Chatbots: Putting the AI in Retail

clockicon 4 minute read

 

FuturePay-Chatbots-Blog

 

Between Facebook Messenger’s integration with Uber and other businesses, Sephora’s use of chatbots on Kik, and Taco Bell’s “tacobot” on Slack, chatbots are becoming an increasingly common way for businesses to leverage conversational commerce and make it easier for people to shop. With chatbots starting to become a more normal part of retail, we are starting to see a number of ways they can help both customers and retailers.

 

Conversational Commerce

 

Conversational commerce is a term coined by the inventor of Twitter’s hashtag functionality, Chris Messina, which he described as:

 

“Utilizing chat, messaging, or other natural language interfaces (i.e. voice) to interact with people, brands, or services and bots that heretofore have had no real place in the bidirectional, asynchronous messaging context.” (source)

 

As you can see bots are part of the definition of conversational commerce, and indeed they will be an important part of the advancement of conversational commerce.

 

Consumers have been bombarded with so many apps that many don’t even download them anymore. Meanwhile messaging apps have exploded in popularity, to the point of actually surpassing social networking apps. While retailers may find it challenging to convince consumers to download their standalone retail app, they have a lot of opportunity to connect with shoppers through messaging. With so many consumers using messaging apps every day, chatbots and conversational commerce help businesses be where their customers are.

 

messagingapps

 

The Power of Chatbots

 

Conversational commerce leverages the ubiquity of messaging apps and allows retailers to conduct one-to-one conversations with customers in real-time, where they can help customers overcome issues and find products as well as answer any questions. While some companies actually have people answering their Facebook messages, others are turning to chatbots and AI to handle the (potentially) thousands of one-to-one conversations at a time.

 

One of the benefits of conversational commerce for consumers, besides having access to instant support and a simplified buying process, is not having to download another app. Conversational commerce allows consumers to complete a purchase in a minute or two, without having to commit to any real estate on their device to a retailer’s standalone app.

 

Chatbots still have a lot of room for improvement, but considering this is only the first generation of the technology, it’s quite impressive. Plus, who cares if it’s a bit choppy when it’s already bringing in customers by the “tens of thousands.”

 

The Non-Human Touch

 

While a number of companies have found interesting ways to use chatbots for commerce, there is some contention in regards to the effectiveness of bots for customer service.

 

Proponents point out that chatbots can either initiate a conversation with a potential customer or respond to basic queries, like letting customers know what time the store is open until or if they have that black dress in the right size and in stock. In this way it’s easy to see how bots could be potentially useful for customer service, answering simple or frequently asked questions.

 

But some experts caution retailers about using chatbots for customer service, especially if customer service is a big part of your brand strategy. Brand personality and customer service often go hand-in-hand, but leaving your customer service up to a bot removes your brand personality and replaces it with, well, robotic responses. What this means is that while bots are suitable for simple questions, anything that requires sensitivity or warmth should be handled by your (human) customer service team.

 

Chatbots in the Wild

 

Despite these limitations, a number of retailers such as Sephora and 1-800 Flowers have found creative ways to provide shoppers with real value.

 

For instance, Sephora uses a bot to interact with customers on Kik and provide them with personalized makeup tips, reviews, and product recommendations. The interaction begins with a brief salutation from Sephora’s bot, and then asks if you would like to take a short quiz, which the app uses to create a more personalized experience.

 

sephoraquiz

 

While currently Sephora’s chatbot is still a bit robotic sounding (it’s fairly obvious you’re talking to a computer) this is only going to improve as they gain a better understanding of how customers like to chat.

 

AI for Retailers

 

But AI isn’t just helping customers, it’s also helping retailers by taking over various tasks and time consuming business processes, freeing up more time for entrepreneurs and professionals to focus on other more important tasks.

 

For instance, Kit, a virtual assistant for Shopify stores, can perform a number different tasks from SEO to email marketing. Kit is an AI employee that you can interact with via text message or Facebook Messenger, and handles much of your marketing. Alternatively, IBM’s Watson is powering more sophisticated AI for enterprise level retailers.

 

Final Word

 

We are just starting to see the beginning of using AI for commerce, but it is already proving to be valuable for retailers and consumers alike. Going forward it will be interesting to see the types of innovative bots that retailers start using and which aspects of commerce benefit most from AI. For instance, in the future bots may become more proactive rather than reactive, letting you know that the grocery store is having a promotion for the dish soap that’s on your shopping list or telling you that fastest route to the store based on traffic and road conditions.

clockicon 4 minute read

 

FuturePay-Chatbots-Blog

 

Between Facebook Messenger’s integration with Uber and other businesses, Sephora’s use of chatbots on Kik, and Taco Bell’s “tacobot” on Slack, chatbots are becoming an increasingly common way for businesses to leverage conversational commerce and make it easier for people to shop. With chatbots starting to become a more normal part of retail, we are starting to see a number of ways they can help both customers and retailers.

 

Conversational Commerce

 

Conversational commerce is a term coined by the inventor of Twitter’s hashtag functionality, Chris Messina, which he described as:

 

“Utilizing chat, messaging, or other natural language interfaces (i.e. voice) to interact with people, brands, or services and bots that heretofore have had no real place in the bidirectional, asynchronous messaging context.” (source)

 

As you can see bots are part of the definition of conversational commerce, and indeed they will be an important part of the advancement of conversational commerce.

 

Consumers have been bombarded with so many apps that many don’t even download them anymore. Meanwhile messaging apps have exploded in popularity, to the point of actually surpassing social networking apps. While retailers may find it challenging to convince consumers to download their standalone retail app, they have a lot of opportunity to connect with shoppers through messaging. With so many consumers using messaging apps every day, chatbots and conversational commerce help businesses be where their customers are.

 

messagingapps

 

The Power of Chatbots

 

Conversational commerce leverages the ubiquity of messaging apps and allows retailers to conduct one-to-one conversations with customers in real-time, where they can help customers overcome issues and find products as well as answer any questions. While some companies actually have people answering their Facebook messages, others are turning to chatbots and AI to handle the (potentially) thousands of one-to-one conversations at a time.

 

One of the benefits of conversational commerce for consumers, besides having access to instant support and a simplified buying process, is not having to download another app. Conversational commerce allows consumers to complete a purchase in a minute or two, without having to commit to any real estate on their device to a retailer’s standalone app.

 

Chatbots still have a lot of room for improvement, but considering this is only the first generation of the technology, it’s quite impressive. Plus, who cares if it’s a bit choppy when it’s already bringing in customers by the “tens of thousands.”

 

The Non-Human Touch

 

While a number of companies have found interesting ways to use chatbots for commerce, there is some contention in regards to the effectiveness of bots for customer service.

 

Proponents point out that chatbots can either initiate a conversation with a potential customer or respond to basic queries, like letting customers know what time the store is open until or if they have that black dress in the right size and in stock. In this way it’s easy to see how bots could be potentially useful for customer service, answering simple or frequently asked questions.

 

But some experts caution retailers about using chatbots for customer service, especially if customer service is a big part of your brand strategy. Brand personality and customer service often go hand-in-hand, but leaving your customer service up to a bot removes your brand personality and replaces it with, well, robotic responses. What this means is that while bots are suitable for simple questions, anything that requires sensitivity or warmth should be handled by your (human) customer service team.

 

Chatbots in the Wild

 

Despite these limitations, a number of retailers such as Sephora and 1-800 Flowers have found creative ways to provide shoppers with real value.

 

For instance, Sephora uses a bot to interact with customers on Kik and provide them with personalized makeup tips, reviews, and product recommendations. The interaction begins with a brief salutation from Sephora’s bot, and then asks if you would like to take a short quiz, which the app uses to create a more personalized experience.

 

sephoraquiz

 

While currently Sephora’s chatbot is still a bit robotic sounding (it’s fairly obvious you’re talking to a computer) this is only going to improve as they gain a better understanding of how customers like to chat.

 

AI for Retailers

 

But AI isn’t just helping customers, it’s also helping retailers by taking over various tasks and time consuming business processes, freeing up more time for entrepreneurs and professionals to focus on other more important tasks.

 

For instance, Kit, a virtual assistant for Shopify stores, can perform a number different tasks from SEO to email marketing. Kit is an AI employee that you can interact with via text message or Facebook Messenger, and handles much of your marketing. Alternatively, IBM’s Watson is powering more sophisticated AI for enterprise level retailers.

 

Final Word

 

We are just starting to see the beginning of using AI for commerce, but it is already proving to be valuable for retailers and consumers alike. Going forward it will be interesting to see the types of innovative bots that retailers start using and which aspects of commerce benefit most from AI. For instance, in the future bots may become more proactive rather than reactive, letting you know that the grocery store is having a promotion for the dish soap that’s on your shopping list or telling you that fastest route to the store based on traffic and road conditions.