Are Chatbots the Future of Retail?

Chatbots have evolved. They can now understand what we say to them and can respond in a helpful way. They are conversational, and thanks to advances in artificial intelligence, machine learning, and natural language processing, they are proving indispensable for the retail industry. Delivery of a more personalised, efficient, and streamlined customer experience has found its perfect match in the chatbot revolution.

The retail sector, already reeling from a global pandemic, has needed to be agile in digital transformation. Big-name brands like Brooks Brothers, JCPenney, and Victoria’s Secret have either filed for bankruptcy or severely reduced their operations due to COVID. Yet some brands have not just survived, they have thrived through digital technologies such as chatbots.

Here are the main ways that chatbots are disrupting the retail industry in the wake of a global pandemic.

Personalisation on Demand

More than ever, consumers communicate with brands without human intervention. That’s mainly due to the vast amounts of data that chatbots have access to. Chatbots use that data to create a more personalised customer experience, proving extremely high-value for retail brands. While there are many benefits to using chatbots, that personalisation is proving to be extremely useful.

That’s because chatbots can see user histories, use what they learn to deliver upselling opportunities, direct users to the answers they need and understand what they require to create a frictionless experience. Already, brands like Sephora are offering bespoke shopping solutions to users based on directly provided information by those users.

Personalisation isn’t simply about adding a user’s name to the start of a conversation. It’s about creating a customer experience based on that unique consumer’s preferences and needs. And chatbots deliver that experience at a speed and consistency that human customer service teams can’t hope to match.

Platform Specific Payments

Social commerce looks set to be with us long-term. Even pre-pandemic, eCommerce and social commerce were on the rise. The rise continues, accelerated by necessity. Consumers want efficiency and consistency when they buy, and they don’t want to jump from platform to platform to buy what they need or find out more about possible purchases.

Chatbots make this straightforward. Now, a shopper can see a product on Facebook and buy that product without moving away to brand websites or other platforms. Instead, they can start a chatbot conversation with the business and make the payments for those products without ever bouncing elsewhere.

The result is a seamless shopping experience that takes the consumer through every stage of the buyer’s cycle. That streamlining is of absolute necessity in a consumer climate where even the shortest delay in communications or discovery can lead that consumer to your competitors.

Automated Growth

Using chatbots is about automating customer service until the user requires human responses to queries. And automation is both a time-saver and a money saver. The biggest bank in the US, JPMorgan, successfully automated legal checks and saved 360,000 work hours a year.

The cost of hiring, onboarding and training new employees can be highly prohibitive but a necessity for customer service roles. Now, retailers can transfer their eCommerce customers to chatbots, potentially making vast savings. That’s not to say that humans have become redundant in customer service, and more that chatbots and humans can work together seamlessly.

Consumers begin conversations with chatbots, and in many cases, they will immediately find the answers or the products they need, and the communication ends successfully. In other cases, the chatbot may not be able to answer a specific query, so it passes the user onto a human representative.

This saves time and cost and improves working conditions for human workers. They no longer have to repeat the same answers to FAQs and can instead work on more meaningful exchanges. That changes the game for both the consumer and the employees.

Multilingual Communications

Modern chatbots are so advanced that they aren’t even limited by language. Some chatbots can already translate up to 120 different languages without interruption to the conversation. That’s proven valuable for other sectors such as charities and social housing organisations. In retail, it might just be critical.

Chatbots can be set up to default to local languages for global brands. But there’s also the option to change languages based on the user’s needs. For non-native speakers, that’s an exceptional add-on to the customer experience. Those conversations can take place across multiple platforms is only the icing on the cake.

Understanding customer needs across multiple languages can be transformative for retailers in an age where the consumer demands personalisation and immediacy. Consider the languages that even a small section of a target audience might use, and you’ll start to realise the extreme value of being able to communicate in the consumer’s chosen language.

The Future of Retail and Chatbots

Chat driven interfaces that communicate when, where, and how the consumer prefers are the future of retail. There are too many advantages to today’s bleeding-edge chatbot products. The financial benefits and the ROI of chatbot deployment prove to be a winner for those brands that have already adopted their use. But from a customer service perspective, they create a seamless, relatable, and transparent experience for the consumers that encounter them.

We may still judge chatbots based on the 2016 wave of basic models. But they’ve come a long way since then. They are faster, learn, are more capable, and deliver more. Any retail brand that’s struggling to recover from the effects of COVID and lockdowns needs to address its digital transformation strategy. And at the heart of that transformation is the humble chatbot, quietly working away and resolving the modern consumer’s needs.


Sudarsan Chakraborty is a professional writer. He contributes to many high-quality blogs. He loves to write on various topics.