- Consumer retail spending is expected to reach $142 billion by 2024 via Chatbot technology, predicted Juniper Research.
- By 2024, technology will be embedded directly into a retailer's mobile app rather than accessed through a browser or messenger.
Chatbot Technologies have been making rounds since a couple of years. A chatbot is basically an artificial intelligence software that can imitate or simulate a conversation with a user in natural language through various platforms like messaging applications, websites, mobile apps or through the programmed telephone call.
Chatbots are usually described as one of the most potent expressions of interaction between humans and machines. From a technological point of view, a chatbot represents the natural evolution of a Question Answering system, taking leverage from Natural Language Processing (NLP), through which, it formulates responses to questions in natural language.
When a user types in a request, the chatbot analyzes it, identifies the user intent and then extracts relevant answers or entities for the user.
Now taking all this information into a shopping scenario, it’s not difficult to understand what a major role these chatbots can play! Since they act as the first point of contact, therefore, their first and foremost task is to respond to customer service inquiries, then recommend relevant products and even carry out payment transactions between the consumer and the shop.
Just imagine how the big retailer companies can benefit from these chatbot technologies! They can easily, and very potentially reduce costs by minimizing the number of customer service representatives and downsizing overhead.
It’s a win-win situation for the consumer as well as the retailer!
Coming to the banking sector, it has been reported that banks have a high customer service cost, so they have also started tapping into chatbots. This helps them save the wage costs that must be paid to the hosting customer service representatives in native call centers. These customer service representatives are responsible to increase customer loyalty, which can now be achieved through chatbots, in lesser price and higher value!
However, this still needs to be remembered that there are people who are fond of online shopping, and approximately 39% of them claim to have a good experience with an online chat platform, but only 16% liked their experience with chatbots! In fact, a 2019 survey suggests that 26% of consumers think that augmented reality made them consider a brand to be tech savvy, compared to 6% of respondents who said the same for chatbots.
These surveys indeed show that chatbot technologies have a long way to go to carve their mark in a common user’s heart. Maybe, with time, things will get better and chatbots will be able to provide the promising results they are meant to.
Despite all these facts and hindrances that the majority retailers face, Ulta and David’s Bridal have delved into the chatbot technology to address customer service questions. Square has also announced to have acquired an artificial intelligence company which automates responses to consumer questions and feedback.
With all these unfurling technologies and bigger brands tapping into them, it is predicted that retailers will soon move towards integrated chatbots in retailers' mobile apps, rather than in browsers or messaging apps, in order to let them control the development and retain branding.
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