Hottest Trend in Retail – Chatbots 

Chatbots are easily the hottest retail trend of 2017 and 2018 seems to be no different. But before we emphasize on this, let us understand what exactly is a chatbot? A chatbot is a computer program that simulates human conversation with the help of Artificial Intelligence. It uses Natural Language Processing and Natural Language Understanding to understand the user’s intent, breaks it further using business logic and processes the desired output. Chatbots are broadly of two types:

  1. Simple/Decision Tree Chatbots: These bots are not intelligent and are very limited. They can only respond to very specific commands. If you say the wrong thing, it doesn’t know what you mean. This bot is only as smart as it is programmed to be. They are a text based version of the more popular (and less efficient) phone trees that most of the companies have (call centers, IVRs).
  2. Intelligent/AI Chatbots: These bots have an artificial brain and you do not have to be ridiculously specific when you are talking to it. It understands language, not just commands, thanks to NLP and NLU. This bot continuously gets smarter as it learns from conversations it has with people.

 

But why make a bot? Sure, it looks cool, it’s using some super advanced technology but why should someone spend their time and energy on it?

Great question. I’ll tell you why people care about chatbots. It’s because for the first time ever people are using messenger apps more than they are using social networks. The monthly active users on these messaging platforms have already breached 3 billion mark. Messaging apps are the platforms of the future and bots will be how their users access all sorts of services.

So, logically, if you want to build (or maintain) a business online, you want to build where the people are. That place is now inside the messenger apps.

Bots are created with a purpose. A store will likely want to create a bot that helps you purchase something, a utility company will want to create a bot that can answer customer support questions.

 

Bots and Retail Industry

Everyone shops on the web nowadays. Whether you are looking for new shoes, a new game, or a piece of art; there is a place on the web for you to buy. On one hand, we have e-commerce websites offering everything you can think of, in massive inventories. On the other hand, we have millennials slowly but surely becoming the bigger buying force of our society.

The phenomenal growth of online retailers, such as Amazon, eBay, Flipkart and others has set the service experience expectations quite high. Customers want real-time access to retailers regardless of their location and what device they are using. Delivering great customer service experience is a competitive differentiator, where 90% of consumers now expect a brand or organization to offer self-service customer support. What’s more, customers expect to be able to communicate with self-service interfaces in a natural, conversational way.

Conversational retail on digital platforms can do wonders by providing instantaneous solutions to customer queries. It can quickly learn consumer tastes and preferences and show only relevant products, increasing the conversion rates. With the help of intelligent design, a consumer can be notified of a special offer or a new collection or an event, based on their locations.

Some of the ways in which chatbots can add value:

  • Conversational platform to make purchases, returns
  • Provide real-time, relevant offers and advice from a personal shopper
  • Learn customer’s tastes and preferences and send customized offers
  • Push location based offers, news and event information
  • Give updates on in-store inventory for purchase and pick-up
  • Create omnichannel service experience – text, email, mobile app, website, call center, or at a storefrontChatbots are easily the hottest retail trend of 2017 and 2018 seems to be no different. But before we emphasize on this, let us understand what exactly is a chatbot? A chatbot is a computer program that simulates human conversation with the help of Artificial Intelligence. It uses Natural Language Processing and Natural Language Understanding to understand the user’s intent, breaks it further using business logic and processes the desired output. Chatbots are broadly of two types:
    1. Simple/Decision Tree Chatbots: These bots are not intelligent and are very limited. They can only respond to very specific commands. If you say the wrong thing, it doesn’t know what you mean. This bot is only as smart as it is programmed to be. They are a text based version of the more popular (and less efficient) phone trees that most of the companies have (call centers, IVRs).
    2. Intelligent/AI Chatbots: These bots have an artificial brain and you do not have to be ridiculously specific when you are talking to it. It understands language, not just commands, thanks to NLP and NLU. This bot continuously gets smarter as it learns from conversations it has with people.

     

    But why make a bot? Sure, it looks cool, it’s using some super advanced technology but why should someone spend their time and energy on it?

    Great question. I’ll tell you why people care about chatbots. It’s because for the first time ever people are using messenger apps more than they are using social networks. The monthly active users on these messaging platforms have already breached 3 billion mark. Messaging apps are the platforms of the future and bots will be how their users access all sorts of services.

    So, logically, if you want to build (or maintain) a business online, you want to build where the people are. That place is now inside the messenger apps.

    Bots are created with a purpose. A store will likely want to create a bot that helps you purchase something, a utility company will want to create a bot that can answer customer support questions.

     

    Bots and Retail Industry

    Everyone shops on the web nowadays. Whether you are looking for new shoes, a new game, or a piece of art; there is a place on the web for you to buy. On one hand, we have e-commerce websites offering everything you can think of, in massive inventories. On the other hand, we have millennials slowly but surely becoming the bigger buying force of our society.

    The phenomenal growth of online retailers, such as Amazon, eBay, Flipkart and others has set the service experience expectations quite high. Customers want real-time access to retailers regardless of their location and what device they are using. Delivering great customer service experience is a competitive differentiator, where 90% of consumers now expect a brand or organization to offer self-service customer support. What’s more, customers expect to be able to communicate with self-service interfaces in a natural, conversational way.

    Conversational retail on digital platforms can do wonders by providing instantaneous solutions to customer queries. It can quickly learn consumer tastes and preferences and show only relevant products, increasing the conversion rates. With the help of intelligent design, a consumer can be notified of a special offer or a new collection or an event, based on their locations.

    Some of the ways in which chatbots can add value:

    • Conversational platform to make purchases, returns
    • Provide real-time, relevant offers and advice from a personal shopper
    • Learn customer’s tastes and preferences and send customized offers
    • Push location based offers, news and event information
    • Give updates on in-store inventory for purchase and pick-up
    • Create omnichannel service experience – text, email, mobile app, website, call center, or at a storefront

Conclusion

It is without doubt chatbots are revolutionizing the way businesses carry out operations. An evident advantage of chatbots to businesses in the Retail Industry is the improvement of operations, improved customer service as well as reduction of operational costs. For instance, chatbots contribute to saving on customer support services by at least 30 percent.

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