How AI Chatbots Are Benefiting The eCommerce Industry?

Whether you call it a revolution or an intrusion, chatbots have gained a significant place in the ecommerce practices. From the top giant companies like Google, or Amazon, to medium and small scale ecommerce stores, all are actively using chatbots for their business operations. Whether it is a customer support task or team communication work the chatbots can handle all. You would be surprised to know that the chatbot market is expected to reach a valuation of $3 billion by 2021. In 2016, the global market of chatbots was valued at $190.8 million. So we can say that it having a good rise with an average growth rate of more than 25%. So before delving about why it is becoming necessary for ecommerce sites, let’s know more about chatbots what they are, and other things about them.

What is a Chatbot?

Firstly, a chatbot is not a highly technical graded machine that handles the company’s customer but instead a human-made computer program which can initiate & carry a human-like conversation with humans. These chatbots are programmed in such a way that they can handle all the queries that a customer can make regarding your niche. While the initial chatbots were having similar answers due to pre-programmed scripts, the newer chatbots are coming with pre-built machine learning and artificial intelligence, by which they can learn from experiences and can resolve your highly advanced queries on the spot.

Also Read: How Artificial Intelligence Is Driving eCommerce Industry

We can’t say that chatbots have completely replaced human beings from every customer service, but it is a truth that they are replacing them with a fast rate. With the advancement of technology especially AI, it is hard to determine whether you were engaging with a human representative or a coded program.

Chatbots have had a major influence on the ecommerce industry in particular. The ecommerce chatbots are revolutionizing the way companies used to interact with their customers for resolving their queries. They give a highly personalized experience with a faster and accurate response. Also, the chatbots can be deployed to many different platforms, such as Facebook Messenger, Whatsapp, and others.

They can cut the operational cost of an ecommerce store by 30%. Nearly half of the businesses are planning to spend more on chatbots than mobile applications. 64% of the internet users find the 24 x 7 availability of chatbots as their best feature.

Learn More: How To Develop A Mobile App For eCommerce

Here are some of the roles that chatbots can play in your ecommerce practices:

1. Marketing Expert

An online store owner has now started using ecommerce chatbots for catering to your branding and marketing needs. The chatbots can be customized and trained as per the different marketing norms of different industries. It can answer the queries of your customers or client, and can also showcase your services and products to them. This builds the reputation of your brand and customer loyalty. They can do remarketing for increasing conversions by messaging apps to remind users of their earlier purchases and related new products & services arrived can be suggested.

2. Store Executives

The store executive’s role is to keep track of inventory & notifying the owner about stocks of products. However, the role becomes too arduous when there are thousands of varieties of products in a single store, tracking & managing them is not an easy task. This is where chatbots help. When they are programmed to manage the inventory, they can make orders when the stocks are falling, and can also notify the customer about the item they like to buy for when it would be back in stock. They are helpful as they cut down the total time and effort.

3. Conversational tools

Last but most important, chatbots can also act as conversational tools. Suppose a customer wants to buy a product on your ecommerce store but is having some queries. Now, he will reach the customer care desk of your company and will raise the ticket. The probability that his query will get resolved immediately is minimal. But this is not the case with chatbots. The ecommerce chatbots can act as your 24 x 7 customer executives and resolve any type of queries of your customer. They are programmed to enter a live chat with the user. Whether the customer needs to buy a small knife or a car the chatbots can help in resolving every query.

Benefits of Chatbots in the ecommerce industry

Nearly 80% of online businesses are expected to use chatbots by 2021. Why? Here are some of the benefits that chatbots provide to an ecommerce store:

1. Better Customer Engagement

Today’s computers prefer to send messages instead of making phone calls to customers. However, to keep your customer engaged, you need to respond at the appropriate time. As per the research of Harvard Business Review, a delay of just 5 minutes in resolving the customer query can decrease the customer-engagement rate, and a delay of 10 minutes reduces this metric by 400%. On the other side, if you employ ecommerce chatbots for handing your potential buyers, they can increase the customer retention rate by 54%.

2. Collect Data

As the adage goes, data is a new oil. There can be a great use of customers’ data, provided you have collected it with customer’s consent and by ethical means. Chatbots are the best medium to motivate your customers to share their data such as preferences, contact details including e-mail addresses and phone numbers, for providing a better customer experience.

This way the chatbots can also provide you with the marketing services. By collecting the customer’s data, you can reach them through mail & messages, and offer them special offers, discounts, etc.

Also Read: How To Develop An eCommerce Website

3. Reduce customer acquisition cost

CAC or customer acquisition cost is a measure that shows how much you spend to attract one customer, and obviously the lower the CAC, the better. Ecommerce chatbots can reduce CAC as they offer an instant and engaging conversation with your customers on your online store by which customers don’t leave your site easily. Also, the chatbots can provide personalized product recommendations based on the previous orders done by customers. As a result, there are more chances, that a visitor will get convert into the customers.

4. Reduce customer care support costs

When a customer is having an interest in the products you are offering, there may be chances that he/she will have queries or require more details about the product. Statistics show that answering simple questions is relevant to 55% of online shoppers, and 64% of online shoppers prefer 24/7 online support that cannot be provided by a real person. Here the chatbots can help you a lot, by using simple yet efficient chatbots, you can cut down your customer care operational costs by 30%.

5. Increase Customer Retention Rate

Customer retention rate refers to the percentage of visitors your company has converted into a customer over a specific period of time. A higher customer retention rate better would be your business. You can also call this as customer loyalty. Chatbots can increase the CRR as they would be in constant touch with your audience, will provide them with better customer service and product suggestions. Many brands like Sephora, 1-800-Flowers, eBay, H&M, and Burberry have already started using them to communicate better, provide customer service, handle order status queries, recommend products, and drive sales.

Types of Chatbots

Here, we will discuss the different types of chatbots which are helping industries of varying niche.

1. Support Chatbots

Support Chatbots you already know about. They help the user to walk through the company’s business and can answer a range of FAQs. These chatbots usually come with deep learning and NLP (natural language processing) to perform actions. Speech recognition is another important feature of them. You can find such chatbots working in human resources, ecommerce, digital marketing, and healthcare. Some of the services they provide are:

• Customer Service
• Recommendations
• Food Ordering
• Answering FAQs

2. Skills Chatbots

These chatbots have limited abilities and can follow a single command to perform an action. For e.g. skill chatbots can perform the only task of switching lights off & on with its voice assistance ability. It requires NLP features for a better and quick understanding. Amazon Alexa is having great thought it is not just a skill chatbots but comes into many categories.

3. Assistance Bots

Assitance bots, as the name signifies helps the users to resolve any queries. They are somewhat similar to support chatbots. They are good at performing conversations and answering FAQs. Some of the examples of the assistance chatbots are Siri by Apple, Google Assistant, Amazon’s Alexa, and others. Siri doesn’t only assist the user in performing any task like making a Google search, fetching news, etc. it also responds in a funny way when it doesn’t understand a query.

4. Transactional Bots

Transactional Chatbots can be said as a subcategory of Assistance bots because they assist us in performing certain transactional activities. These mainly include placing an order, making a reservation at a restaurant, etc. The transactional bots can be developed as per your industry niche.

5. Informational & Information Gathering Chatbots:

These types of Chatbots help in collecting and distributing information. They can be news bots, push notifications, news recommendations, etc. They are having a significant place in the education field, corporate training, digital marketing, etc. They can act as research assistants for extracting information from different sources.

6. Social Messaging Chatbots

These chatbots can help your company to serve your customers or clients on different social media platforms, such as Facebook Messenger, Instagram, Whatsapp, etc. It is easy for customers to directly interact with a bot as they do with their kith or kin.

Wrapping Up

Chatbot Development for ecommerce has become essential for the industry of almost every niche. They serve your company in many different ways. At Emizentech, we can help you in developing chatbots, and chatbots integrated web applications just like you prefer.