Implementing a new technology can be a daunting task that requires money, resources, and time. Not to mention full confidence in the technology and solutions you’re investing in. Lately, we’ve been hearing constant talk about chatbots and conversational commerce in the retail industry. The question is, can chatbots replace customer service reps?
Retailers are constantly looking for more innovative ways to delight customers and disrupt the shopping experience. There’s plenty of noise in the retail industry about new and emerging technologies that are intelligent, sophisticated, and provide real value to the end user, at least that’s what is promised. Let’s dive into what chatbots are, how they’re being used in retail, and how close they are today to replacing customer service agents.
What are chatbots and how do they work?
Imagine logging onto your Facebook to check out what’s going on in your news feed. You want to order flowers for someone special, so you contact the flower company via Facebook Messenger. Within the messenger app, you ask for the flower delivery service. The messenger replies with a few basic questions (occasion, size, type, etc.) Once you figure out what kind of flowers you want to purchase, the messenger responds with a calendar option to select a delivery date, then enter an address, and instantly checkout, all within Facebook messenger. This is just one example of a chatbot.
A chatbot, according to Chatbots Magazine, is defined as “a service, powered by rules and sometimes artificial intelligence, that you interact with via a chat interface. The service could be any number of things, ranging from functional to fun, and it could live in any major chat product (Facebook Messenger, Slack, Telegram, Text Messages, etc.).”
Chatbots also specialize in providing advice on a certain matter and assistance with any issues. While your website’s FAQ page has valuable information, chatbots deliver a digital engagement with a human touch. Chatbots can immediately answer customers’ questions, address their concerns, and even help with personalized recommendations and solutions. From a retail perspective, chatbots serve the purpose of purchasing products from within a single channel.
A chatbot functions based on either rules or machine learning algorithms. A chatbot that is based on rules (referred to also as heuristics) is very limited and can only respond to very specific commands because it’s programmed that way. Conversely, a chatbot that is powered by machine learning and AI can “understand” natural languages, not just commands.
However, some scientists have speculated if machine learning and AI can actually be as intelligent as humans and have come up with the Turing test. According to Chatbots Magazine, the Turing test “is a test to check the presence of mind, or thought, or intelligence in a machine.” If the machine can act like a human and make the end user believe it is a human, the machine passes the test. Therefore, if chatbots act like humans, the customer will think they’re speaking to a human customer service agent.
Chatbots cannot imitate human level intelligence and behavior at its entirety. The ideal chatbot should have “memory, can learn over time and answer smartly or in short, must posses some sort of intelligence,” says Chatbot Magazine. However, while we see chatbots getting ever so close to passing the Turing test today, it is believed that by 2029 bots will pass the Turing test and that talking to one will become virtually indistinguishable from talking to a human being.
Brands (and customers) are crazy about chatbots
Chatbots have already reshaped today’s online experiences from B2B to B2C customer interactions. As part of an omnichannel journey, brands want to reach their customers at every touchpoint, consistently.
From a retail perspective, chatbots implement an end to end channel of their own, addressing the entire customer journey from product awareness to completing a purchase. Examples of such chatbots are already out there today. A retailer can have Facebook Messenger integrated into the customer shopping experience, they can automatically send information to a customer regarding their orders, such as shipping and delivery notifications, resolve any possible issues, and interact with customers in real time. In addition, retailers can use chatbots to offer a personal stylist to personalize product recommendations. The example below shows how H&M is using their store bot platform, Kik, to get to know their customers better by asking introductory and style specific questions and providing recommended products.
According to a survey by Helpshift, an AI powered conversational platform, customers want chatbots to improve the customer service experience. More specifically, they want the customer service experience to speed up.
Chatbots are used in other forms of business besides ecommerce and customer service.
Last year, National Geographic launched the Genius bot, a Facebook Messenger chatbot to promote their new show about Albert Einstein’s work and personal life.
“Rather than having the campaign speak for Einstein, we wanted Einstein to speak for himself,” said Layne Harris, VP and Head of Innovation Technology at 360i, said to GeoMarketing. “We decided to pursue a conversational chatbot that would feel natural and speak as Einstein would. This provides a more intimate and immersive experience for users to really connect with him one on one and organically discover more content from the show.”
Chatbots will work alongside customer service agents
Chatbots, also known as robots you can talk to, may not replace customer service reps today, but can work alongside them to make the customer experience flow more consistently and quickly. Generally, chatbots are recognized as text message conversations.
Dave Barrowman, head of innovation at Skava, believes that chatbots will replace interactive voice responses (IVR), an automated phone system that interacts with callers and gathers basic information before the caller is routed to a human agent.
Shoppers reach out to customer support for a number of things, such as order status, return policy, and discount applicability, to name a few. By replacing IVR’s with chatbots, you will be streamlining the customer support experience, making it faster and less painful for the customer to receive support. In addition, your customer service agents will have more time to handle and resolve more complex situations, such as promotional policies.
“If you can handle 50-60% of your calls for more common situations and scenarios through a chatbot, you can pass over the more challenging requests and scenarios to a human faster,” says Barrowman. “If these human customer service agents are doing something simple for somebody else, they’re not handling the complex scenarios [sooner] and it takes time away from resolving those challenging situations. I think that is the key.”
Alibaba, for example, is using robots, automation, AI, and machine learning in all aspects of shopping for Singles’ Day and other special events. From product selection to delivery, Alibaba’s shopping portal will guide and recommend shoppers what to purchase. An AI-powered customer service chatbot is one of the tools that Alibaba is using to make shopping more efficient. The chatbot, Dan Xiaomi, is not replacing customer service agents, but provides further assistance during peak traffic times, such as Single’s Day.
As a trending, new technology, chatbots will become the norm for many businesses: retail, B2B, healthcare, and more. Chatbots may not replace customer service agents today, but will work alongside with them, similarly to Alibaba’s approach.
Ultimately, chatbots should be able to deliver consistent customer service, regardless of who is calling, or time of day. Whether you’re integrating messaging apps into your existing ecommerce platform, or building your own chatbot in-house using a microservices-based architecture, chatbots can work wonders for both brands and customers alike.