Chatbots in Ecommerce: Complete overview

chatbot in ecommerce

Chatbots have come a long way over the past decade to help companies of all sizes provide better service to their customers. They have become a topic of discussion among many businesses that are trying to figure out how to implement a chatbot into their business processes. When we delve deeper into the future of chatbots, there are a lot of questions that have not been answered. In today’s article, we will take a closer look at the role of chatbots in customer support services and show how they can be a great asset for many companies. Let’s start by getting some basic information about what a chatbot is.

What is a Chatbot?

A chatbot is an AI-powered computer program that understands human speech and can engage in a conversation with human beings. In the world of e-commerce, chatbots play an important role in the customer experience. These include things like helping customers complete their purchases, provide recommendations to the shoppers and offer customer support as well. Even with all of these benefits, companies are having trouble implementing chatbots because all of the expanded functionalities were developed fairly recently.

What is the Role of Chatbots in Customer Service?

There is no question that the role of chatbots in customer service is growing. Recent data shows that compared to 2018, in 2019 twice as many consumers were willing to engage with chatbots because they were “very helpful.” Still, there is a big role for humans in the customer service process. A recent survey shows, done by Forbes, that 86% of consumers prefer to interact with a human agent; 71% said they would be less likely to use a brand if it didn’t have human customer service representatives available.

Therefore, the best approach would be to combine both chatbots and human customer service agents to provide the optimal experience. For example, chatbots can handle basic customer inquiries, but for more complex inquiries, it can escalate the issue to a human agent.

Now that we know about the role chatbots play in today’s customer service environment, let’s take a look at how they can be helpful and when they will not be enough.

Chatbots Now and in the Future

Recent data shows that 71% of GenXers and 82% of millennials are already using chatbots. One of the reasons why chatbots are growing in popularity is because of the time they save. Since they can retrieve information faster than a human customer service representative, people are willing to use the technology to save a few minutes. Chatbots can also help companies solve the most common problems shoppers are dealing with such as:

  • Difficult website navigation
  • Can’t find answers to simple questions
  • Basic details about a business are hard to find
  • Takes too long to find services

The benefits chatbots offer a business are huge and are definitely worth the investment. Such benefits include:

  • Reduced costs – Since chatbots can work 24/7 and never need a day off, don’t require a salary, they are much cheaper than human workers.
  • Increased personalization – Chatbots can be used to collect information about your customers to offer them more personalized product recommendations.
  • Offer guidance – If you have a large e-commerce platform, a lot of time customers can get lost in the sea of products. Chatbots can help such customers find the exact product they are looking for in a huge catalog.
  • Reduce shopping cart abandonment – A lot of time customers will put items in their shopping cart and, for some reason, they will not complete the purchase. Chatbots can remind users of items in their abandoned shopping cart and ask them if they are willing to proceed towards checkout or if they would like to clean their cart.

Now that we know about the role chatbots can play in any e-commerce business, let’s learn about how they actually work.

How Do Chatbots Interact With Humans?

Before you start implementing chatbots on your website, it is a good idea to learn about how they actually work. So, first of all, we need to understand that there are two kinds of chatbots. The first one is a rule-based chatbot that uses a tree-like flow to help guests with their queries. This means that the chatbot will guide the guest with follow-up questions to eventually get to the correct resolution. The structures and answers are all pre-defined so that you are in control of the conversation. The benefits of such chatbots include:

  • They do not require extensive training which streamlines and simplifies the implementation process
  • The cost of development and implementation will be lower since it is not as complicated as AI-powered chatbots
  • You can better control the behavior and responses of the chatbot since all of the responses are pre-defined.

The other type of chatbots is the ones that are powered by AI. It is powered by Natural Language Processing (NLP). So, unlike with a rule-based chatbot, it won’t use keywords to answer, but it will try to understand the intent of the guest, meaning what is it that the guest wants. The benefits of using AI-powered chatbots include:

  • It will continuously improve on its own without much intervention on your part
  • It can understand typos and grammatical mistakes, so it is still able to respond to the question.
  • When your customers are interacting with an AI-powered chatbot, it will feel more like they are interacting with a human

The reason AI-powered chatbots offer life-like experiences is that they are trained on actual human conversational data. AI researchers take this raw data and usually hire an outsourcing company to perform the data annotation. This includes several methods of tagging and labeling certain keywords and phrases for the AI system to learn. Over time, this system becomes better at understanding all kinds of human languages and can replace humans in various aspects of customer interaction.

Given all of the challenges of developing chatbots are they worth the investment? We explore this in the next section.

What are the Pros and Cons of Using Chatbots in E-commerce?

While we touched on some of the benefits of using chatbots in e-commerce, additional benefits include:

  • Help build relationships with your customers – Customers will be more inclined to use a chatbot to help them with purchases because of the time it saves them. Such interactions help you build relationships with customers.
  • Keep up with customer expectationsCustomers are always expecting faster and better service and chatbots can help you keep up.
  • Provide customer service to any part of the world – We already mentioned that chatbots never need rest and are always available. However, they can also help you provide customer service in any language you need.

The downsides of using chatbots include:

  • Not as personal as human interaction – While chatbots try to simulate human interaction, they cannot fully replace humans in this regard.
  • Room for potential errors – Even though the high-end chatbots are well trained, there is always a chance they will not be able to understand a customer’s request, causing increased aggravation.
  • Need for maintenance – As your user demand and business priorities shift, you’ll need to update your bot accordingly, which requires analysis of previous bot conversations to identify common questions your bot receives.

Overall, Using Chatbots in E-commerce is a Good Investment

While we have looked at some of the positives and negatives of using chatbots in e-commerce, we have to say that the benefits outweigh the potential challenges that will need to be overcome. We need to remember that this technology is constantly improving and a lot of the problems that researchers are grappling with will be solved as the technology matures and progresses.

Chatbots in Ecommerce: Complete overview
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