What’s a chatbot? It’s an automated piece of software that is able to converse with a human in order to find answers to questions and queries and respond to particular requests. Unsurprisingly, it is categorized under this all-inclusive term of Artificial Intelligence (AI), one of the most groundbreaking new technologies of the 21st Century. The whole premise of AI is that it reflects in machines the very human capability of making decisions based on the evidence at hand.
It’s impressive technology and has great possibilities in terms of customer support services, obviously. The idea of a chatbot is that it will mimic the behavior of a human customer service employee who would usually walk a potential customer through all possibilities.
“Although chatbots are not necessarily brand new technology, where advancements have been made is in the field of machine learning (another buzzword in tech circles) which means that the bot has the capacity to adapt to a specific customer’s needs, rather than just churn out a number of default replies,” reports Grange Morrison, a chatbot manager at Do My Assignment and Write My Paper.
Current state of chatbots in ecommerce
Chatbots are not the future of ecommerce, they are very much the here and now. 83% of online shoppers need assistance through the purchasing process, and that is just one of the ways chatbots can happily intervene.
According to Google Trends, search for chatbots has grown 19x, and according to HubSpot, up to 71% of customers favor using this intervention to tackle the issue they have at hand. And according to customer reach, 64% of customers list the 24/7 nature of chatbots as the number one benefit, while 55% list the ability to get an instant response, with the same number again waxing lyrical about the ability to get simple answers to simple questions. And the good news is that the vast majority of customers are positive about their chatbot experience, with only 11% responding negatively.
And one final stat, the worldwide chatbot market is expected to reach over $1.2 billion, representing a growth rate of 24.3% by the year 2025. If you are not yet convinced by the use of chatbots, the stats only say one thing.
Without getting too technical about it, these chatbots are able to exploit what is called natural language processing (NLP) in order to interpret the human request and then respond in kind. It is this kind of field chatbot which is really revolutionizing the ecommerce industry.
Proactive and reactive methods
So how do you want to employ your chatbots? Do you want to be solely reactive (using them for customer service queries), or do you want to engage them as a proactive source of lead generation and customer conversion, these are the question you need to ask yourself, and it all boils down to the differing ways in which chatbots can add value to your ecommerce business.
How do chatbots add value to ecommerce websites?
The most obvious way in which chatbots add value to a business is through the use of customer service chatbots which streamline the customer services process within your business. But chatbots can also help you acquire customers too.
How so? Because of the way social media can be exploited. According to recent statistics, online shoppers favor social networks for making purchases to the tune of 30%, with Facebook the leader in this particular activity.
Interestingly, and not coincidentally, Facebook Messenger employs more than 100,000 chatbots which run all manner of activities: product recommendations, the processing of orders, the collection of important customer data, and so on (Think of the cost savings in terms of staff overheads here too!) So why not consider integration possibilities here to allow you to connect with potential customers and automate all these tasks too. Instead of going through your website, customers could engage directly with your Facebook page where chatbots make the necessary recommendations and process the orders as they come. This is an incredible addition to your sales funnel.
Let’s look at a couple of use cases.
LEGO, the incredibly popular toymaker, employs a bot that helps customers choose the right gift. It is able to make specialized gift recommendations by asking direct questions through Messenger. Depending on the answers that the customer provides, Ralph the Gift Bot provides options and can even link the option directly to the customer’s cart once that have decided they want to proceed. Using Facebook’s Messenger Ads to bring customers on board, LEGO has seen a 6x return in the UK, US, France, Germany, and Poland. Cost-per-conversion has also been reduced by 31%.
Bot Burger was a research experiment conducted through the premise of selling burgers in Paris on Friday and Saturday nights. The idea was to develop a chatbot rather than an app, and customers were able to order specifically through Facebook Messenger rather than anywhere else. The developers created an associated Facebook Page with a really engaged audience and this turned out to be a great way for Bot Burger to acquire new customers. The conversion itself could be begun through Facebook, be it Ad, post or Messenger, and you could even share with friends by using an option provided by the bot. As a further development, users could simply tap using NLP, and could even reorder to the same address with a single tap.
The results were phenomenal. 20% of customers repeated an order with a two-week window, and the company unsurprisingly experienced huge growth in sales (7x) in just four months.
Benefits for companies
Let’s start with a really obvious benefit, which is cost reductions. According to BIU Intelligence, customer service costs ban to be brought down by as much as 29% by employing these intelligent chatbots, mostly through a reduction in staffing overheads. As a business, you may still need to employ some human customer service employees, but these specialists are only there when a chatbot needs to direct a customer for specific purposes that the chatbot itself can ascertain. You are keeping humans only in positions where they truly add value.
“A huge benefit of chatbots is that they increase your conversions, which is really what it’s all about. Cleverly employed chatbots can help push users viewing your website or app down the sales funnel with a clever use of questions and recommendations – think about those chatbots which open up immediately upon landing upon a site, for example,” says Katie Addison, a business writer at Boom Essays and OXEssays.
Many e-commerce sites are now employing chatbots which can help upsell and cross-sell based on past purchases too (with clever exploitation of cookies and data). Statistics reveal that organizations that employ chatbots to engage with their customers, or potential customers, actually achieve increases in the average order amount per customer in terms of value to the business. The insurance company OHRA is a classic example. The company was able to ramp up its conversion rate from 35% to 100% in just a week.
Chatbots can also help in solving that age-old problem: shopping cart abandonment. This is obvious because a chatbot is there to assist through the steps that typically lose customers (for example, a 23% drop off when asked to sign up for a user account first). It’s about streamlining processes and making fewer steps easier for the customer to be complete. For example, eBay employs chatbots that act as a type of personal shopper, guiding customers easily down the guest check out aisle.
The collection of customer data is another way in which chatbots add value, with even the way customers interact with those chatbots proving invaluable.
Benefits for customers
Quite simply, these new modern chatbots improve levels of customer satisfaction (which is of course great news for your business too). Not only are they available 24/7, but there’s also no need to pick up the phone or dive into FAQ sections. Another benefit here is that it eliminates the potential for human intervention to go wrong – even the best customer service agents can have an off day. There is much more consistency in the customer service level customers are receiving. And then there is the efficiency in response that these next generation of chatbots are able to bring which won’t fail to impress.
But so far we have only focused on the befits to customers from a customer service perspective. What about when the bots are helping ease the customer down the sales funnel? Quite simply chatbots here smooth the journey for customers (and as we have seen for companies, shopping cart abandonment rates drop off accordingly). When it comes to the purchasing process, an intelligently employed chatbot can be seen on any product page and can offer additional information where required, answer any queries the customer has about the product, and even be there to provide discount codes or inform the customer immediately if there are any special offers that apply. In short, the customer doesn’t have to work hard seeking the information, because it is all proved right then and there.
- 4 Big Ecommerce Trends of 2018 – and How to Implement Them
- 10 Must-Have Digital Marketing Tools
- 5 Ecommerce Trends to Look Out for in 2020
- Building Successful eCommerce Strategies for Your Business
- Top 10 Ecommerce Mistakes