eTail Europe 2021

London, UK

How Chatbots Are Reshaping Ecommerce

Chatbots are on the rise, creating a potential goldmine for ecommerce as businesses look for new ways to attract, entertain, and monetise an audience.

It may come as a surprise to some, but messaging apps - such as Facebook Messenger, WhatsApp, Line, etc. - surpassed social networks in terms of global usage as long ago as Q2 2015.

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Firing up their smartphones or logging in online, consumers are now using these deceptively simple text communication apps more than they are the big social media platforms - Facebook, Twitter, Instagram et al. More importantly, people don't just want to use these services to chat with their friends, but are increasingly expecting to be able to communicate with brands via instant messaging (IM) as well - and this is what has led to the rise of the ecommerce chatbot.

The Chatbot Revolution Is Here

A chatbot is an automated program that simulates conversations, answers queries, and handles specific requests. Business use them to provide automated, intelligent responses to questions from online and mobile customers. In effect, the best chatbots are able to mimic a real human being in conversation and are programmed to make decisions based on customer reponses. Chatbots have been around for a couple of years, and already consumers have become quite comfortable talking to and even buying from them.

Indeed, recent research from myclever reveals that many consumers are more than positive about using chatbots to communicate with brands, and articulate a number of benefits that the technology facilitates.

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Just looking at the top four answers from the survey, it's clear that many consumers believe that there is much convenience that is realised when organisations deploy chatbots - 24-hour service (68%), quick answers (64%), instant responses, (51%), and overall convenience for the customer (50%).

Separate research from ubisend - accessible in the 2017 Chatbot Report - shows that out of 2,000 consumers interviewed, 35% were keen to see more businesses adopt chatbots. That means that, although only 57% of respondents had used a chatbot before, over half are already asking for more.

In addition, chatbots are proving to be a viable new channel for generating revenue. One in five UK consumers would be willing to purchase goods and services via a chatbot, with 26-36-year-olds willing to spend PS481.15, and 37-47-year-olds PS353.41.

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Chatbots in Ecommerce

The most forward-thinking brands are already using chatbots to interact with customers and translate their unique needs into repeat purchases.

British Airways, for example, utilises Facebook Messenger's bot technology to allow customers to interact with sales using emojis. The BA bot asks customers a series of questions, who are then given a selection of emojis to choose from. Next, the bot will recommend a holiday destination to suit their personality and mood, and a link pops up directing the user towards the airline's sales page.

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In the takeaway sector, customers can now talk to a chatbot to order a Domino's pizza, bypassing the need to fill out an online form or make a phone call.

French distilled beverages company Pernod Ricard has also deployed a chatbot named The Cocktail Coach, designed to showcase the brand's various drinks in the form of a recipe guide. Users can ask the bot for cocktail ideas, and can also click through to buy ingredients on Ocado's ecommerce site.

A Seismic Shift in Ecommerce

The rise of chatbots is a seismic shift in ecommerce, with the ultimate goal being to foster better shopping experiences and streamline a vast matrix of interactions. Retailers that don't move fast by acting on this new technology now will find themselves left behind.

Often, as both BA and Pernod Ricard have realised, it is the early stages of the customer journey that lend themselves to bot automation. Providing users with a fun and unique experience and an innovative way to interact with the brand can open up new revenue channels that simply weren't possible before this technology arrived.

The conditions are indeed ripe for the rise of chatbots. Consumers are willing to talk to and buy from businesses, and the technology is there to match consumers' expectations of how brands should interact. Retailers will need to work with third parties such as Botsify, Living Actor, and LivePerson to ensure that the chatbots they deploy are configured correctly, back-end input is up to scratch, and that algorithms are sophisticated enough so that they do indeed improve the customer experience and don't blunder by giving inaccurate answers to users' questions. For indeed, chatbots must make customer experience efficient and reliable, and the best chatbots will delight as much as they resolve.

Chatbots are set to be a hot topic at eTail Europe 2018 , with sessions including 'The Future of Bots & Machine Learning' and 'Chatbots: Should You Use Them for Pre-purchase, Post-purchase, or Both?'

Download the agenda today for more insights and information.

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