Chatbot for e-commerce and online stores

There is an online store for almost everything. A person can buy any sort of product online. With this, there is a lot of competition these websites have to face.

Bringing in a new user and maintaining the current customer can be difficult. People look for convenience and ease of buying online. And so chatbot came into being.

Chatbot is a multitasker. It not only reduces manpower but also brings more efficiency with quick responses.

Chatbots are beginning to take over the world of e-commerce.

Since E-Commerce is a very broad category and uses cases of Chatbots can be explained on the type of e-commerce stores.

Chatbots for e-commerce companies are typically designed to:

• Complete buyers purchase:

When a person visits your website the user may or may not make a purchase. They will have varied reasons for this.

A chatbot in this situation can address the problem by emerging on the webpage with different possible scenarios for the user.

This will create interactions with the user and covert purchase.

• Offer buyers product recommendations:

When the user navigates the website for a specific product or services and trends to find it difficult to reach the product.

A chatbot can help with the navigation of the product with a quick response and offer buyers with a product recommendations.

• Provide customer support:

Users might visit the website during the non-working hours. Or maybe when there is no one at the desk to attend the customers regarding the queries.

A chatbot is available 24*7 for customer support.

This makes customers more reliable towards your brand.

Why your online business should use Chatbot and boost sales?

Chatbot supports as a support system for sales organisations. This leads to high sales volume and lead generation.

And this happens because chatbot provides informations required to make more efficient sales at different stages.

Chatbots are fulfilling an outstanding role in improving lead quality and shortening the sales cycle.

Converting visitors into leads and shortening the sales cycle –

Chatbots improve your sales database while providing you with a greater possibility to generate new sales.

When you sell a product or service online chatbot collects information regarding your customer’s needs and behaviour along with their preferences. This information can help to know your customers better and help them convert.

Chatbots have the benefit of a more friendly, conversational tone, addressing customers directly on the website, and often assisting them with the issues they may have been facing in the first place that stopped them from making the purchase initially.

Chatbot can give your customers a gentle nudge to buy.

It should be integrated in a way that the process of asking questions and answering them should be easy and simple. Chatbots enables your company to answer your customer’s questions automatically, saving you and your customers time and money.

With the information collected by the chatbot, the sales cycle can be reduced to a great extent. It allows companies to spend more time on selling rather than prospecting.

Since E-Commerce is a very broad category and uses cases of Chatbots can be explained on the type of e-commerce stores. As explained below with Examples.

Chatbots for clothing stores –

There are many brands using a chatbot for better communication, reach their target audience, recommend products, drive higher sales, customer support 24*7.

As per the statistics collected by Gartner, 30% of the shoppers interact with e-commerce chatbot.

E-commerce chatbot is a great tool for online retailers to get information on customers.

Burberry’s chatbot – luxury shopping Store:

The Burberry Chatbots starts with inviting you backstage where you can see models in exquisite Burberry outfits at the latest fashion shows.

At the same time, you can browse the current collections and get complete looks with the chatbot along with suggestions made for matching items and accessories.

The navigation is rather multi-directional and easy to navigate.

The collections are shown with the prices for each item together with the “Shop Now” links which lead to Burberry’s website.

Estee launder – Luxury makeup store:

For the UK, Estee Lauder launched a mobile service through its Facebook Messenger during Christmas season. The Messenger bot would make the shopping process more convenient for the customers shopping for Christmas gifts.

A 60-min instant courier delivery across London made the deal look more appealing to many.

In 2017, in partnership with ModiFace, Estee Lauder launched an augmented reality-powered chatbot so that customers can choose their lip shade by taking a simple quiz.

What does the fashion and beauty industry think of chatbots?

A chatbot in e-commerce can supply that missing link between the customer and the retailer creating a personalised approach to each user while keeping the convenience of online shopping.

Many leading fashion and beauty brands have already adopted the chatbot technology to create an individualized customer experience.

We come across chatbots for Burberry, Tommy Hilfiger, Sephora, Victoria’s Secret, Estée Lauder – this is just a shortlist of brands using chatbots for interacting with their customers.

Benefits for the customers –

• Easy navigation for the product without getting stuck on the site architecture
• Notifications and updates regarding the products, delivery, updates, delays in delivery, offers or any personalised request.
• Customer support 24*7
• Customers can apply filters and find the exact product.

Benefits for the business –

• Sharing on social media or with their friends by customers making it more popular
• Get insights regarding a product and know which product is working more
• Get customers a customised experience.
• Integrate your chatbot with CRM and other support tools to easy your workflow
• Bot handles the customers queries more efficiently

How Do Chatbots Work?

Before integrating a chatbot on your website, it important to know how this works. There are 2 ways to get started with a chatbot.

1. Rule-Based Chatbots –

Rule-based chatbots are pretty straight forward. There are a specific set of rules. If the question asked by the user matches the rule, the answer will be generated, or else the user is notified with no answer availability. Though it might give an accurate answer. The downside is, they do not scale well. To add more responses, you have to define new rules.

1. AI Chatbots –

Chatbot also uses AI to handle a wide range of conversations and requests from users. The responses here to the queries received can be interpreted to the user’s language they would understand and therefore meet their needs.

AI chatbots make sense if you want to handle complex queries and comments from users, such as a user asking for a product recommendation.

The choice of a chatbot depends on the kind of services being provided. If a rule-based chatbot is sufficient for the website, you can integrate that. With that said, most e-commerce merchants would benefit from the more advanced AI bot that can learn about customers’ preferences to encourage more purchases and provide personalised service.

How do I measure my Bot’s ROI?

It’s important to measure the ROI of the chatbot. Just building a chatbot won’t be enough if the business is not benefitting from it. If the chatbot is not efficient enough the user will stop engaging. Around 40% of the users will stop chatting after the first message and probably 30% after a few seconds.

The data will include the metrics related to the bot’s helpfulness like engagement and retention rates along with other metrics to measure the sales conversions.

Steps to measure the ROI for a chatbot:

1. Identifying the eligible queries –

Identify the queries received by the chatbot. Then, identify the top simple queries that could be resolved by a Chatbot.

2. Percentage of eligible chats –

Identify the queries a chatbot can handle.

For instance, let us assume that you receive 15,000 chats per month, of which you identify 50% or 7500 common queries that could be handled by AI chatbots.

Note that the 80:20 rule usually applies – 20% of queries represent 80% of query traffic.

3. Average time spent of each eligible chat –

Calculate the estimated handle time for these types of simple inquiries.

For instance,

For each of the 8,000 queries:

• The a live person spends 10 minutes on average

• The chatbot spends 5 minutes on average (because they are twice as fast)

4. Measure the annual cost of handling eligible chats –

In order to calculate this multiplying the number of eligible chats with the average handling time on each chat.

For instance,

• 5,000 chats x 10 minutes / 60 minutes = 833 live person hours
• 5,000 chats x 5 minutes / 60 minutes = 417 chatbot hours

5. Calculate the annual cost of handling conversations –

Once all the information is collected, the true cost of an agent can be known. If a live person works with an hourly cost of $ 15 and the cost of a chatbot is $ 13 per hour.

The approximate annual cost of handling would be –

• 833 agent hours x $15 x 12 = $150,000 / annum (Live person)
• 417 agent hours x $13 x 12 = $ 65,000 / annum ( Chatbot)

Compare your annual cost with your quoted Chatbot cost to find out how much you could save.

Conclusion:

Chatbots are great to combine Customer Service and Sales.

As long as companies treat bots as a technology and not an actual person, we are good to go with this advancement. This technology can surprisingly be a lot more useful to communicate with buyers then it may intend.

Make a note of keeping a track on the bots to understand the technology better. This would help to serve your customer better.

About the author

Sandeep

Website | + posts

Co-Founder @ BigRadar. Building conversational interfaces for small and large enterprises.

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