E-Commerce Chatbots: Use Cases & Benefits Explained
By Ian Donnelly
E-commerce chatbots have been around for a few years — which, in the world of e-commerce, makes them part of the furniture.
But with recent developments in AI and the evolving e-commerce landscape, the role of chatbots is being reexamined and online retailers are renewing their approach to incorporating these tools into their online experience.
These chatbot solutions are quickly growing beyond the scope of what was previously possible, and with artificial intelligence driving constant innovation, companies can’t afford to ignore how influential these technologies will be in shaping the future of e-commerce.
Here’s everything you need to know about e-commerce chatbots and how you can use them to the benefit of your business.
What Is an E-Commerce Chatbot?
An e-commerce chatbot is a computer program that communicates with customers via an online platform. E-commerce chatbots are designed to mimic human conversation, allowing customers to engage with an e-commerce business in a more conversational and personal way.
The ultimate goal of e-commerce chatbots is to stand in as a virtual agent, assisting customers with a variety of online shopping tasks and answering any questions they might have. And with the recent rise of AI-powered tools like ChatGPT, chatbots have evolved in leaps and bounds, making this goal an attainable one.
Up until recently, chatbots were limited to a rule-based system that restricted communication to a set number of predetermined responses. These chatbots of yesteryear were self-contained systems that couldn’t hold back-and-forth conversations. They resembled automated phone menus, guiding users through a series of preset choices to reach default answers, which limited the detail and range of what these conversations could be.
Because of this, e-commerce chatbots were predominantly used for simple, straightforward interactions, like providing information on business hours or processing basic customer service requests.
But those limitations are things of the past thanks to the rise of advanced AI technologies. Today, AI-powered e-commerce chatbots are capable of comprehending text and speech and offering responses that go well beyond a basic script.
How AI Revolutionized E-Commerce Chatbots
AI has completely transformed e-commerce chatbots from conventional systems into effective, intelligent tools.
Instead of restricting users to a predetermined set of questions they can ask, e-commerce chatbots can harness natural language processing (NLP) to analyze and grasp human intent in the prompts they receive. They can understand any question they’re faced with, even when customer queries are written with colloquialisms, shorthand, or slang.
These chatbots can also generate constructive responses to prompts without relying on a rule-based system. Thanks to generative AI, e-commerce chatbots can have conversations that build and grow into unique customer experiences, with an e-commerce chatbot formulating answers in real time.
And with machine learning, e-commerce chatbots can continue to improve with each new interaction. As an AI-powered chatbot has more conversations, it learns from each new data input, absorbing a user’s responses to suggestions and their individual preferences and incorporating them into the conversation.
These new AI-powered features have added limitless potential to what chatbots can do for e-commerce businesses. These tools are no longer restricted to answering frequently asked questions and defaulting to a human representative when confronted with a complex query.
Now, AI chatbots can help online shoppers find the perfect product to suit their needs. They can converse with your audience in an organic and constructive way, actively engaging with them as human agents would. They can help customers navigate an online store, take part in the sales process, make informed product suggestions, and help increase customer satisfaction.
In short, e-commerce chatbots can revolutionize the way your customers interact with your brand. The uses for e-commerce chatbots are only limited by your imagination and what you want your customer experience to look like.
E-Commerce Chatbot Use Cases and Examples
Chatbots are highly versatile tools that can be used in numerous ways to enhance the customer journey. It’s all about knowing where they best fit into your business and deploying them in the right context.
Let's explore some common use cases and examples of how chatbots can be incorporated into your e-commerce experience.
Answering Personalized Questions
E-commerce chatbots excel at providing quick answers to common customer inquiries. Whether it's information about shipping policies or details on a particular product, a chatbot can provide instant responses that keep your customers happy and engaged with your brand.
An e-commerce chatbot can be the go-to resource for your customers to turn to without having to hunt down information or find the relevant page on your website, ensuring that your customers won’t get overwhelmed or frustrated by trying to find answers to their questions. With a chatbot readily available to help with any pressing issues, customers can resolve concerns quickly and get back to shopping at your e-commerce store.
And with an AI-powered chatbot, your responses aren’t limited to basic or general information. An AI chatbot can handle questions that are unique and specific to the prompter’s current buying journey, responding directly to user input to give them the right answer.
If a shopper has a question during their shopping experience — like when an item will be back in stock, the dimensions of a product they are considering purchasing, which products would pair best with their recent purchase, or where the closest store location is to them — an e-commerce chatbot can quickly and easily address their concerns.
These are the types of questions that a sales associate would be able to answer for a customer if they were shopping in a brick-and-mortar store, and an e-commerce chatbot powered by AI can fill that role in the digital shopping experience.
Helping Customers Find Products
Connecting your customers with the right products is the goal of any e-commerce experience, and e-commerce chatbots can help streamline that process.
E-commerce chatbots can act as personal shopping assistants, and the two-way conversations they are capable of can help customers find products that fit their preferences.
By asking a series of targeted questions, a chatbot can narrow down product options, make personalized recommendations, and guide shoppers on an individualized customer journey that caters to their unique needs.
Assimilating data points like a customer’s style, unique attributes, and preferred categories can make your e-commerce chatbot feel like a helpful, reliable tool for your customers to use. An outdoor sports brand, for instance, could steer chatbot conversations by asking about a customer’s preferred outdoor activity, their location, and the weather conditions they face to recommend the most suitable products to fit their needs.
With the right framework for these conversations, an e-commerce chatbot can help customers make informed decisions and have the best possible experience with your brand.
Managing Orders and Returns
Tracking orders and handling e-commerce returns is an integral part of online shopping, and it’s a process that every customer wants to be seamless and hassle-free. An e-commerce chatbot can be an invaluable tool for helping your customers stay updated on their shipping order status and helping them navigate the returns process.
With the ability to identify and coordinate data points faster than any human agent can, e-commerce chatbots can streamline tracking and returns, making it as efficient and responsive as possible. Customers can inquire through an e-commerce chatbot on the status of their order or return and get a real-time update, making the process smooth and convenient.
And that is ultimately what any customer wants from your brand when they request updates on their order or want to return a product — they’re looking for a customer-friendly experience that can clearly communicate the most important details on their specific issue, which is exactly what an e-commerce chatbot offers.
Offering Promotions and Discounts
Chatbots are also excellent at promoting sales and discounts. They can be used to notify customers about ongoing sales, offer discount codes, and suggest products based on previous purchases.
An AI-powered chatbot can take massive amounts of data into account for each interaction it has with your customers, utilizing all of the relative data on your products and connecting it with the relevant personal data of the customer it’s conversing with. With this in-depth knowledge of your business and your relationship with your customers, chatbots can offer sales and discounts that are most relevant to each shopper, and do so in real time as that person is shopping and interacting with your business.
Chatbots that are integrated across multiple marketing channels can be particularly effective with this tactic. Having an e-commerce chatbot that can promote sales to customers via Facebook Messenger or through SMS messages, and then hold back-and-forth conversations that help customers shop for products directly through the chatbot, can inspire customers to shop your sale and form a deeper connection with your brand.
Conducting Market Research
On top of the countless customer-facing benefits, e-commerce chatbots can be powerful analytical tools that offer a detailed look at your business’ target audience.
As chatbots converse with your customers, they collect valuable customer data and feedback. Every interaction is a useful data point when taken into context, providing insights into customer behavior, preferences, and satisfaction levels.
All this data can fuel your marketing campaigns, help you understand emerging trends, shape a more streamlined buying experience, improve your products and services, and more.
Whenever your customers engage with your e-commerce chatbot, they are speaking directly to your business and providing valuable zero-party data, and your business can’t afford not to build on those interactions.
Read This Next: The Importance of Zero-Party Data
E-Commerce Chatbots Benefits
The use of chatbots in e-commerce comes with an array of benefits. Here are some key advantages:
24/7 Customer Assistance
First and foremost, e-commerce chatbots provide customer support whenever your shoppers need it. These tools are available around the clock, so customers can get their queries answered at any time.
Having this always-on service is essential for e-commerce businesses. Online shopping provides an opportunity for customers to shop from anywhere and at any time — they’re no longer restricted by store hours or where they live in relation to a store. Your customer service can’t be limited, either, and chatbots can be your business’ steadfast customer assistant that e-commerce demands.
Customer service is a necessary expense for businesses, but e-commerce chatbots can help make your customer support as efficient and cost-effective as possible.
Chatbots can handle numerous customer interactions simultaneously, reducing the need for a large customer service team. Each customer’s query can be handled on an individual level without the need for a workforce solely dedicated to answering customer questions.
This efficiency can have a huge effect on your business’ bottom line, resulting in significant cost savings.
E-commerce chatbots aren’t just systems that help customers with problems. They can play an active role in the customer journey, enrich the shopping experience, and drive sales.
An e-commerce chatbot can engage with customers in a simulated human conversation, helping them with any issues and guiding them to convert without straying from the buying process. It’s a dependable assistant that can keep your shoppers on track, make personalized recommendations based on the input that your customers provide, and organically guide your shoppers to purchase.
When you have an e-commerce chatbot geared toward connecting customers with the right products, the entire customer journey can be refined — it can help you reduce cart abandonment rates, increase your customer lifetime value, and create long-lasting relationships with loyal customers.
E-Commerce Chatbot Best Practices
To make the most of your e-commerce chatbot, here are some best practices to follow:
- Know what you want your chatbot to accomplish. An e-commerce bot can enhance so many aspects of your business, but it's important to know where it fits into your customer experience. Once you know your chatbot’s role, you can plug in the data, conditions, and workflows that will help you achieve your goals.
- Train your chatbot with the right data to ensure it provides accurate and relevant responses. Your chatbot needs to know your business, your products, and your customers as well as a human customer service agent would to provide an adequate customer experience.
- Design your chatbot to reflect your brand's voice and personality. Remember, your chatbot is an extension of your brand's customer service capabilities, so it should reflect your company's values and image.
- Ensure your chatbot respects user privacy and complies with data protection regulations. The data your chatbot needs to answer your customers’ questions requires gathering and analyzing their information, which means your business becomes responsible for the privacy and security of that user data. Proper consent management capabilities and policies are essential to make this process safe and secure.
Conversational Commerce and the Future of E-commerce Chatbots
The evolving role of chatbots is leading e-commerce in an exciting direction — one where conversational commerce reshapes the way we shop and engage with the brands we love.
Soon artificial intelligence will play the leading role in the buying journey, and modern businesses need to embrace and leverage AI to stay ahead of the curve.
Bloomreach is making this new era a reality with Clarity, our revolutionary conversational shopping AI built for modern e-commerce.
Bloomreach Clarity is trained on real-time customer data, your product catalogs, and our 14+ years of data on how customers shop and search, offering every customer the most personalized and relevant experience whenever they interact with your brand.
It goes beyond the current scope of e-commerce chatbots to serve as a product expert, engaging shoppers in conversations that are authentic and specific to your business. It can help your customers find the exact product they’re looking for, guide shoppers who don’t have a specific product in mind, make personalized recommendations based on every customer’s unique needs and preferences, and much more.
Interested in learning more about Bloomreach Clarity and exploring new ways that conversational AI can revolutionize your business? Visit our site to learn more and join the waitlist today.