What Retailers Need to Consider Before Using Chatbots
The retail industry has never been as competitive — or as fragmented — as it is today. With consumers’ attention increasingly being split between multiple channels, retailers are in need of new ways to reach shoppers wherever they are. However, it’s not enough to reach a shopper in the right channel with any message.
Retailers need to hit them with the right message. Thanks to big data, artificial intelligence (AI) and predictive analytics, as well as the proliferation of messaging apps, retailers finally have the tools to do just that.
This "perfect storm" of technology and messaging adoption has brought about a new category in retail technology known as “conversational commerce,” a term coined by Uber's Chris Messina, referring to the intersection of messaging apps and shopping. Conversational commerce platforms, such as Facebook, are releasing commerce-related bots and extensions to meet shoppers in new channels and in new ways.
1-800-Flowers.com Sees Early Success With Facebook Messenger
Earlier this year, Facebook made headlines when it announced that chatbots could now integrate directly with a company’s Facebook page. These automated programs play a similar role to customer service reps, and are designed to make it easier for brands to engage with customers through Facebook Messenger.
By leveraging AI, retail brands can use machines — not humans — to carry on conversations with shoppers. Most bot-based conversations with retailers and brands center around clienteling or customer service. For example, one of Facebook’s chatbot partners at the time of the launch was 1-800-Flowers.com. Customers no longer need to call or even visit the retailer’s site to send flowers. Everything can be done through a simple Facebook chat session — with a machine.
In the first two months after introducing its Facebook chatbot, 1-800-Flowers.com reported that more than 70 percent of its Messenger orders were from new customers. These new customers also skewed younger than the company’s typical shopper, as they were already familiar with the Facebook Messenger app.
Is Messenger Right for Your Brand?
This early success is a great sign for the retail community. According to eMarketer, there are a lot of retailers that are very interested in using conversational commerce, but they’re waiting on the sidelines for more use cases before taking the plunge. If you're considering a chatbot strategy, I’d encourage you to think about the following:
- Is this on-brand? Chatbots make sense for many brands, but may not for others. While some luxury retailers like Louis Vuitton have already started experimenting with AI-powered bots, others may feel too protective of their brand to hand what's supposed to be a bespoke experience over to a machine. It’s important to ask yourself whether you can augment that well-crafted, in-store experience with an app like Facebook Messenger, providing advice and inspiration to shoppers in a channel where they're already spending so much of their time.
- Is this where my customers really are? If you're considering using Facebook chatbots specifically, be sure this is really where your customers are spending their time. While Facebook may be popular in the U.S., consumers in other countries are more inclined to use other messaging platforms, including Whatsapp, Viber, Line and WeChat. Before setting down one path, do your due diligence to ensure that your efforts will be worth the time and resources required.
The advancements in AI mean bots can now have engaging and human-like conversations with shoppers, which could have a serious impact on a retailer’s bottom line in the years to come. However, there's no one-size-fits-all approach to chatbots, so make sure your bot strategy truly aligns with both your brand and its customers.
Craig Alberino is the CEO of Grey Jean Technologies, an AI-powered personalization company that provides retailers with accurate predictions of consumer behavior.