Acronym Explains How Commerce via Chat Is Growing

I spent the weekend making new friends on the web. Chatbots are now my new BFFs. Who (or rather what) are these Chatbots? A chatbot is an artificial intelligence (AI) program that can simulate a conversation (or a chat) with a user in natural language through messaging applications, websites, mobile applications or by phone. The global chatbot market is expected to be worth $9.4B by 2024 according to MarketsandMarkets. The increase in adoption rate is largely driven by the business benefits realized through this form of automation. According to a study conducted by CNBC, business cost savings from chatbots are estimated to be worth $8B by 2022. More and more businesses are turning to chatbots to handle customer service. For many users, the chatbot is the first touchpoint with your business – which is more personal than email. It is also available immediately and around the clock. My biggest bane, even pre Covid, was the long wait time on the phone before being able to speak with a customer service officer to address an issue. I have found that on most occasions, a chatbot is able to process my request within minutes and, if there is a question that the chatbot is not able to troubleshoot, there is still the likelihood of being forwarded to a human employee, with transcript of the chat, so we can pick up conversation from where things were left off. Intrigued by how chatbots are increasingly influencing eCommerce, I decided to test out chatbot functionality on some of my favorite Brands. Meet my friend Neha. She is a chatbot for a large high-street cosmetic company. I recently purchased a couple of items online and ended up with one item that was damaged. As there were no return labels, I went online to contact the company and organize a refund and return the item. This brand, like many others, had their live chat functionality on the bottom right-hand corner of their homepage. Neha politely introduced herself and asked how she could assist. I explained the problem and she requested that I take a picture of the item so that she could assist to process the refund.  Then she cleverly suggested the option of a credit toward my next online purchase. I was intrigued so I asked about their existing promotions which prompted a series of questions that helped Neha suggest which of the products on promotion would fit in best with my skin type. Long story short, in less than 10 minutes, Neha had organized my return postage label, courier pick up time and upsold me for 3x more than the cost of the damaged item! Meet my Amazon marketplace ‘Anonymous Personal Shopper’. I have been online grocery shopping for over a decade. Understandably, during the first lockdown in February 2020, most major supermarkets blocked out and reserved their delivery slots for people over 70s deemed vulnerable to the virus. In the UK, Amazon very promptly partnered up with a large local supermarket to start offering a personal shopping experience for Grocery items. As an Amazon Prime subscriber, I was able to secure same day delivery with a selection of delivery slots available some as close as 2 hours from when my order is placed. On a weekly basis I fill up my grocery cart, select my delivery slot and wait for a text message from the system to let me know the status of my shopping cart. My interaction with this bot is two-fold. It lets me know the status of my grocery shopping cart, including when it is on the move and about to be delivered to my doorstep. Its link with mobile maps enables me to track my delivery right to the point where its minutes from my home. Secondly, if an item in my shopping cart is not available, the chatbot provides recommendations for a suitable substitute. I have the option to either accept or reject the substitution and my grocery bill is adjusted accordingly. From a customer service perspective, the rise of chatbots is great as it has allowed us to continue to self-isolate without having to worry about whether we will run out of milk or bread! Unfortunately for my decade old online grocer, Amazon’s new customer experience, has me sold and there is no turning back. Meet my friend Donna. She has solved all my banking issues (new cards, pins, statements, change of address among other items) within minutes! Ordinarily, we would have had to call the bank, schedule an appointment with an Account Manager and then spend anything from 30 minutes to 2 hours completing forms and jumping through hoops to get all items up to date.

More and more banking and financial organizations are leveraging artificial intelligence and investing in chatbot solutions to reduce costs and serve increasingly tech-savvy consumers. The objective is to provide quick service and transactional support. Most basic tasks such as balance inquiry, bank account details, loan queries etc. can now be handled by a chatbot efficiently, allowing customer service representatives valuable time for more complex issues. According to a report released by Juniper, chatbots will be responsible for over $8B in annual cost savings by 2022! In fact, more advanced banking chatbots already exist and based on customer’s data, they can track spending habits, provide credit scores, set and manage budgets and tell the consumer where they are spending their money. With the added advantage of AI-based recommendations, these advanced banking chatbots  could even provide advice for better money management. I am not quite ready to hand over my purse strings just yet, but who knows what the future holds. Meet my friend Patrick. I had read about Lego’s gift chatbot, Ralph, who was launched over Christmas to help indecisive shoppers. I was hoping Ralph would be able to help me pick out a Father’s Day gift. Ralph was not available, but Patrick talked me through my options and helped me weigh out the pros and cons of a Minecraft themed set vs. Mindstorm robotics kit. He shared links to the Lego shopping website and images of themed options complete with discount codes.

According to HubSpot, 47% of users are open to purchasing items through a bot. That is nearly 1 in every 2 customers who are willing to engage in a purchase process that is completely guided by a chatbot! I did deliberately abandon the cart. Though, Patrick is a persistent chatbot. He has tried to re-engage me through messenger and tempt me with discount codes and free shipping.  No, I have not transacted yet and am waiting for the retargeting media campaign to kick in. Beyond the sales and lead generation aspect, another benefit of Chatbots is cart recovery, particularly for retail and eCommerce companies. Chatbots can remind customers to buy, offer assistance, discounts and even clear up confusion or address concerns. Smart marketers can take this one step further and integrate the intel collected from chatbots and inject it into their remarketing campaigns to re-engage cart-abandoners and try to trigger a transaction. Meet my “Anonymous Friend” who specializes in luxury travel. A couple of months ago, I was contacted by a luxury hotel group’s chatbot as part of their lead generation exercise to re-engage with a past guest. The message was simple: “Hi Farah. We invite you to experience Budapest with our limited-time offer. Please let us know if you have specific travel dates in mind and any questions we may answer. We look forward to welcoming you.” Of course, I was interested. Considering Covid travel restrictions are being eased and summer travel is becoming a real possibility, I inquired about the current offers and travel restrictions. The chatbot’s response included links to relevant packages, travel documentation requirements, a link to a list of accepted countries and contact details for the reservation team. In the last few years, interest in chatbots within the hospitality industry has been growing steadily and is greatly reinforced by COVID-19 circumstances that push towards staff compression, cost efficiency, and the need to deliver instant and up to date information to prospective guests.

Beyond the above example of how the hospitality industry is using chatbots to influence direct sales and deliver relevant information, chatbots offer support by increasing operational efficiencies, by filtering and answering frequently asked questions and redirecting the more complex questions to the reservations or concierge teams. My weekend with my new friends was truly educational. I learned that chatbots have multiple uses for business from a variety of industries beyond retail and eCommerce. With their quality improving and advances in AI-based technology, they are here to stay and are a welcome change, particularly from a customer service and operational efficiency standpoint. As AI and related technologies develop further, the more advanced chatbots will drive lead generation, influence cart recovery, and engage with prospective customers into conversational commerce that could impact an additional revenue stream. It’s no wonder that by 2024, chatbots are projected to drive eCommerce transactions worth $142bn! If you’d like to discuss how Acronym can help you leverage chatbots for cost-savings or as a revenue driver, contact us. POV by Farah Sadiq, EVP, International