How to Increase eCommerce Sales with Chatbots in 2021

The sphere of sales and marketing has reached a saturation point consisting of a colossal list of options, further narrowing down the profit margins extensively among the business competitors. The only things left are the ever-increasing quality in catering to the high expectation of the customers and meeting the optimal standards of user experience. Hence, only human effort and meticulous dedication are not sufficient enough. You need to implement some state-of-the-art strategies like artificial intelligence, machine learning, and automation in your services to set yourself apart from the crowd and emerge as the winner of the eCommerce rat race. 

Introducing Chatbots, one of the driving factors of artificial intelligence in eCommerce sales that have entirely revolutionized the concept of customer service, interactive communication, and the overall user experience in purchasing products & services from online platforms.

All the leading tech giants like Google, IBM, and other eCommerce companies are rapidly promoting the use of these virtual assistants for generating high business outcomes. An eCommerce chatbot can be highly functional in making your online sales smooth and can facilitate a prolific user experience. Let’s see how!

• What is a Chatbot?
• eCommerce Chatbot Technology-How Do They Work?
• 10 Ways in which Chatbots can Benefit your Online Business
• How Much Does It Cost To Build Chatbot In 2020?
• Summing Up

What is a Chatbot?

It's the life of your online business platform. 

A chatbot is an artificial intelligence (AI) program that can interact with a user in natural language through messaging platforms, mobile apps, websites, or by phone.  Unlike software applications, users don't need to download, install, save, or update chatbots. They can be set up on a company's website, mobile applications, or on a social media platform to connect to the users directly for addressing their real-time queries.

Introducing chatbots in eCommerce businesses can result in a better user experience and faster and simpler customer service interactions. For example, HelloFresh's chatbot, Freddy, is used as a customer support chatbot to cut wait times for customers. 

Let us take a look at some interesting market facts:

• 69% of consumers prefer chatbots because of their ability to provide quick replies to simple questions (Chatbots Magazine).

• 85% of customer interactions are expected to be handled without a human agent in the future (Gartner).

• Chatbots can help businesses save up to 30% on their customer support costs by speeding up response times and answering upto 80% of routine questions. (IBM)

• Juniper Research believes that by 2022, chatbots will help businesses save over $8 billion per year.

• The global chatbot market size is estimated to grow from USD 2.9 billion in 2020 to USD 10.5 billion by 2026, at a CAGR of 23.5% during the forecast period with North America holding the largest share. APAC is expected to grow at the highest CAGR supported by  flexible economic conditions, technology advancements and digitization. 

• Better customer service, reduced chatbot development costs, increasing use of chatbots for marketing and sales, more investors in chatbot technology, rapidly growing eCommerce sectors, advancements in AI, NLP and Cloud Computing technologies are some of the driving growth factors to develop eCommerce chatbots.

eCommerce Chatbot Technology - How Do They Work?

Over the years, eCommerce has evolved in profound ways. The eCommerce market has become a part of our daily lives and is expanding super fast. To meet rising user demand and to offer an exemplary shopping experience, businesses are moving from their brick and mortar setup to selling online. And the outbreak of Covid-19 has further accelerated the growth of this market. 

However, with this popularity comes a highly competitive force driving businesses to incorporate trending technologies on their platforms to augment sales. As a result, we now have AI chatbots that can amplify customer-driven and customer-centric practices through conversational chatbot marketing.

A chatbot for eCommerce is transforming the overall experience of the customers and making them more adaptive towards using eCommerce products. Owing to its innumerable benefits, eCommerce chatbots are one of the most trending, smart, and customer-centric technologies today.

On the basis of programming, chatbots can be divided into two broad categories:

Script Chatbots

This the most simple and basic form of chatbots used in eCommerce today. Their interaction with customers happens through pre-defined rules and keywords that can respond to only specific queries. Since no artificial intelligence is used here, an open conversation with this type of bot is very limited.

Intelligent Chatbots

These are the most advanced and automated programming chatbots. They use AI along with Machine Learning to store conversations to learn and grow and get intelligent from their own experience making them entirely self-operating and capable of dealing with complex customer inquiries. The idea behind this is to make robots “think like humans”. Unlike script bots, these bots use Natural Language Processing (NLP) to understand and respond in the client's regional language, giving a “talking to a human” like experience to its users. IBM's Watson, Amazon's Alexa, Mitsuku- Pandorabot, etc are perfect examples of Intelligent bots. 

While there are other bots like NLP Chatbots, Service/Action Bots, Social Messaging, Voice Enabled, Context Enabled Chatbots, these are just variations of Intelligent Bots and are differentiated based on their characteristics. 

10 Ways in which Chatbots can Benefit your Online Business

1. Helps in Understanding Customer Preferences

Chatbots can be used to collect information about your visitors and use it to make better product recommendations and personalised offers. Understanding customer preferences allows you to personalize product pages and offers, thereby building customer affinity and loyalty. Some chatbots even perform hyper-personalization, like H&M, whose chatbot asks customers some questions and shows products accordingly.

2. Reduces Customer Support Cost

Having a well programmed chatbot do most of your repetitive mechanical customer service activities can help you save a substantial amount of money on the customer service team. Including a simple chatbot to answer FAQ’s like find the nearest store, refund policy, order status, order tracking, etc can help save you decrease customer support cost by up to 30%. This also allows you to reduce human error, enable efficient customer service as well as concentrate on more critical aspects of your eCommerce site. 

3. Provides Upselling Opportunities

eCommerce Chatbots can also provide an opportunity to upsell products or services helping your business to generate additional sales. For example, to customers who just bought themselves a brand new phone, your chabot could suggest a trendy mobile cover or a pair of headphones to go along with the phone. Customers are likely to appreciate this personalised approach and less likely to dismiss the offer. Nice trick right?

4. Provides 24*7 Customer Support

This is by far the greatest advantage of programming a chatbot in your eCommerce business. Chatbots are operational round the clock, which means you can cater to your customers immediately everytime, irrespective of time and location, which otherwise would be an expensive affair. This is a great way to ensure your customer’s expectations are met and they are completely satisfied. 

5. Reduces Response Time to Customer Queries

Long waiting time is one of the top 10 factors of customer grievances worldwide. Chatbots can be an effective solution to this issue as they are designed to answer customer questions immediately. This definitely creates a positive customer experience and leads to a high conversion rate or completed purchase. 

6. Helps Customers Find Products

Chatbots work as sales representatives helping customers find exactly what they are looking for in no time. Because innumerable items are listed on an eCommerce platform, customers have to scroll through thousands of products to get to the desired item making their shopping experience unpleasant & time consuming. Chatbots help by guiding customers towards the best suited product and directing them to the checkout page. This makes their purchase faster and experience fantastic.   

7. Simplifies Payment Process

If you have integrated payments into your eCommerce chatbots, you can simplify the payment process by allowing customers to make payment in the conversational chat itself. Say, the developer adds a "Pay" button to the chatbot message. After the user taps the button, they are asked to fill in the payment details, shipping information, and a payment confirmation request. After confirmation, the payment is successfully made. 

8. Provides End-to-End Shopping Assistance to Customers

83% of customers look for assistance while completing their orders online. An eCommerce chatbot can be useful in providing step-by-step guidance to the customers - from item discovery by showing available options to item selection by explaining the features, benefits, price, etc to making the payment - literally everything! They act as end-to-end support in the online shopping journey of a customer and make sure the customers do not leave your eCommerce portal dissatisfied.

9. Sends Reminders for Abandoned Cart Recovery

Cart abandonment is a problem for retailers. Estimates say the average eCommerce store loses 75% of their sales to digital cart abandonment. But not all people abandon their carts on purpose. They might have questions about selected products, might be facing difficulties during checkout, or the website might be slow. Hence, chatbots can remind your customers of the items lying in their shopping carts. This might urge them to revisit their carts and enable them to purchase some if not all of the items in their carts. 

Chatbots can also be used to remind customers to redeem unused loyalty points in their account or notify them about latest offers/discounts, availability of a product that was out of stock, new collection arrivals, etc.

10. Increases Customer Retention Rate

Happy Customers are most likely to come back to your site for more. Chatbot enabled customer support service helps you build a loyal customer base and improve your customer retention rate which is vital for the growth of your business. 

How Much Does It Cost To Build Chatbot In 2020?

By now, you must be convinced about the ample benefits that chatbots can provide to your eCommerce business. But the next obvious question in your mind will be - How much investment do these need? Thanks to the emergence of various tools, libraries, and frameworks, chatbot technology is becoming increasingly affordable these days. Yet there are a number of factors that determine the cost to build an eCommerce chatbot.

• Platform: Developing a chatbot from the scratch is quite expensive. Thus, people generally use third party platforms like Chatfuel, Botsify, Mobile Monkey. These platforms can be used to make simple bots or advanced virtual assistants depending on the nature of your services and the rate of human intervention you require in addressing customer concerns. They guarantee rapid development and also provide flexibility. 

Pro-tip: If you are planning to start by investing a small amount, opt for Script Bots because they are simple and pocket-friendly.

• Features: Including third-party integrations like Natural Language Processing (NLP) for conversations, CRM tools, payments system, sales and marketing tools, automation for orders, remarketing tools for cart abandonment, and promoting offers in customized chatbots can increase your cost of chatbot development.

• Advanced features: Deep Learning Algorithm to control conversation; Image Recognition like in Xiaoice; Context understanding, etc can further elevate the total cost of development.

• Design of the interface: More complex the design of the Conversational User Interface (CUI), more shall be the cost.

• Social Media Integration: Integrating your eCommerce business with social media channels like Facebook, Twitter, Instagram also increases cost.

• Time: The total time taken to develop a chatbot and the time taken in training the chatbot with email chains, live-chat scripts, website FAQs, etc.

• Location & Size of the development team: Generally, developers in the U.S and Europe are more expensive than the Asian developers.

Depending upon the combination of above factors, a custom chatbot development can approximately cost US$25,000 and can go up to US$100,000.

Summing Up

From Joseph Weizenbaum's Eliza of the 1960s to Amazon's Alexa of the 21st century, the introduction of chatbots and its succeeding development has created a stir in the cosmos of the eCommerce sector. In September 2020, Amazon’s market capitalization reached $1.8 trillion nurturing the belief that voice will play a huge role in eCommerce. Their success implies that the contemporary world is way forward in accepting the innovative strategies incorporated in business services. Potential customers are looking for advanced systems like chatbots that can be humanly interactive and also helpful in reducing their time spent on eCommerce platforms simultaneously. All these beneficial aspects of a chatbot implementation are skyrocketing sales in eCommerce and if you also want to be in that league then this is the time of action.

The chatbot development process is quite overwhelming and complex. Hence, its best to hire a specialized eCommerce chatbot developer who will chalk out your requirements and build an eCommerce chatbot for you that is customized and can be integrated with your existing system. Tech Exactly can be your dedicated technology partner. Our professional team's staunch approach and enthusiasm to provide our clients with the best possibilities available in the market can make your eCommerce platform boom like never before. Right from conceptualization and strategy analysis to designing, development, release and post sales support, we assure quality and work hand-in-glove to provide end-to-end support at every step of your eCommerce chatbot development.