COVID-19 Has Given Rise to Mass Chatbot Adoption in the Retail Space

The pandemic has reshaped the way people work, study, shop — and that’s just scratching the surface. With more consumers relying on virtual resources for everyday things, their expectations of the businesses they frequent have changed. When online, people want user-friendly, self-service options to solve issues, gather information, process returns, schedule services, and more. This has accelerated the adoption of customer service chatbots, especially in the retail and e-commerce space.

The momentum for such chatbot solutions and services is only expected to rise. According to Reportlinker.com, the global chatbot market size is expected to grow from $2.9 billion in 2020 to over $10.5 billion by 2026. Here’s a look at how we got here and why retailers should embrace the benefits of next-gen chatbots.

Customer Support Teams Felt the Immediate Effects of COVID-19

Every sector has felt the pandemic’s impacts. For customer service, it meant the overnight shuttering of many in-person call centers, which drove companies to invest in new technologies to provide additional support and allow workers to adapt to work-from-home setups. While customer support teams navigated their workplaces being turned upside down, they also faced a surge of customer requests.

Supply chains were thrown into chaos and, simultaneously, many online services couldn’t handle the additional volumes effectively. Orders got delayed and call centers became backed up. Furthermore, an e-commerce-fueled holiday season saw teams flooded with a massive number of requests. In the U.S., online shopping for the 2020 holidays grew 32.2 percent from 2019, reaching $188.2 billion, according to Adobe Analytics. In November alone, Black Friday and Cyber Monday catapulted e-commerce sales to over $100 billion.

Increased online shopping meant retailers had more trouble looming: an uptick in returns. In fact, the hundreds of retailers using the Loop Returns platform experienced a 41 percent increase in returns of online orders for the 2020 holiday season, according to data from over 1 million returns from Nov. 30, 2020 to Jan. 20, 2021.

To complicate matters further, companies across the board were faced with the issue of having agents miss work unpredictably, at a moment’s notice. The already costly and labor-intensive process of hiring, onboarding and ensuring new employees were up to speed became even more problematic than usual.

Looking to mitigate these issues and ensure their businesses continue to provide amazing service to their customers' needs, retailers have increasingly turned to intelligent chatbots.

Retailers Are Already Utilizing Next-Generation Chatbots

Retailers and customer service teams have done their best to support their customers and adapt throughout the pandemic. Yet, 75 percent of respondents in a survey on pandemic customer service led by NBC and Telemundo said their service experiences had worsened, citing an inability to connect with agents, emails going unanswered, and it taking multiple attempts to address a single question or issue. Those retailers and e-commerce businesses that invested in next-gen chatbots found ways to overcome these challenges.

Chatbots provide customers with 24/7 support and the ability to address queries from an interface on a company website, mobile app, or even from company-owned social network accounts like Facebook Messenger or What’sApp. Through chatbots, consumers can get answers about shipping and returns, access product instructions, change their subscriptions, and even get help making purchases. Their queries have varying levels of complexity — and each one a chatbot handles or eventually hands-off to the support team frees up precious time from customer support agents, who can then focus on the more complicated issues that would be better served by a real, human agent.

A recent consumer survey on the state of chatbots found that retail customers are among the most impatient consumers. Rather than wait for an extended time for a live agent, 55 percent of respondents said they give up within 10 minutes, while 17 percent said they won’t even wait five minutes for an agent. For retailers, this means moving quickly or risk losing consumers to long wait times.

Another reason retailers have turned to chatbots is the use of natural language processing (NLP), which enables the chatbot to understand the true intent behind customer questions no matter how they're phrased in a chat. For example, if a customer uses a chatbot from an e-commerce site through which they log into their account, chatbots can access their individualized purchase history and past interactions, provide personalized recommendations, and correctly route user inquiries based on either the customer or the type of question being asked. It’s another way chatbots can provide truly personalized service and customers receive specific and relevant support.

Consumers Are More Comfortable Using Technology for Everyday Tasks

From Zoom birthday parties, game nights, and company happy hours to online kindergarten, graduation ceremonies, speech therapy sessions and doctors’ appointments, to app-based grocery shopping and food delivery services, people worldwide embraced digital life in 2020. The result is that consumers have become more digitally literate and are now increasingly willing to use technologies like chatbots than they have been in the past.

Coupled with the growing prevalence and quality level of intelligent chatbots on leading websites, a massive 80 percent of respondents in a recent chatbot-centered survey said they actually preferred to use a chatbot vs. other options when one was offered to them. Moreover, in the retail space, 58 percent of chatbot users report using the same chatbot on more than one occasion, which goes to show that intelligent self-serviceable solutions can save consumers time and drive repeat engagement and/or purchases.

There’s no doubt consumer behaviors have shifted. The culmination of events this past year and a half, and willingness of consumers to embrace new technologies, presents an ideal environment for retail and e-commerce companies to adopt a chatbot that can help consumers easily obtain answers to their questions.

Next-gen chatbots are at the heart of fulfilling consumer needs and giving retailers a competitive edge in the market. It’s a simple fact: Chatbots have become ubiquitous and they aren’t going anywhere. If your business isn’t riding the chatbot wave to better service your customers, now is the time to embrace this staple of customer support.

Bob Grohs is the director of marketing at Solvvy, the next-gen chatbot and automation platform.