AI chatbots have grown to become a must-have tool for eCommerce businesses, capable of supporting consumers through their buyer journey from start to finish. In this article, we explore how AI chatbots are used to transform consumer engagement with use cases and examples, and how this benefits online retailers.
What are eCommerce chatbots?
AI chatbots are computer programmes that are capable of simulating human conversations. The interaction between a chatbot and a user is automated and chatbot responses are based on a set of predefined triggers and events. They are able to communicate with users in a way that feels natural, as if speaking to a real human.
For example, a consumer may have a question about a product's specifications and suitable, or they may want to check availability, delivery and returns or gift wrapping options.
In all cases, a chatbot can swiftly respond to the query by providing an answer or pointing the consumer in the right direction. This could include providing contact details for a particular department, immediately connecting them with an advisor or directing them to an area of the website.
As we’ll learn in this article, the ways in which an AI chatbot for ecommerce can be used doesn’t end here. There are numerous things they can do to assist consumers and businesses, from handling everyday tasks to facilitating wider strategic campaigns.
3 types of AI chatbots in eCommerce
There are three types of chatbots that retailers use and each can handle tasks slightly differently. The most suitable option will depend on how you want to integrate chatbots into your business.
1. Simple chatbots
Simple chatbots, which are also known as rule-based chatbots, are great for handling very specific tasks. This could include answering predetermined questions or communicating with users on a multiple choice basis.
For example, a simple AI chatbot can guide a user through a selection of options when placing an order online or through an app. Or another common way a simple chatbot can be used is to capture customer information, such as shipping address and order number for the purpose of providing an update on order status.
Their capabilities are limited due to the predefined nature of how they function, however, simple chatbots still offer an effective solution for ecommerce. Automatically handling customer interactions reduces the time an employee needs to spend communicating with consumers, streamlining business processes.
2. Smart chatbots
Smart chatbots are more advanced and instead of being based on predefined options, they use conversational AI to understand queries and intent. They can engage in free-flowing conversations and they are able to learn from past interactions to improve their responses.
Smart chatbots function the same way as Apple’s Siri and Amazon’s Alexa, with both capable of listening, understanding and responding to unique queries. They communicate in a human-like way and they can provide a relevant answer, whatever the query.
Ecommerce businesses use smart chatbots to nurture and support the customer journey. One example is how virtual shop assistants can process product questions and provide relevant product recommendations. Since communications can be automated using a smart chatbot, they reduce the need for customers to speak to sales advisers, saving precious resources.
3. Hybrid chatbots
As the name suggests, hybrid chatbots combine elements of both simple and smart chatbots, making them suitable for more complex tasks. They are set up using rule-based tasks that provide structure, however they have the ability to understand unique queries and user intent as well.
Hybrid chatbots are ideal for tailoring products and services, going beyond the predefined selection of options and altering the product to better cater to different needs.
Even though there are differences between each type of AI chatbot, what they all have in common is the ability to be customized to suit the needs of ecommerce businesses. The key is choosing the type of chatbot capable of handling what you need it to do.
7 eCommerce chatbot use cases
Let’s explore 7 ways an online retailer will benefit from using an AI chatbot for ecommerce, looking at how they work in real-time to boost consumer engagement and drive sales.
1. Collect information from customers
AI chatbots are extremely effective at collecting customer information. This could be for any purpose, however, some of the most common reasons are to tailor product recommendations, for lead generation and for post-sale support. Once information has been captured, the chatbot can personalize its response and automate tasks accordingly.
Information that gets collected can be processed by the business to provide learnings and insight into consumer behavior, which can be used to inform decision making and strategy. Users can also be entered into a sales funnel where they are nutured until they convert into a customer.
A chatbot handling customer enquiries can ask for the person's name, contact details and the product they are interested in, which provides the business with a warm lead. If a purchase doesn’t take place there and then, they can enter into an email funnel or be contacted by a sales advisor.
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A great use case is global beauty retailer, Sephora, who used a chatbot to capture the information on teenagers by building engaging quizzes. The purpose of the quiz was to learn about make-up brand preferences, enabling Sephora to then provide product recommendations and direct users to their app where they can purchase.
2. Customer support on the website
Customer support AI chatbot platforms for ecommerce can provide consumers with an employee-like experience, from answering questions to quickly and accurately servicing queries. Retailers can therefore spend less on customer support while providing an efficient, convenient and personalized service.
As well as benefiting the business, customer service chatbots can operate 24/7 and are a highly effective tool for communication, leading to a higher customer satisfaction score. They can also speed up the customer journey and help boost conversion rates.
Here are just some of the ways a customer support chatbot can assist those who make contact, answering queries on the following:
- Product sizing and specifications
- Product variants and styles
- Pricing, promotions and discounts
- Product or service recommendations
- Shipping and returns
- Collecting feedback or reviews
An example of a retailer that’s championed customer support using an AI chatbot is Luxury fashion brand Louis Vuitton. Louis Vuitton launched an advanced natural language processing (NLP) chatbot that’s able to imitate high quality customer support, to provide consumers with an experience that’s on par with what you get in-store.
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Louis Vuitton’s chatbot is able to search for products using a chosen criteria, such as product type, size and color, and locate it in the nearest store. A unique feature is the ability to share products with friends and get them to vote on their favorite. Louis Vuitton’s chatbot solution is convenient for customers and it helps Louis Vuitton maintain their excellent standard of service, something that’s a top priority for luxury retail.
3. Upsell and cross sell products on social media
Upselling and cross selling to customers has long been an effective strategy in retail. The aim is to increase the size of an order, whether it’s by selling a higher value item or recommending additional items that can be purchased as well. There are a number of techniques that facilitate upselling and cross selling and AI chatbots are one of them.
An AI chatbot for ecommerce can start a conversation with online shoppers and make recommendations, and in the process upsell and cross-sell. Let’s say a shopper enquires about a rain jacket and it’s out of stock. The chatbot is able to recommend similar products, including more expensive items whilst highlighting the benefits of the alternatives.
They can also suggest other waterproof products in an attempt to cross-sell, such as trousers or backpacks. Other product categories like footwear and t-shirts can also be recommended by the AI chatbot.
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Swedish clothing brand H&M used chatbots to upsell and cross-sell to users in a creative way. Users first answered questions on their style preferences and H&M then sent two outfit options. Engaged shoppers were able to choose their favorite outfit and purchase the products or individual items.
It’s an effective way to showcase a whole range of product categories and inspire shoppers to buy an entire outfit.
4. Abandoned cart optimization on social media
Cart abandonment costs ecommerce stores billions of dollars each year in lost revenue. Top ecommerce brands put strategies in place to re-engage those that have abandoned their carts, or prevent cart abandonment from happening in the first place.
AI chatbots can help prevent abandoned carts by popping up during the purchase process. If a user takes too long to complete a step, the chatbot can add an incentive, such as a special discount or free shipping, or they can reassure the consumer by highlighting the returns policy or simply ask if the user needs help or has any questions.
If the cart has been abandoned, a chatbot can remind the user of their shopping cart when they return to the site, or target them with chatbot messages on social media, such as Facebook Messenger.
Professional haircare brand Procosmet provides a great example of how an AI chatbot can optimize cart abandonment. Using Tidio’s lead generation and newsletter bot, they were able to give special offers to existing subscribers, an effective way to re-engage them. The AI chatbot was also able to assist consumers during the sales funnel, helping to prevent cart abandons whilst boosting customer satisfaction at the same time.
5. Order tracking and post-sale support on social media
Chatbots provide both ecommerce businesses and their customers a streamlined way to check on the status of an order and get help once a sale has been made. The main benefit to this is the speed that a chatbot is able to assist customers online, as well as the reduction of resources needed to service queries.
For customers, it avoids them having to phone customer services and speak to a representative, which can take longer and incur charges. At the same time ecommerce businesses can save on resources by reducing the number of inbound enquiries that need the assistance of a human.
An example of how chatbots can be used in this way is from skincare brand Kiehl’s. Kiehl’s uses a smart and handy Facebook Messenger chatbot, allowing shoppers to book beauty consultations, get support with product queries and complete online orders with AI generated interactions. The chatbot can also help with post-sale support and provide information on order tracking.
Check the list of AI tools for social media.
6. Customer feedback and reviews on review websites
Another great use case for an AI chatbot in ecommerce is collecting customer feedback and reviews. Consumers can easily conduct online research into a brand before making an informed purchase decision, which puts a lot of importance on collecting positive reviews. It’s a key way to increase conversion rate online as well, considering reviews can automatically show on Google search and shopping ads.
When it comes to feedback and reviews, AI chatbots can help retailers in two ways. Firstly, they can increase the number of reviews by requesting one at the end of an interaction, making it easier for users to leave one. They are an effective way to proactively increase the volume of reviews, rather than waiting for customers to leave them on their own accord.
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In addition to that, AI chatbots can help in spotting negative feedback or identifying a poor customer experience. They can then work to rectify any issues and improve the customer’s perception of the brand, which can help reduce negative reviews.
7. Answer FAQs
Frequently asked questions (FAQs) are a great place for online shoppers to find answers, whether it’s brand or product specific. They help to reduce the number of inbound enquiries and most retailers feature an FAQ page on their website.
However, an AI chatbot for ecommerce can take this one step further by integrating this functionality into conversational-style messaging. Consumers can ask questions and depending on the type of chatbot being used (simple, smart or hybrid), the responses will be able to generate relevant and helpful answers. 81% of consumers would prefer to solve problems themselves instead of contacting support, which highlights the important role FAQ pages and chatbots play in customer experience.
This is something that haircare brand Procosmet does really well, helping them to handle 68% of conversations using chatbots. Their FAQ chatbot is able to answer questions quickly and accurately, which has helped contribute to an increase in monthly lead generation and improve conversion rates.
Conclusion
Chatbot technology is continuously evolving, using the latest automation and artificial intelligence to support customer interactions going beyond what customer service teams can do. Whether you require a small scale platform or enterprise AI chatbot platform for ecommerce, there are powerful tools available that are capable of benefiting all online retailers.