Proliferation of Chatbots in eCommerce

By CIOReview | Tuesday, November 14, 2017
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The introduction of Apple’s Siri in 2011 marked the merger of artificial intelligence (AI) and marketing strategy, giving rise to chatbots. Designed to simplify the customer service experience by emulating a human, chatbots are conversational computer programs that customers can interact with through a messaging interface. Chatbots are bringing about a revolution in how enterprises approach branding and sales. The five ways that chatbots affect customer behavior are:

Simplifying the user experience

The report states that millennials will account for 35 percent of customer purchases by 2030. Since this, demographic is comfortable with online shopping and messaging as a form of communication. Apart from simplifying the consumer experience, chatbots provide up to 30 percent saving s in customer support service annually. Additionally, chatbots eliminates investments in onboarding, training and hourly wages of human agents, allowing funds to be allocated for future design and marketing plans.

Branded skills

AI technology is entering homes at an unanticipated rate, with the introduction of Amazon’s Eco, Alexa and Dot as well as Google Home. These AI connect to other technologies around the house and adapt to consumer habits. For instance, LG’s SmartThinQ home automation hub works with Alexa to determine detergent usage and initiates a purchase order automatically, once stocks reach a certain amount. Tests are being conducted to integrate chatbots into home appliances.

Identifying customer habits

Chatbots not only enhance customer experience, but also collect data related to customer habits and purchase history. This data allows the bot to present a personalized experience to the consumer with each interaction. The advertising industry leverages such information to determine the most favorable response from customers and enable chatbots to present relevant advertising.

Providing concierge service with luxury brands

Fashion brands are offering their high-level service through chatbots, allowing ease of access for interested customers. For example, Tommy Hilfiger and Burberry allow customers to preview their upcoming lines with the help of a chatbot. Customers can watch fashion shows, and purchase items on their smart phones.

Lifestyle Management

Chatbots provide assistance for everyday habits of consumers and enable marketers to organically incorporate sales and cull data. Brands are leveraging chatbots to improve customer service, provide faster responses, and gather data about customers, which result in improved conversion rates and better search engine rankings.