How customer service chatbots are transforming retail

While chatbots in retail are no longer a new phenomenon, recent years have seen accelerated use. Now, retail brands of any size can make growth easier to achieve through the smarter deployment of chatbots for customer service.

The swift disruption of traditional business models by global turmoil has forced all industries to rethink their approach to customer service strategies. In the highly competitive retail landscape, improving the customer experience has become one of the most effective ways to attract and retain customers.

That’s where chatbots for customer service have shown their value. To improve both the customer experience (CX) and process efficiency, a customer service chatbot offers a level of personalisation that’s proving extremely effective. With consumers looking for personalised experiences, conversational AI in the form of chatbots results in interactions that mimic human interaction.

Chatbot technology is more powerful than ever, especially when it comes to retail and the customer experience. Through their use, retailers are transforming how they manage the customer journey and how they adapt to unexpected consumer trends.

The impact of chatbots on customer service in retail

A customer service chatbot is a solution for personalising customer management, leading to more effective and personalised customer experiences. It’s the key for smaller retailers to compete with the big names in retail like Amazon and eBay.

It’s easy to dismiss chatbot technology as a future trend, but that future is here right now. More than ever, retail is being managed digitally. Artificial intelligence in customer service chatbots is no longer the stuff of sci-fi. It is instead the bleeding-edge technology that empowers both brands and consumers alike.

Today, chatbots can read messages from customers, examine that customer’s shopping history, and continuously evaluate and assess that customer’s behaviour. The result is that customers are getting personalised interactions that open up opportunities for more purchases related to their real-world interests and moods. That immediacy, driven by instantly accessible data, separates a customer service chatbot from a human. 

With retail brands embracing essential digital transformation strategies, chatbots are there to improve consumer engagement across multiple platforms and in multiple languages at once. Those consumers can bounce from Facebook Messenger to WhatsApp or SMS, continuing conversations in the language of their choice without a pause.

How can customer service chatbots improve consumer engagement?

Customer engagement is essential for retail brands as it leads to improved consumer retention. Engagement makes it easier for brands to keep their customers happy, improving brand loyalty and ensuring that they are always up to date with new products and promotions. Retail brands using chatbots for customer service streamline the process of growing customer purchasing frequency while expanding audience reach. 

Of course, the primary function of chatbots in a retail environment is to elevate conversation rates and results through an enhanced customer support strategy. It’s intelligent broadcasting combined with cross-platform integration for improving conversations between the brand and the customer.

Using the most impactful chatbot best practices, those retail brands can consistently gather vast amounts of data about every customer they interact with. That data analysis can then be used to fine-tune communications, enhance insights into consumer preferences and habits, and further improve that all-important personalisation. 

Utilising the customer service chatbot

It’s easy to focus entirely on the interactivity gains provided by a customer support chatbot. But the best AI-powered chatbots can do a lot more than just that. They can support customers in breaking down their pain points, and can also be used for lead generation and an improved omnichannel communication offering. 

It’s more than just about building relationships, although that is one of the key benefits of using chatbots in 2022. It’s about using efficiency to improve those relationships through more roadblock-free engagement. Now, customers can check stock online, buy products immediately, and get upsell insights while the retailers collect the data they need to enhance future communications. The UK company Denby Pottery has a great example of this, with their chatbot opening automatically as soon as the landing page loads, offering immediate solutions and options for site visitors.

Already, chatbots are moving beyond the traditional idea of what automated communications are capable of. Now, they can offer a complete social interaction experience using domain intelligence, video, audio, and imagery. Using detailed customer profiles, interactions can be further personalised and more conversational. That means a better experience for customers, while the chatbots improve their influence and ability to make sales.

The real-world case for chatbots in retail

Looking closely at the current usage of chatbots in ecommerce and retail, many brands are already taking giant leaps with their chatbot use. By driving forward with a new digitally transformed customer experience, traditional issues such as too-fast scaling become an irrelevance. Chatbots can address the needs of multiple customers simultaneously while giving the retailers a 360° view of the entirety of a customer’s data.

This leads to hyper-personalisation, but it can do more than that. Customer service chatbots can also improve organisational security because they can receive, transmit, and utilise customers’ confidential data in an entirely secure communications channel. Boosted by cloud data access, security issues can be dramatically reduced, which again feeds into the improved CX. It’s clear that chatbots are a useful customer engagement tool that provide a wide range of advantages for retail brands of all sizes.

The risks of using chatbots for customer service

As digital technology continues to go through massive advancements, chatbots are one of the core elements of that advance. When they are aligned with the customer journey, internal tasks and external communication can be automated. The risk is that retail brands may fail to recognise that chatbots are not a permanent replacement for human interaction but an extension of it.

The retail sector is investing heavily in AI-powered automation, including the use of chatbots. By aligning the AI with communications delivered by real people, they are creating a more seamless and more memorable customer experience while solving the main problems for those customers.

So if the best chatbots make it easier to deliver a positive and memorable customer experience, how do bad chatbots affect those experiences? It’s simple: they lead to customer frustration. If those customers get trapped in a closed-loop conversation where they keep having to answer the same questions, or if they can’t get through to a human representative when they need one, then it’s likely that they will head elsewhere.

That’s why it’s important that retail companies understand the most common chatbot mistakes and actively take steps to prevent those frustrations from happening. But when deployed in the right way, the customer experience is utterly transformed and is more convenient, more positive, and more accessible. On the other end of the spectrum, outdated, clunky chatbots are the fastest way to lose customers.

Today, chatbot technology plays a bigger role in retail, from personalising the shopping experience to making it easier to communicate between clients and brands. A customer service chatbot is no longer something that’s “nice to have” for retailers. It’s an essential resource capable of boosting scalability and growing revenue.

Positioning chatbots for customer service in retail

Retailers have always had to be flexible, even more so in recent years. From changing customer trends to a global pandemic, retailers without rapid agility have collapsed into irrelevance. While there are many ways to enhance the agility of any business model, for retailers, it’s more important than ever to do so.

Artificial intelligence is one of the most essential tools for retailers to integrate into their business processes. From behavioural analytics to customer intelligence, chatbots for customer service are changing the retail landscape beyond recognition. The companies that can deliver hyper-personalised customer experiences can easily create a better, more world-class digital experience. And all while improving business processes, freeing up the human workforce so they can meaningfully engage, and creating solutions that can only benefit the customer.

You can follow the Futr blog if you’re interested in getting actionable insights into how our AI chatbots will transform the customer service experience for your organization. If you’re keen to get started on the next stage of your business growth, contact the Futr team. Sign up for a four-week trial or schedule a FREE demo of our live chat and chatbot platform and take your organisation to the next level.

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Futr is a VC backed tech start-up with the mission of delivering superpowers to support teams everywhere.  Futr’s superpowers are transforming the way organisations serve their audiences.

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