Chatbots in E-commerce: Benefits + Use Cases Explained

Chatbots in E-commerce

Chatbots are bringing huge transformation in the e-commerce world, assisting retailers to offer better shopping experiences.

Being a part of wider systems that support customer service in the e-commerce industry, chatbots can streamline complex interactions and drive businesses forward. A report published by Global Market Insights has revealed that the global chatbot market size will be $1.3 billion in 2024.

When users face an issue while shopping, they want immediate clarification. Around 75% of shoppers want to get their queries answered within 5 minutes. That’s because they make purchases while doing other tasks.

When Do People Buy Online

As you can see, people don’t have any dedicated time to shop. It means none of them will be patient enough to stay on the app till they receive an email. In fact, 60% of the emails sent by e-commerce brands are never opened and only 21% of opened emails get clicked. And less than half of them result in sales.

Not a good number, right?

That’s why you must leverage AI chatbot for e-commerce so you can answer customers' queries and keep them engaged. You can gain a better understanding of how chatbots in e-commerce can help via this blog, where we will discuss:

  • How do chatbots work in e-commerce
  • Chatbots for marketing
  • Advantages of chatbots in e-commerce
  • Challenges of chatbots in e-commerce
  • Examples of companies successfully using chatbots
  • Chatbots for e-commerce: future trends

Keep reading!

How Do Chatbots Work in E-commerce?

E-commerce website owners can leverage the power of chatbots to gain a better understanding of their target customers and their journey. By implementing advanced strategies, e-commerce can sell both products and brand ideas to customers.

One of the advanced strategies you can use is implementing e-commerce chatbots. It will significantly enhance their customer journey. You can even gain better revenue by combining chatbot marketing strategies with advanced technologies like AI.

Wondering how? Well, AI chatbots continuously learn from human interactions to comprehend customer preferences and offer them a more natural experience.

Chatbots for Marketing

No matter what type of e-commerce business you have, you will gain benefits by integrating AI chatbots.

Here are 3 benefits of chatbots for business:

3 benefits of chatbots for business

1. Benefits to Consumer (B2C)

As B2C e-commerce businesses directly sell products and services to customers, its website requires AI chatbots to understand customers’ needs and recommend the right product. By utilizing AI chatbots, B2C businesses can even design products that correctly fulfill their customers' requirements.

For instance, an AI chatbot can ask customers about their preferences and recommend them relevant items. B2C websites can also increase sales via AI chatbots.

2. Benefits to Business (B2B)

As B2B e-commerce businesses make sales between one business to another, they require influential communication skills with their clients. They can use AI-integrated leadbots to generate more leads.

The main objective of lead-generation chatbots is they answer questions and push visitors down the correct funnel. AI chatbots in B2B businesses answer questions and encourage clients to take action. It also reduces the time taken by business owners to qualify leads.

3. Consumers to Consumers (C2C)

C2C business uses AI chatbots to benefit third-party platforms and make sales by navigating customers toward engaging content. AI chatbots in C2C e-commerce understand the latest sales with an effective conversational marketing strategy and direct customers to the product.

Advantages of Chatbot in E-commerce

benefits of e-commerce chatbots

AI chatbots in e-commerce businesses are similar to online sales representatives who understand customer requirements and give valuable insights.

Here are 10 ways how e-commerce industry can benefit from chatbots:

1. Seamless Real-Life Interaction

AI-integrated chatbots are interactive because they help improve communication between humans and machines. These chatbots link one question to another and can respond to customer’s questions in a personalized way.

However, rule-based chatbots are non-engaging because they have pre-programmed responses to questions. It makes them appear robotic and uninteresting. Also, rule-based chatbots and customers have a difficult time quickly switching topics in their conversations.

2. 24/7 Customer Service

Human chat agents can understand the emotions behind queries and respond accordingly. However, handling repeated questions can irritate them, resulting in providing non-satisfactory responses. It is where the AI chatbot enters!

AI chatbots are much more efficient and can respond to several, repetitive queries. Wondering how? Unlike human chat agents, AI chatbots can handle questions 24/7 without making customers wait for responses.

3. Customer Data Security

AI chatbots use previous conversation data to follow a customer's journey. In addition to the many uses of chatbots, safeguarding the privacy of clients is crucial while gathering data from the exchange.

While AI chatbots are good, they can sometimes ask obstructive questions that compromise the privacy of their consumers. That’s why online business owners should test and update their chatbots on a regular basis.

[Also Read - Safeguarding Your E-commerce Site: Tips and Strategies for Security]

4. Reduce Customer Requests

By analyzing and diverting possible tickets, chatbots take the load off agents. They assist customers in finding possible solutions by handling repetitive jobs, answering general inquiries, and providing self-service options.

This allows agents to focus their skills on requests or complicated problems that call for human interaction. These requests may differ according to the goods, services, or sectors that a firm offers, but they often consist of:

  • Providing order status and tracking information
  • Offering product details
  • Assisting with returns or refunds
  • Balancing accounts and identifying payment issues
  • Collecting feedback
  • Offering self-service

5. Improve Agent Training and Onboarding

Companies can use chatbots when onboarding and training new agents. During onboarding, chatbots are always available to answer questions, even when managers or trainers aren't around. AI can find relevant help center articles and recommend the best course of action to new agents to assist customers in real-time.

Chatbots can also be used by businesses to offer new hires self-service tools, which will facilitate their integration into the company culture. HR and IT chatbots can assist new hires in learning about company policies and offer solutions to frequently asked queries.

6. Interactive Chatbot Flow

The conversational flow of AI chatbots successfully replicates sales reps in a physical store. It starts with a welcome message and further assists users throughout their journey. One of the main benefits of chatbot in e-commerce is its interactive flow.

  • Welcome Message: AI chatbots greet customers at the beginning of the conversation. It then engages website visitors and starts a discussion. Many online business owners include their logos during the conversation to create brand awareness.
  • Understanding Customer’s Preferences: Chatbots can quickly understand what customers are looking for by having conversations with them. Currently, the chatbot makes product recommendations to users. If customers can’t find relevant products on the website, the chatbot finds them and sells them via cross-selling techniques.
  • Increase Sales: Chatbots assist customers in instantly adding products to their carts while still chatting. As a result, online customers don’t close the chat window when adding items to their carts. This is important because one of the main problems that every e-commerce store faces is cart abandonment. For e-commerce websites, chatbots increase purchases and decrease cart abandonment.
  • Order Tracking: Customers can track their orders with the assistance of chatbots, which eliminates the dependency on support staff. Chatbots use cutting-edge technology to complete their tasks quickly and effectively!

[Also Read - AI in E-commerce: 8 Ways It’s Transforming the Business]

7. CRM Integration

By using CRM-integrated chatbots, online companies can be connected to multiple CRM systems. These chatbots can also streamline multiple tasks and automate data entry procedures. But this is not it. There are so many other benefits of integrating chatbots with CRM.

8. Gain Valuable Customer Insights

Online business owners can gain more insight into customer preferences by utilizing chatbots. Wondering how? Well, AI chatbot conversations are quick and efficient. Additionally, chatbots examine potential buyers' frequently asked inquiries and their willingness to buy.

One of the most difficult jobs in the e-commerce sector is locating possible clients. However, this process can be simplified and streamlined via an AI chatbot.

9. Helps in E-commerce Business Growth

One of the ways to improve customer service in e-commerce stores is by boosting the e-commerce customer experience. An e-commerce website owner can use an AI chatbot to determine the number of consumers who have positive and negative opinions about its goods and services.

When a company becomes more communication-focused, it streamlines the consumer experience in an online store. By implementing an AI chatbot, you can make your customers reach the sales funnel.

10. Strong Internal Communication

You can reduce your never-ending sales cycle by having effective internal communication. When a brand flawlessly communicates with its potential customers, it eventually increases customer loyalty and satisfaction.

While many e-commerce companies try hard to reply to as many customers as possible, they fail. But by integrating an AI-powered chatbot, online business owners can understand what the customer wants and provide them with better service.

E-commerce business owners can also incorporate conversational AI for e-commerce to offer helpful recommendations, customer support, and personalization.

Challenges of Chatbots in E-commerce

Challenges of Chatbots in E-commerce

Below are four common challenges of chatbots in e-commerce:

1. Understanding Complex Questions

At certain times, the chatbot requires assistance in interpreting complex customer queries. It happens due to limitations in NLP technology. Chatbots often fail to understand typos and slang, which can frustrate customers.

2. Limited Personalization

Compared to human interactions, chatbots’ ability to offer personalized interaction is limited. To enhance the customer experience, chatbots need to remember past interactions with customers or modify their communication as per the consumer's tone.

[Also Read - E-commerce Personalization: How to Tailor the Shopping Experience for Every Customer]

3. Integration with Existing Systems

Integrating chatbots with current e-commerce platforms, inventory management systems, and CRMs is not easy. There is a need for chatbots to be integrated effectively to get critical consumer and product data.

4. Maintaining Up-to-Date Information

Updating chatbots with the latest tech changes and promotions is not easy. This is why customers are often provided with outdated information, which results in dissatisfaction and loss of potential sales.

Examples of Companies Successfully Using Chatbots

Companies around the world use AI-integrated chatbots to create amazing experiences for their customers. Below are examples of e-commerce industry giants successfully using chatbots in their business:

1. Nike - Design Your Sneakers

Nike’s Stylebot - Design Your Sneakers

Nike’s Stylebot, an AI-integrated chatbot helps customers, especially female audiences to personalize their products. This personal stylist bot lets users upload pictures and choose colors to customize their shoes.

2. Sephora - Learn, Reserve, Enjoy

Sephora - e-commerce chatbots

Sephora uses a combination of 3 e-commerce chatbots to offer better customer service:

  • Sephora’s Kik Chatbot
  • Sephora Reservation Assistant
  • Sephora Virtual Assistant

These chatbots offer make-up advice, share how-to videos, and help users book appointments for makeovers at the Sephoras’ physical stores.

3. eBay - Find Your Gear, Place Your Bids

eBay - ShopBot

eBay has a chatbot, called ShopBot, which was designed to send bidders updates before the auctions ended. It allowed bidders to fight and win the auction. Over the years, ShopBot has evolved and now it helps customers find products by asking them the right questions.

4. H&M - Outfits, Curated with Care

 H&M - Kik bot

H&M uses a Kik bot, which displays clothing pictures and asks users to pick one that they like. Following this, the bot asks users to choose their fashion genre and encourages them to answer more style-related questions. At last, it builds their profile as per their taste.

Future Trends in Chatbots for E-commerce

Below are popular future trends of chatbots for e-commerce:

1. Advanced Personalization

Deep learning and data analytics will be used by e-commerce chatbots in the future to provide highly customized shopping experiences. Chatbots can anticipate customer preferences and customize recommendations by examining past interactions, purchase history, and browsing behavior.

[Also Read - AR and VR in E-Commerce Apps: Enhancing the Online Shopping Experience]

2. Voice-Activated Shopping

With voice assistants like Google Assistant and Amazon Alexa becoming popular, the need for speech-activated chatbots in e-commerce has increased. Customers can use voice-activated commands to shop, place orders, and get help, which will make their shopping more convenient and hands-free.

3. Visual and Augmented Reality Integration

Chatbots can be integrated with augmented and virtual reality to provide truly immersive shopping experiences. Before customers make a purchase, a chatbot can assist in viewing how that product will fit into their environment or how a clothing item will look.

4. Omnichannel Presence

Chatbots for e-commerce will be popularly incorporated into multiple channels including social media, messaging applications, and brand websites. This omnichannel approach will ensure a consistent and unified customer experience, regardless of where the interaction begins or ends.

[Also Read - The Future of E-commerce in 2024 and Beyond]

How Protonshub Can Help You?

If you have yet not integrated chatbots and conversational AI for e-commerce in your online store, you are missing out on great opportunities. With these advanced technologies, you can strengthen your business process and drive better sales.

Incorporating chatbots in your e-commerce business can be one of the best investments you can make. And for this, you can reach out to Protonshub Technologies. We are a leading mobile & web development company, crafting innovative solutions customized as per the client's needs.

We take pride in using the most advanced technologies to boost productivity and drive success for your business. No matter how big or small your e-commerce business project requirement is, you can always rely on us!

Frequently Asked Questions

Yes, chatbots are necessary for e-commerce websites because they act as a personal shopper & recommend products, offer instant customer service, reduce cart abandonment rates, boost customer retention rates, and help gain valuable customer insights.

As chatbots are often involved in handling sensitive user information, ensuring secure handling of data poses a significant challenge. Other challenges include limited user attention, integration with third-party services, and understanding complex questions.

Common future trends in chatbots for e-commerce include virtual & augmented reality augmentation, voice-activated shopping, advanced personalization, better integration capabilities, and more.

Ekta Singh

"Senior Content Writer"

Ekta Singh is a rookie food experimentalist and k-drama fan with 4+ years of experience in writing. Bridging gaps between companies and customers through conversion-driven content is her forte. She believes in writing stories for a living and living life for exploring places.