With the holidays quickly approaching, retailers are bracing for the usual high volume of online orders, deliveries, and customer service questions and issues. In 2016, U.S. e-commerce sales jumped 17.8 percent, and analysts predict sales will be even higher this year, so it’s more important than ever to create positive shopping experiences that drive sales and turn holiday buyers into loyal customers.
This imperative is complicated by the fact that consumers’ attention spans are shrinking while their expectations are rising. They’re also using more channels than ever before to communicate. My company, Narvar, recently surveyed 1,290 consumers to get their take. We found that 79 percent of shoppers have used text messages, messenger apps or voice devices to connect with retailers.
Retailers are responding to these shifting preferences by embracing new technologies such as AI-powered chatbots. According to Oracle, 80 percent of brands expect to serve customers via bots by 2020. They’re quickly gaining traction among consumers, too: 67 percent of consumers have used a chatbot for customer support in the past year.
While chatbots, software that can interact with a consumer, are still relatively new to the market, they’re already helping retailers deliver personalized shopping experiences at scale. As you look ahead to the holiday season, here are three ways brands are using bots to improve the customer experience:
Personalize product recommendations
Retailers have traditionally turned to in-store displays, email newsletters, and store associates to promote their latest collection or new product. But as more brick-and-mortar stores close, the personal connection between customers and brands is in danger of dwindling.
Chatbots are one way to build this connection online, helping customers find the products they love. Levi’s, for example, just launched a tool called Virtual Stylist that helps shoppers find great-fitting jeans. It asks questions about fit preference (for example, “how would you like your jeans to fit through your hips and thighs?”). Then, it delivers tailored recommendations for particular cuts and styles.
Hair-coloring startup Madison Reed unveiled a chatbot named Madi that helps shoppers find the most flattering shade. A user can upload a selfie, answer questions about their hair, then review the bot’s suggestions for the perfect color. By talking to consumers via SMS or Facebook Messenger, Madison Reed can create a personal connection while helping customers feel comfortable buying something they would traditionally purchase in store.
Drive store traffic
It’s no secret that shopping malls are struggling. A quarter of U.S. malls will close by 2022, according to estimates by Credit Suisse. Some retailers are embracing experiential retail to fend off this trend. They’re creating sensory product experiences and making shopping more entertaining. Restoration Hardware, for example, launched a showroom 10 times the size of a normal store, luring potential customers with a wine-tasting room and a music venue.
Retailers can use chatbots to draw traffic to physical locations for these experiences. Sephora’s Facebook Messenger Assistant, for example, makes it easy to book makeovers. The conversational interface prompts a customer to select a store and pick a date and time. Since launching the bot, Sephora has increased its booking rate by 11 percent.
Build loyalty post-purchase
While chatbots can help customers select and buy products, they can also help retailers create a great post-purchase experience by communicating instantaneous updates after customers hit “buy”. After all, shoppers rated “order tracking” as the most important type of message they receive from brands.
The discount shoe company DSW, for example, launched a Narvar-driven chatbot for Facebook Messenger that customers can opt into after placing an order. Customers can chat with the bot to track a package or ask related questions. By giving customers an easy, fast way to get the information they want, DSW fosters trust and drives traffic back to its site, fueling more sales. It also frees up customer service representatives’ time so they can address more complex customer issues.
Today, brands are using chatbots to sell products, drive store traffic, and create better post-purchase experiences. In the next year, I predict retailers will build bots that improve other parts of the online shopping experience. For example, as more shoppers prefer to solve customer service issues online rather than picking up the phone, we’ll start to see more bots designed to address customer service issues such as lost packages or erroneous credit card charges.
The holiday season will be a test of retailers’ ability to deliver results in an increasingly competitive landscape while adapting to constantly changing consumer behaviors and expectations. Leading companies are using chatbots in promising ways—and we’ve only seen the beginning.
Narvar specializes in providing post-purchase services to online shoppers.