Will chatbots lead consumers to more purchases?

Aug 24, 2017
Cristian Grossmann

Chatbots have been rapidly gaining popularity in the last few years. Twenty-five percent of U.S. consumers use chatbots daily, and that figure spikes to 40 percent among Millennials. Seventy-seven percent of those surveyed said positive interactions with chatbots make them buy more, a trend that should perk up retailers’ ears.

Large brands like H&M and eBay have been utilizing chatbots in various ways. When customers tell H&M’s bot what they’re looking for, it will build an outfit for them based on personal preferences. Ebay takes the “chatbot as a personal assistant” model and applies it to its whole catalogue, including enhanced search functionality, the main benefit being the chatbot remembers personalized information like the customer’s sizes.

Anker and Kia also use chatbots to guide purchasing decisions and drive context-driven exploration of their products. The bots are well-received due to their simplicity, personalization and mobile engagement.

Since so many customers are making decisions on mobile, chatbots will start gaining more traction in the retail space in the next year as retailers start experimenting with new methods. Right now, chatbots already have potential to reduce staff workloads by enabling large scale delivery of useful information, and in the future will be able to answer more complex questions. All this opens the door for retailers to spend more time on other strategic initiatives.

For a revenue stream to scale, retailers and brands need high consumer adoption and consumers are clearly grasping onto the idea of chatbots. A 2017 chatbot report suggests this artificial intelligence technology isn’t a fad, but an actual trend. Of the 2,000 consumers interviewed, 35 percent said they want more businesses to adopt chatbots. 

DISCUSSION QUESTIONS: Do you agree that chatbots used correctly can drive incremental sales for retailers? To what extent can chatbots replace human interaction? How do you see retailers using chatbots in the future?

"Retailers and brands need to think how to use chatbots to improve the lives of their consumers, not how to reduce their own costs. "

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13 Comments on "Will chatbots lead consumers to more purchases?"

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Joanna Rutter
3 months 18 days ago

A strong, customer-oriented automation solution to problem-solving can be powerful when, key part of the question here, it’s “used correctly.” Simply deploying a chatbot in order to save money on labor costs is short-sighted, but using AI to learn from those conversations gives retailers data they couldn’t sort or analyze that powerfully before and allows them to serve their customers better in the long run.

Cristian Grossmann

Completely agree with you, Joanna! Using chatbots correctly can be tricky but the opportunity is massive in the long run.

Jon Polin

Retailers and brands need to think how to use chatbots to improve the lives of their consumers, not how to reduce their own costs. Offer consumers a delightful experience via chatbot and they will engage more, buy more and be more satisfied overall. Plus, the brands and retailers will glean valuable data from the chatbot chats.

Art Suriano
Chatbots are nice and have a place in today’s retail world. However as with anything there are limitations and as excited as the bean counters may be, thinking of the day they won’t have to worry about any payroll because it will all be robots, chatbots, etc. human interaction is something you cannot replace. When you have an issue with a company and need to get it resolved, do you prefer talking to a computer who doesn’t understand your request or a human being who can help you? So chatbots are fine for basics and can help drive sales to… Read more »
Joan Treistman
I admit I had to look up “chatbot.” Now that I have the definition I realize that my Amazon Echo is training me as to how to engage with a chatbot. Therefore, I’m one of those shoppers who can be engaged with chatbot technology. Yay me. And in turn with the right strategy my engagement can be turned into sales. There are those, I think they’re younger and/or more technologically grounded, who are more aware and apt to turn to chatbots quickly and easily. But the rest of us (I think there are more than just me) will get there… Read more »
Kiri Masters
As others have noted, chatbots should not be viewed as a replacement for human customer service. However, chatbots can effectively occupy a current blank space in the customer service framework: sitting between user-directed help content (FAQs, knowledge bases, videos) and human customer service. How many times have you had to wait on hold, deal with a slow-responding customer service agent and agents who can’t answer seemingly simple product questions about product features or how much stock is available in your local store? In many cases, the bots will be far more efficient and helpful than human agents! We’ll look back… Read more »
Shep Hyken

The best chatbots create a simulated human-to-human experience. The customer should not know they are dealing with a computer. Fueled by AI, the bot should know the customer’s history, buying patterns, support issues, etc. That allows the bot to create seamless support from prior issues, make recommendations to prevent future issues and suggest to customers different products or upgrades that will enhance their experience.

Dave Bruno

Chatbots are rapidly transforming our expectations of the way we interact with the internet: no new interface, no download, no password. And people are clearly responding to the simplicity. When Facebook launched their chatbot platform on Facebook Messenger (with around 1 billion users), 11,000 bots were added in the first three months. The rise of conversational commerce is inevitable. For further evidence, merely reference our discussions here yesterday about Walmart’s alliance with Google Home as a threat to Amazon Alexa, the mother of all chatbots. For those who ignore conversational commerce, beware: winter is coming!

Ricardo Belmar
As long as retailers are using chatbots to solve customer problems from the viewpoint of the customer rather than the viewpoint of the retailer this should result in great success. Chatbots have proven themselves in customer service scenarios and in curation activities when engaging customers and the future looks bright for continued development in new use cases. Many of these use cases involve replacing humans in the process and retailers need to be sure of the quality of the chatbot they are deploying in advance of the expected cost savings that it should bring. Deploying chatbots should first and foremost… Read more »
Craig Sundstrom

“Used correctly” is the key phrase here. If the bot recommends a bunch of items that end up being out-of-stock, it will likely create frustration more than anything else. Similarly, if the purpose isn’t so much of being useful as simply pushing sales, customers are likely to see through the effort and go elsewhere.

Ralph Jacobson

There is no question that chatbots drive incremental sales. As an example, Macy’s On-Call can accept shopper questions in natural language regarding things like where specific products, departments, and brands are located. These technologies are able to find products more effectively than typical human call centers and give equal billing to all SKUs regardless of current product velocity. That’s a big deal for retailers’ slowest 80% of products they carry.

Janet Dorenkott
3 months 17 days ago

Absolutely! Mindtree implements chatbots all the time and see first hand proof of increased sales. Chatbots are definitely helping to increase sales. Anytime you can respond to questions quickly and keep the customer engaged, your chance of a sale will increase. In the very near future chatbots will respond verbally, giving an even more human-like experience. Keeping it fast, simple and accurate will definitely increase sales for those companies who implement it first and most accurately.

Phil Chang
I see chatbots like other tools — I think they’re great at transactional conversations and the ability to filter key messages back to humans. Chatbots will be most effective for revealing key behavioral moments that will allow a brand/retailer to create experiences. Obviously this changes by the minute — for all you know, I’m a chatbot now with an opinion. (I’m not … or am I?) I am excited that chatbots can help to level up customer service and give consumers a good experience with most things — I’m really excited to see what great human customer service can do… Read more »
"Retailers and brands need to think how to use chatbots to improve the lives of their consumers, not how to reduce their own costs. "

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