experts say that if e-commerce businesses don’t utilise chatbots to refine and upgrade customer journeys, the clients will move elsewhere. However, artificial intelligence still requires additional development to be able to create the same interaction that people provide. As the technology progresses further, brands may build robots with actual answer decision trees that are in perfect alignment with the company’s products and services. “It is important to understand that chatbots allow capturing data in advance to create a more personalised experience for clients,” says an industry expert.

For example, California-based eBay first started using chatbot technology by piloting a simple Facebook Messenger tool that reminds bidders 15 minutes before an auction listing is about to end. That way, they can remember to get a last-minute bid in. Now they have expanded this service to include shopbot, a virtual personal shopping assistant that helps people find items they want at the price they want on eBay. All you have to do is type in basic details about what you are looking for and eBay will then ask you all the relevant questions to find the perfect fit, style, and colour for you. Since its launch, shopbot users are nearly three times more likely to ask questions about specific products than those browsing eBay’s inventory. Thus, the strategy for retail companies is clear – they will need to continue investing in AI, bots and automation to be relevant to their customers over the next decade.