How to Leverage Sales for the Holidays Using Chatbots

There is an age-old question that’s been bothering retailers since the dawn of commerce, how to interact as meaningfully as possible with as many customers as feasible. The issue has become a sort of “squaring the circle” problem, but the contemporary technology in the form of chatbots promises to bridge the gap between desires and possibilities. As the end of the year makes everyone think of the holiday season of giving, it is only fitting to examine if chatbots can become the gift that keeps on giving for your retail business.

A Year of the Chatbot 

For starters, a textbook definition is in order: chatbot is a service or program that human users converse with by means of chat interface, with conversation made possible through the use of underlying artificial intelligence technology. This service resides in various messaging applications (such as Facebook Messenger, WhatsApp, WeChat, Kik), live chat and email platforms and it prides itself on being able to have meaningful conversations with the user, either via text (more common) or audio.

Based on this, chatbots are further divided into two categories: virtual assistants such as Alexa, Google Assistant and Cortana who utilize machine learning and AI to improve themselves over time, and the aforementioned messaging apps that have carved a niche for themselves in the role of virtual 24/h customer support.

Tireless Conversationalist

Yet, this segment can hardly be considered a “niche” in 2017, with major brands such as Uber, CNN, and H&M having already adopted chatbots, and more than 80% of companies planning to follow in their footsteps by 2020.

And conversation does seem to be the name of the game here, with 9 out of 10 customers wanting to be able to converse with brands directly via messaging, demanding their attention as part of the global push at improving customer experience by going personal.

These developments made it easier for chatbots to “sneak” into the retail sector in which customer experience often hangs on how the customers perceive the effort companies put in establishing a meaningful communication with them. Enter chatbots, which perceive no question as wrong, never tire or sleep, and even strive to perfect themselves while demanding no overtime pay. A world of tomorrow, today?

Permanent Customer Engagement

For retailers at least, this “tomorrow” cannot come soon enough, as the time of holiday sales and infamous Black Friday nears closer. This seems to be the most appropriate time to test chatbots as virtual sales assistants on the front line of customer engagement. Without the need for cloning either you or your employees, chatbots allow you to engage unprecedented numbers of buyers at any time, day or night.

Last year, this ability was tested by fashion giants H&M, which introduced its chatbot on Kik, and The North Face. The chatbot engages customers with questions about their age, style and preferences, while giving them insight into the manufacturer’s catalogue of products. These conversations were usually followed by consumer’s referral to a specific product page, or sharing the finding with their friends. Similarly, chatbots can be included in group conversations without a hitch, as well as communication between other bots.

In addition to this, just like money, chatbots never sleep and are easily configured to take the role of after-hour sales support in absence of human resources.

The North Face is another brand that's employed chatbots

The North Face is another brand that’s employed chatbots [Image Credit: Screenshot]

Who’s Afraid of Holiday Sales?

In addition to streamlining shopping, chatbots are now configured to enable them to handle other frequent inquiries by the customers, particularly those related to shipping of products and their returns. This will be a huge thing for hectic holiday shopping times when the retailers are usually swamped by requests of this type, thus reducing the level of friction and stress between users and sellers. Even today, the current model of engaging customers via chatbots is well-accepted, despite its relative novelty. At least 37 percent of Americans expressed their willingness to conduct shopping through chatbots, while numbers go even higher if we move onto millennial demographics, with the percentage going to almost 70 percent of those ready to purchase products and services.

All of these point to a rather bright future for chatbot technology in the retail segment, as its adoption in the future will be driven by generational shifts in the usage and perception of digital commerce technology.

Shopping Personalization: No Customer Left Behind

Yet, it would be unwise to count on chatbots’ success based on demographical changes alone, as this technology will have to follow in the wake of customers by constantly evolving itself. The role of AI in the evolution of chatbots’ ability to learn and improve themselves will be their defining quality in the future, as it will allow them to “sense” the shoppers’ needs, approach them thoughtfully, and, most importantly, handle their demands in lightning quick manner.

This process has to go hand in hand with the general drive to offer a more personalized experience to the customer. Having successfully passed the test of acting as shopping assistants, they quickly assumed the role of a personal concierge to your average shopper, taking their customer experience to new, sky-high levels.

Based on how the customers’ interacts, chatbots are providing them with proactive shopping suggestions. This means going beyond just giving them insight into best selling products, as chatbots utilize shoppers’ earlier buying history to come up with the best personalized recommendations.

In the context of the holiday season, chatbots can be a versatile solution for retailers that want to personalize their gift guides down to the level of every single customer. Retailers are increasingly aware that buyers need their help the most at this time of the year, and one of the forerunners in this regard was American department store giant, Nordstrom. Having recognized the demand for this level of personalization in a shopping experience during holidays, it offered its customer a chatbot focused on helping them find most suitable Christmas presents for themselves and their loved ones.

Finally, the circle will be complete once the users become convinced that they can allow chatbots to handle their payments, which is already taking shape.

messaging surpassing social network apps

With messaging surpassing social network apps, retailers will look to take advantage through chatbots [Source: BI Intelligence]

Conclusion

With 2016 having been the year of chatbots’ introduction to the mainstream, and 2017 edging towards the dreaded holiday sales season, it is only fitting to examine what chatbots can offer to retail business. With the chatbot tools becoming increasingly user-friendly and predictions for chatbot adoption looking bright, modern retailers can hardly allow themselves to ignore this tech. Virtual customer assistance around the clock, personalization of the shopping experience for users and emerging ability to handle buyer’s payments will pave the way for chatbots on their path of becoming one of cornerstones of customer experience in the future.

 

Lihi Pinto Fryman

Lihi is the CMO and one of the co-founders of Syte. She is passionate about inspiring positive experiences through creative ideation.

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