In the simplest terms, a chatbot is an automated tool that processes human language and gives an appropriate response. Chatbots are used in various business operations, including marketing, customer support, and sales. Apart from this, chatbots find applications in different industries, including booking flights, ordering food, monitoring the weather, and even healthcare.
Current trends show the rise of eCommerce chatbot in customer support-related services. Using messaging apps for shopping has become quite popular among businesses and customers. There is a term that describes this: conversational commerce. It is a field that involves customers shopping through messaging apps. Through various messaging and chatbot platforms, customers can engage with a business and determine if they want to purchase a product or not.
Customer demands are normalizing chatbots. According to an article by Oracle, about 50% of consumers expect a business to be open 24 hours. Since it is impossible for companies to be available at all hours, they utilize chatbots to deliver to customer demands. With AI and Machine Learning, chatbots are getting smarter and more perceptive to customer demands. AI can help track customer preferences and provide customized services to individuals.
Characteristics of a Chatbot
Each chatbot offers a unique purpose. However, all chatbots should have the following characteristics to provide value to your customers:
- Conversational maturity – Conversation with a chatbot should feel seamless, almost as if a person talks to a real customer representative. Moreover, the conversation should be comprehendible. It should not leave the customer confused about a business and its services.
- Real-time conversations – One of the most vital characteristics of a chatbot is a response in real-time. Live chatbots can help in influencing a customer’s decision to make a purchase.
- Cross-platform – If a business is using various messaging platforms, it can deploy chatbots on all these platforms.
- Integrations – You can integrate chatbots with other software tools, including Customer Relationship Management (CRM) software, Augmented Reality (AR), and Virtual Reality (VR).
- Sentiment analysis – Since chatbots are conversing with real humans, the software should be capable of sentiment analysis and respond accordingly. It must be proficient at detecting the tone, context, and mood of the customer.
- Personalized services – Ecommerce chatbots must provide personalized recommendations to customers for enhanced customer experience.
- All languages – A language barrier should not prevent a customer from making a purchase. Hence, to make a chatbot most useful, it should allow conversations in preferably all languages.
- Customer data security – Customers must be able to trust a chatbot regarding the information they share. Hence, eCommerce chatbots must be secure from data breaches and hacking.
- Scalable – Chatbots must be able to scale up or down according to the requirements of a business. As a business grows, the customer traffic to a website increases. Hence, chatbots must keep up with the increase in traffic and accommodate all customers.
Chatbots are an essential tool used by customer service. These few statistics will put the importance of chatbots for eCommerce into perspective:
- Businesses can save 30% of the capital spent on customer service. [Chatbots Magazine]
- Chatbots answer up to 80% of routine questions from a customer and save cost. [IBM]
- Chatbots save about 2.5 trillion hours of customers and businesses combined. [Juniper Research]
- 50% of customers want to make a purchase through a messaging app. [Oracle]
Types of Chatbots
There are different types of chatbots, each for its intended purpose. They also vary from simple chatbots to complex ones such as those that utilize AI and machine learning. Moreover, chatbots are classified in different ways. Here is a brief introduction about the three common chatbots, based on complexity:
These are the most common type of chatbots and are also known as button-based chatbots. When customers open the chatbot, they have several choices to choose from. However, it takes some time for the chatbot to determine what the customer is asking.
These are slightly more sophisticated chatbots because they detect keywords in a response from a customer. The chatbot gives the closest reply based on the keywords used. These chatbots make use of AI to provide an appropriate response.
These are the highest level of chatbots in terms of intelligence. These chatbots make use of AI and Machine Learning. These chatbots use sentiment analysis to determine the tone of the customer and provide an appropriate response. In addition to this, these chatbots learn from previous conversations. Hence, they can detect customer preferences and provide recommendations.
Why Do eCommerce Businesses Need a Chatbot?
Chatbots are increasingly becoming common in eCommerce businesses. Consumers rely on messaging apps to communicate. Ease of use and instant communication helps consumers place orders whenever they want to. So more consumers than ever rely on this technology. Here are six ways that chatbots benefit eCommerce businesses:
Businesses are always looking for ways to save money. Ecommerce chatbots can save unnecessary costs spent on customer service operations. Companies can save financial resources on hiring customer support agents. Moreover, businesses do not have to spend money on hiring customer sales representatives fluent in multiple languages or hire additional staff fluent in other languages. Moreover, companies do not have to invest in the training of customer agents. Instead, they can focus on developing and deploying an eCommerce chatbot. In this sense, it saves cost.
- Increase sales and revenue – According to experts, eCommerce chatbots allow companies to make more revenue by increasing sales. It only makes sense. If you utilize chatbots to communicate with customers, place orders, and track deliveries, it automates many processes without causing delays due to human errors. It creates a positive brand image for the customer so that a business has returning customers and clients. In some instances, chatbots can also increase the conversion rate. Chatbots also increase user engagement by providing customized responses. Likewise, chatbots can automate the process of upselling and making product recommendations to customers in a way that is not too forced.
- Saves Time – We live in a fast-paced world where customers expect that businesses respond to them instantly. Without a chatbot, it takes about 10 hours for a company to respond to customer queries. Such delays have a negative impact on a business’s reputation. Hence, chatbots avoid delays by replying to customers instantly and resolving their questions without any delays. When making a purchase, customers do not have to open multiple tabs, which saves time. Moreover, if a customer has made a purchase previously, they do not have to provide credit cards and shopping information again. So it provides convenience to customers. Not only do chatbots save the time of their customers, but they also save the time of a company. Instead of replying to each query separately, companies can save the time of the customer support staff. In addition to this, they can avoid doing the same menial tasks again and again. Customer support agents can spend time fulfilling other job roles where the chatbot may not function. Hence, it frees up their time for other essential tasks.
Chatbots offer personalized conversations and experiences to customers. Trends show that customers are increasingly relying on chatbots and messaging apps to make purchases. People prefer interaction through messaging because it is hassle-free. It offers an opportunity for customers to get to know more about a business. Ecommerce chatbots also make it easier to refund and exchange items. You can also automate responses to inform customers about delays. From the perspective of a consumer, a conversation through a chatbot feels more friendly and informative. Hence, it creates a positive experience for the customer. Since chatbots also keep track of previous conversations with customers, customers can also receive coupons and discounts. Although customers end up spending more time talking to a chatbot, they are more satisfied as well.
Through eCommerce chatbots, customers can track the order, view shipping status, and view the product stock. Hence, it provides more visibility to customers. Moreover, customers can view these details anywhere and anytime they want.
Integration with Other Technologies
Chatbots can be integrated with other technologies, including CRM, as mentioned above. Companies can also integrate chatbots with real-time reporting tools to ensure positive customer experiences. Hence, it provides a high-level view of interactions with customers. It also allows agents to intervene in case the conversation is not going on as expected. Apart from CRM, many businesses are looking forward to integrating chatbots with VR and AR. These technologies offer an innovative tool that can give retail and makeup brands a competitive advantage. Customers can try-on a product or sales item without even stepping into the store. Not only does it offer a unique solution to customers, but it can also set a business apart from others.
To sum it up, chatbots are becoming popular in various fields, including eCommerce. Depending on a business and its operations, there are different chatbot technologies to choose from. However, chatbots with AI capabilities are becoming common and provide value to customers. For chatbots to be beneficial to customers, there are a few characteristics that they should have. For businesses, chatbots can increase revenue, drive customer engagement, and save time.
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