Analysis5 Ways Chatbots Are Already Revolutionizing E-Commerce

5 Ways Chatbots Are Already Revolutionizing E-Commerce

Since the introduction of Apple’s Siri in 2011, AI and marketing strategy have merged to introduce chatbots.

Designed to emulate a ‘human’ customer service experience, chatbots are revolutionizing how modern branding and sales are approached.

With more industries joining this innovative form of automated publicity by developing their own bots, advertisers are scrambling to keep up with the pace in which marketing strategies adapt to this innovative technology.

As consumer familiarity with the chatbot and AI technologies increase, so does the expectation that the majority of their consumer experiences will be follow this trend.

Christie Pitts, a manager with Verizon Ventures, weighs in on why her company is an active investor in this unique market:

“Messaging has become a huge component of how we interact with our devices, and how we stay connected with the people, businesses and the day-to-day activities of life. Chatbots bring commerce into this part of our lives, and will open up new opportunities.”

What Is A Chatbot?

It’s likely you’ve already used one and didn’t even realize it. Developed to simplify the consumer experience, chatbots are conversational computer programs customers can interact with through a messaging interface.

While Siri was the first to reach consumers on a global level, the infinite uses of this technology makes it an indispensable tool for any industry.

So how can you use chatbots to increase marketing reach and customer satisfaction? Here are five ways how chatbots are changing consumer behavior:

1.) Simplifying The User Experience

Here’s an example: Rachel, a 25 year old millennial and self-proclaimed, ‘beauty addict’ recently downloaded Sephora’s app, which recently incorporated its own chatbot via the Kik messaging interface.

After uploading a selfie, Rachel ‘tries on’ different lipstick colours without ever leaving the comfort of her apartment.

After deciding on a colour she likes, the intuitive bot suggests complementary eye shadow and blush, a potential add-on to Rachel’s overall purchase.

After completing the sale, Rachel is given the option to view makeup tutorials, yet another opportunity to make a sale.

Whereas Rachel would have entered Sephora and sampled the items she was interested in, the chatbot interaction significantly reduced her time investment.

She was able to enter the virtual store and interact with the bot to simplify her search, as well as receive recommendations on additional products.

As millennials like Rachel are expected to make up at least 35% of consumer purchases by 2030. This generation of consumers is most comfortable with online shopping and messaging as a form of communication.

Aside from simplifying the consumer experience, the benefits of incorporating the chatbot into every business plan falls in the lap of the industry as well. According to BI Intelligence, the use of chatbots can save a company up to 30% in customer support service fees annually.

Unlike customer service agents, chatbots are always on, feeding into the ever-increasing desire of consumers for engagement.

In addition, traditional customer service agents represent a major expense; without the expense of onboarding, training and paying hourly wages, the use of the chatbot frees up management to invest in future design and marketing plans.

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2.) Branded Skills

With the introduction of Amazon’s Echo, Alexa and Dot, as well as Google Home, AI technology is entering homes at a pace most marketers didn’t anticipate.

As these ‘additions to the family’ connect to other technologies around the house and adapt to consumer habits, each interaction will be seen as an opportunity to suggest potential product and service add-ons.

One example of this integration is LG’s SmartThinQ home automation hub, which works with Alexa to determine how much detergent you use, and order more when you’re running low.

The incorporation of chatbots into home appliances is already being tested in numerous markets. Run out of milk or other regularly-purchased items?

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The refrigerator will recognize this and have the capability to order more without the consumer lifting a finger. Maybe the consumer wants to listen to the latest album by their favorite artist.

With chatbot and AI technology recording usage history and other data, Alexa will remember for them.

3.) Identifying Consumer Habits

The chatbot revolution not only enhances the consumer experience, it picks up a goldmine of data along the way.

The unassuming bot feeds the consumer a litany of questions, learning the habits and purchasing history of each interaction in order to present personalized experiences with every tap of the finger.

For the advertising industry, this history feeds into the trajectory of how and what we respond to most, as well as what keeps us returning.

Chatbots are able to aggregate precious consumer data, adapting each response in order to suggest additional purchases or services. This data can then be used to present relevant advertising opportunities.

For example, after purchasing movie tickets through the Fandango chatbot, a consumer might then be presented with nearby dining options.

Facebook’s messenger bot then springs into action, suggesting the appropriate time for an Uber to pick the consumer up in time to make it to the film, and subsequently scheduling the Uber.

4.) Providing Concierge Service With Luxury Brands

Fashion brands are extending their high-level service to chatbots, making it even easier for their customers to get whatever they want when they want.

Tommy Hilfiger and Burberry have made it possible to preview their upcoming lines through chatbot usage. Loyal clientele can watch fashion shows, select items they want and advance purchase them from their smartphones.

Or, if the consumer prefers, they can easily locate the nearest store, view the store hours and book a car service to take them there.

In addition, the Burberry bot offers customers the option of starting a live chat with a fashion consultant, maintaining their concierge service, while adapting to the latest marketing strategies.

Tommy Hilfiger recently paired up with A-list model, Gigi Hadid, on a fashion line. Users of the bot can view the entire collection (modelled by Hadid), go behind the scenes to their design sessions, and purchase the pieces.

The bot gathers data about the consumer, including style preferences and shopping habits, in order to present relevant content in future purchases.

This brilliant use of influencer marketing is a small hint of future trends within the chatbot community. Influencers will be incorporated as chatbot personalities, assimilating to the user’s style and preferences, and encouraging them to return for similar shopping experiences.

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5.) Lifestyle Management

Chatbots are ubiquitous when it comes to lifestyle preferences. Consumers can rely on bots for everyday assistance, such as grocery shopping to providing daily wisdom for inspiration.

Within this innocent foray into simplifying the everyday habits of consumers lies every marketer’s dream: organically incorporating sales and culling data with every benefit offered.

Does the consumer get excited about receiving daily ‘wisdom’ from Facebook messenger’s Stoicbot? Maybe they would like to try a free 7-day meditation practice.

Do they shop at Whole Foods? The Whole Foods bot is ready to offer any type of recipe based on user preference, as well as deliver the ingredients right to your home.

Fans of healthy living are able to utilise numerous chatbots to order food, receive daily inspiration or meditation mantras, or even quickly check any health issues they might have.

HealthTap and Your.MD are the chatbot equivalent of WebMD. These bots can help consumers to ‘self diagnose’ anything under the sun.

Though most with health concerns end up making a doctor’s visit anyway, the use of this chatbot can easily provide you with home delivery options for potential cures.

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When the consumer doesn’t feel like making a trip to the local pharmacy for their over the counter medications, HealthTap’s bot will order it for you.

Banks are falling in line with the chatbot experience as well. Bank of America’s chatbot, which is available through Facebook Messenger, Slack, WhatsApp and SMS, offers a variety of functionality, including access to account data, the ability to perform transactions and real-time alerts.

Other banks and major credit card companies are following suit, providing their customers with the ease of chatbot use, combines with live support options.

The Future Of Commerce Is Now

The e-commerce landscape is already changing with the adoption of chatbots. Forward-thinking brands are using chatbots to improve customer service, provide faster responses, gather more data about their customers, and overall creating a more enjoyable shopper experience.

Chatbots have additional marketing benefits for e-commerce websites, such as improving conversions and search engine rankings. If you have not yet experimented with chatbots, now is the time to start.


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