Why E-commerce Chatbots are a Must-have for Businesses Today

Providing excellent customer service is a necessity for any e-commerce store. No matter how good your online storefront is, you will always have some customers who have questions or concerns regarding the payment or refund process. And when your customers need you, you need to be around to provide assistance. However, this does not necessarily mean that you need to have a round-the-clock staff of agents online for 24/7 support. By deploying an e-commerce chatbot in your online store, you can provide real-time assistance around the clock. 

In this blog, we’ve documented everything you need to know about e-commerce chatbots – the different types, their importance and impact on customer service, and how to select the right chatbot solution for your team. 

What are Chatbots?

Chatbots are automated bots that interact with customers through a chat interface and provide an experience that’s similar to speaking with a customer service agent via live chat.

Though you can use chatbots for a variety of purposes, they are popularly used in customer service. Thanks to their ability to provide on-demand responses for simple questions and doubts, they’re an effective customer service tool.

But it’s important to note that not all online chatbots are the same. In general, there are two different types: rule-based bots and machine learning bots.

Types of Chatbots: Rule-based vs ML-powered bots

Rule-based bots operate by a set of pre-set rules, and typically offer pre-written responses to customer questions. These chatbots are built using flowcharts of conditional if/then statements, called ‘decision trees’ that are of varying complexities.

Here’s an example of a decision tree for a rule-based e-commerce chatbot –

Ecommerce-rule-based-chatbot-flowchat

Machine learning bots, on the other hand, provide much more human-like interactions. They look for certain phrases that signify intent and pull from context, previous interactions, and other resources to offer appropriate responses. Plus, they learn from every exchange, so they become more effective at answering questions over time. 

For instance, Freshdesk’s AI-powered chatbot, learns, and adapts to feedback using machine learning, and continuously improves its performance.


Now that we’ve covered the different types of chatbots, let’s understand why chatbots are a must-have for e-commerce and retail businesses that are looking to outperform their competitors.

Why Are Chatbots Necessary for E-Commerce and Online Retail Businesses?

Chatbots and AI are establishing an increasingly large presence in customer service, and by 2025, it is predicted that AI will power 95% of all customer interactions1. Here’s why chatbots are gaining popularity, especially in the e-commerce customer and online retail industry:

– Increasing use of messagings apps
Messaging channels such as Facebook Messenger, WhatsApp, etc have gained popularity amongst today’s digital customers. In fact, 67% of consumers prefer using messaging apps when interacting with a business2. E-commerce chatbots can be deployed on these platforms, enabling you to assist your customers wherever they are, with ease.  

– Customers prefer personalised experiences
According to a survey conducted by Epsilon, 80% of consumers3 are more likely to make a purchase from a brand that provides personalized experiences. Using chatbots, you can provide personalized experiences at all customer touch points. 

– Customers don’t like waiting for assistance
Experiences that involve low effort, and offer instant gratification are the ones that customers today prefer. A survey conducted by McKinsey revealed that seventy-five percent of customers online still demand help in 5 minutes or less4. Chatbots provide instant assistance around the clock. This way, your customers never have to wait for a resolution. 

Although chatbots are still in their early stages, they already enable e-commerce retailers to significantly improve their customer experiences. Here’s how – 

How Do E-Commerce Chatbots Improve Online Customer Service?

#1 Helps customers find what they need faster 
In a highly competitive industry like the e-commerce industry, time is of the essence. You need to be able to provide the right product details when a customer is looking to make a purchase to ensure that you don’t lose them to your competitor. Sometimes, you might need to provide recommendations even before a customer asks for it. 

Deploying a chatbot in your online e-commerce store is the best way to ensure that you are able to offer timely assistance to your customers. For example, beauty retailer Sephora uses chatbots to assist customers in finding products that meet their styles and preferences. After choosing from a menu of product categories, customers can tell the bot what features or qualities they’re looking for. Then, the bot responds with direct links to relevant product pages.

Sephora-Ecommerce-Chatbot-Example

This way, shoppers don’t need to spend their time sorting and scrolling through pages upon pages of products. Instead, they can navigate directly to the ones that meet their needs. For many shoppers, this level of ease and convenience elevates their standard buying experience into an interactive one.

Apart from improving your customers’ shopping experience, e-commerce chatbots can also answer frequently asked customer questions. Chatbots learn from your knowledge base and FAQs to provide instant, and accurate answers based on customer interactions. This helps ensure that you are able to provide the right answers, at the right time, on the right platform. You can also periodically train your chatbot to improve its performance. Here’s an example of Freshdesk’s chatbot assisting a customer – 

 

Pro tip: Customize the look and feel of your chatbot to make it match your brand. This creates a touch of familiarity and makes your customers feel more at ease. You can also give your chatbot a personality, and engage your customers by responding to small talk instead of scripted robotic answers.

#2 Offers instant resolutions 
Post-purchase customer service has a direct impact on customer loyalty. Issues that deal with payment failures or return and refund are pressing concerns that need to be addressed as early as possible. 

With e-commerce chatbots, you can offer real-time resolutions for commonly reported issues. Using automated workflows, chatbots provide instant solutions for requests related to return, refund, payment, billing, order confirmations, and shipping information. 


You need to ensure that your chatbot platform offers the following: 

no-code chatbot builder that you can use to set up decision trees without any technical assistance

integrations with third party apps, and internal systems to seamlessly obtain the details required to provide resolutions.

You need to keep the above two points in mind while picking a chatbot solution for your business (more on this later).

Pro tip: There might be customer issues too complex for the chatbot to handle. So, it’s best to always provide the option for customers to reach out to support reps. A few AI-powered chatbots understand that humans are better at handling frustrated customers, and know when and how to gracefully hand off such conversations to a customer service representative

#3 Predicts purchase intent and convert service requests into new sales
Some customer service interactions open doors to a sale. For instance, if a customer asks you if a product is available, or when it’s likely to be available next, there’s a high chance that he or she is looking to buy that product. To make sure that you don’t miss out on opportunities like this, you can build dynamic bot workflows that get triggered based on customer intent. This way, once the bot provides an answer to the customer’s question, it can also follow up with the option to make a purchase or add the product to cart. AI powered chatbots have the capability to detect intent and follow up with relevant conversation flows to engage and delight customers.

#4 Improves team efficiency 
Providing fast, helpful service to each of your customers is a top priority for most companies. However, if you’ve ever worked in a customer-facing role, you know how frustrating it can be to spend time addressing repetitive questions (like whether you ship to their country or if a product will be back in stock). 

Chatbot ease agent workload by providing straightforward answers to frequently asked customer issues. In fact, chatbots can deflect upto 60% of incoming questions. This way, your team can focus their time and effort on more complex issues that a bot can’t solve — which is ultimately a much more efficient use of their time. 

How to Choose the Right E-commerce Chatbot Solution for Your Business?

The chatbot market is flooded with different chatbot solutions that differ in terms of capabilities. If you’re looking to incorporate an e-commerce chatbot in your customer service strategy, make sure your chatbot solution offers the following five features: 

#1 Knowledge base should be embeddable – For your chatbot to serve as an effective self-support tool, it needs to fetch the right answers from a reliable source. A well-structured knowledge base is the best content repository that your chatbot can use to suggest the answers to your customers. A good chatbot solution will allow you to integrate or embed your knowledge base with your chatbot.

#2 Allows for third-party integrations – In order to enable your chatbot to automate resolutions for frequently reported issues, it needs to be integrated with third party applications such as your CRM, order management software, etc. So, it’s best that you pick a solution that allows you to seamlessly integrate with multiple third-party applications.

#3 Offers a no-code workflow builder –  Using an intuitive, no-code bot builder is the most convenient way to set up bot workflows. With an easy to use bot builder, you can cover all possible responses by the end-user by setting up multiple multi-level if-then-else conditions, without any tech dependencies.  

#4 Integrates with a customer support software – A powerful customer service software integration helps ensure that both your customers as well as your agents have a seamless experience. Especially during agent-takeovers, a thorough integration will ensure that agents have all the context they need to resolve the customer’s issue without compromising on customer experience.

#5 Provides in-depth reporting – Analytics and reporting are necessary to optimize your chatbot’s performance. A good chatbot solution will offer in-depth reports that you can use to measure and optimize your chatbot’s efficiency. 

Apart from the above features, you need to ensure that the solution pick is cost-effective and secure. 

Summing Up

Regardless of what your customer service goals are – reducing costs, improving metrics like ticket deflection rate, response and resolution times, or optimising agent productivity -, there’s a strong chance that chatbots could help you reach them. If you incorporate this technology soon, there’s still time to be at the forefront of this trend that’s likely to become a core part of customer service.

Using Freddy AI’s no-code bot builder, you can design and deploy a customized e-commerce chatbot that meets your customers’ requirements, and provides satisfactory experiences at all times!

 BUILD YOUR OWN BOT

Source
1- https://www.financedigest.com/ai-will-power-95-of-customer-interactions-by-2025.html
2 – https://www.businessinsider.com/consumers-prefer-businesses-that-use-chat-apps-2016-9?IR=T
3 – https://us.epsilon.com/pressroom/new-epsilon-research-indicates-80-of-consumers-are-more-likely-to-make-a-purchase-when-brands-offer-personalized-experiences
4 – https://www.mckinsey.com/~/media/mckinsey/featured%20insights/Customer%20Experience/CX%20Compendium%202017/Customer-experience-compendium-July-2017.ashx