HOW CHATBOT TECHNOLOGY CAN TRANSFORM THE HOLIDAY SHOPPING EXPERIENCE

11/03/2017 04:39 pm ET

For any retailer, brand or shopper, The last two months of the year are the most important: the holiday shopping season! While all retailers expect the lion’s share of their annual sales to occur in this period - both in store and online - the shifting landscape has forced retailers to consider new strategies, including online sales, digital ads, and now, chatbots.

In the past 5 years, e-commerce has become increasingly significant in the holiday shopping mix. The National Retail Federation estimates holiday sales will hit nearly $656 billion in 2017, with $117 billion in "non-store sales," which includes e-commerce activity. And 30% of that activity comes from mobile devices. The problem is, there’s a mobile gap. A majority of American shoppers spend more time online on a mobile device than they do on a desktop or laptop computer. Nonetheless, many more transactions occur on desktop.

Why? Because too many online stores don’t provide a good mobile shopping experience. Enterprise retailers like Amazon, and millennial-oriented startups are the first to make mobile commerce work by leveraging artificial intelligence (AI) and chatbot technology to improve shoppers’ experiences with services including mobile concierges, personalized product recommendations, and even customer service requests.

Chatbots and Artificial Intelligence (AI) technology have gained significant influence and popularity over the past year, thanks to launches by Amazon, Facebook Messenger, and Kik. This has propelled programmers to develop highly intelligent solutions for problems in the retail industry-- especially challenges faced when dealing with increased shopping volumes that human-based technology is unable to handle. Some of these issues include:

Customer Experience Personalization – Tailoring experiences to individual customers has been a major interest for many retailers. Artificial intelligence can be used to manage data silos (loyalty programs, sales, responses to promotions, etc.) that a consumer has participated in during the year to provide a truly personalized holiday shopping experience. Customers respond to data in different ways, for instance, some customers respond better to batch promotions like pamphlets received in the mail or e-mail promotions, while other customers respond better to real-time promotions like point-of-sale discounts. Applying deep learning technologies to channel this learned behavior into forecasts can create a simpler and smoother holiday shopping experience for the customer. We see the implementation of this type of technology on e-commerce websites like Amazon, where customers are matched to products and predictions are made from their shopping style and profile information. Also, with artificial intelligence technology in chatbots, consumers can easily be matched with the right item through filters or quizzes. This is highly convenient for a shopper, given that it is less time consuming to take a brief quiz than to go to a store and explain what they want to a sales associate.

Customer Service Requests – Customers’ expectations are intensifying by the minute, and they continue to expect knowledgeable employees, easy navigation of both online and brick-and-mortar stores, secure payments, quick deliveries and many more. The holiday season is no exception to this, and with the high volumes of orders, mistakes are inevitable. The truth is, human employees are not always readily equipped to handle every meticulous issue--but with the right data backing and integration, chatbots can provide the same services quickly and error-free, only bringing in a human when the information requested isn’t available or a conflict arises. This will cut down the time spent waiting for a representative when sourcing easy information about shipping, tracking numbers or even forgotten passwords. Utilizing chatbots in the business workflow for customer service can save up to 30% in customer support services, according to BI Intelligence research conducted by The Chatbots Explainer in 2016. We see the implementation of these kinds of solutions when chatbots offer personal stylist services and carry human-like conversations on site and through social channels including Facebook Messenger, while utilizing artificial intelligence to select the right merchandise tailored to a customer’s style. It is also implemented in Amazon’s return and replace feature for damaged items or unsatisfying purchases. This kind of technology will ultimately change the dynamic of customer service issues during peak shopping seasons.

Artificial intelligence (AI) is making us live smarter and the retail industry is also tapping into this. According to the third quarterly “2017 E-commerce Performance Index,” a report from SLI Systems, 54% of companies reported they are using or plan to add AI technologies like those pointed out above in the future. The largest group of these respondents (20%) expect to add AI within the next 12 months. The question is, when are you getting in on it?

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