5 Benefits of Chatbots For Retailers
Chatbot  -  May 19, 2022

Chatbots in the retail industry have the power to be truly transformative. Everything that makes customers want to convert and become advocates for your business can be controlled and improved with chatbots. In this blog, we’ll break down the five key reasons how this can be achieved.

The chatbots we encounter in the retail industry and eCommerce are some of the most visible out there. With customer journeys moving online, the process of choosing an item, paying for it, arranging for its delivery and asking for customer service afterwards are increasingly managed with digital, instant, text-based communications.

But not only is this how things have to be done in order for customers to get what they want, it’s also an opportunity for retailers to take control over this journey in ways that just weren’t possible before. Chatbots are not just functional for retailers, they are a marketing and business growth tool. We’ve put together the key reasons why this is the case:

  • Improved customer experience. Customers want to feel comfortable on your website, just as they would in your store. Improved customer experience creates long term value.
  • Increased conversions. Good customer experience means more people buy your stuff. It really is that simple.
  • Improved customer service. Chatbots are no longer a frustrating customer service representative stand-in, only able to answer basic, predetermined questions. They are sophisticated enough to improve your customer service if used to their full potential.
  • More efficient use of resources. Chatbots can be live 24/7, 365 days a year. They can be set up in minutes. This means that bloated customer service departments are a thing of the past.
  • Staying ahead of the competition. Over 70% of all chatbot conversations are forecast to be with retail artificial intelligence (AI) chatbots by 2023. If retailers don’t start exploring the power of chatbots now, they’re going to be left behind.

1. Improving customer experience with retail chatbots

Everything that a customer wants to do can be helped by a chatbot.

For example – finding a product. Chatbots can be easily programmed to display a range of products based on the customer's selected preferences, or even their own history of browsing on the site.

Then, paying for the product. We’re all familiar with frustrating and confusing checkout options and hidden delivery charges appearing out of nowhere. Chatbots can remove the friction from these parts of the customer experience, making us more likely to hit “confirm order” and return to your brand for future purchases.

Want to know where your package is? A chatbot messenger can give an immediate response and send notifications when a status has been updated.

All of these interactions combine to form a positive customer experience and improve customer engagement, and with the ability to control them, chatbots can benefit every stage of the buying cycle.

2. Chatbots = more online conversions

Improving customer experience leads to more conversions. When customers don’t feel overloaded by information and can find what they need, then they’re more likely to see their purchase through.

Nudging and nurturing customers is how to achieve a higher conversion rate. With chatbots, you can affect this in minute detail, for example by automatically displaying product recommendations (with added opportunity to cross-sell), or by displaying personalized content, like a how-to guide or a brand’s FAQs page.

But how much of an impact can this really have? Well, according to business leaders, AI chatbots can increase sales by 67%. Chatbots are not just for answering simple questions, so humans don’t have to. Instead, they can be thought of as an essential part of your marketing effort, directly impacting customer decisions and improving the likelihood of conversion.

3. Retail chatbots and customer service

Real-time customer service offered by human agents can no longer be assumed to be a better experience than retail chatbots, given how well chatbots can now perform.

The move towards self-service, especially post-pandemic, means that customers don't necessarily want to talk to an agent to get answers to simple questions ("where do I find your returns policy"; "do you offer refunds"), and instead expect to be able to get a quick answer from some kind of messaging app. (40% of internet users prefer chatbot interactions to virtual agents, while 55% of people using chatbots expect instant responses to basic questions.)

More complicated customer queries ("can you let me know when this item will be in stock?") might seem like they need a real person to come up with an answer, but in fact it’s exactly these kinds of questions that reveal the true potential of bots when it comes to retail.

Answering this kind of query involves NLP (natural language processing) to understand the intent of the customer, combined with an integration with data sources (fulfillment, CRM, etc.) to provide accurate answers. This kind of chatbot used to be the preserve of enterprise-level retailers, but it’s longer a specialist technology requiring complex setup. Machine learning chatbots can be set up without any coding, while many chatbot solutions now come with CRM integrations straight out of the box.

4. Chatbots are a cost-effective retail scaling tool

Putting together a team of customer service live agents is expensive.

They also can’t be expected to work around the clock. With chatbot technology able to provide quick answers to customers for the very large majority of questions, it becomes much easier to scale customer support teams for retail businesses. Growth only requires the technology becoming more sophisticated, which is far less resource-intensive than building a bigger and bigger team to meet demand.

Chatbots can also be used to scale marketing campaigns for retail. Chatbots can be used to optimize touchpoints online and on social media without the need for expensive redesigns and rebuilds. For marketing agencies looking to change direction, chatbots can be used not only to deliver content but to provide personalized user experience, creating new opportunities for growth without the requirement for new investment.

5. Retail chatbots are the future, so it’s time to get on board

Not only are retail customers happy to use chatbots, they are expecting them – and expecting them to get better.

As of 2020, 54% of consumers are having daily interactions for AI chatbots. 78% of brands are planning to use AI and VR to serve customers, while 58% of customers say that technologies like chatbots and voice assistance are changing how they expect companies to interact with them.

Most major retailers are using chatbots, but they are not the preserve of businesses with large tech or marketing budgets that can put towards new technology and tools. A basic chatbot can be set up in minutes, and just making a start will already put you ahead of competitors in the retail industry unaware of just how powerful chatbots can be. 

With chatbots able to improve the entire customer experience, while also able to scale cost-effectively, how can they be overlooked as a way to gain a competitive edge?

If you’re an agency looking to implement a chatbot marketing solution, or a retail business looking to access the potential of chatbots for growth, why not find out more about Instabot and start a free trial today.

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