Chatbots will save retailers, banks and healthcare organizations $11 billion annually within five years, with retailers enjoying the lion’s share of the savings, according to a new report from Juniper Research. The findings underscore the increasingly vital role that artificial-intelligence-based voice- or text-activated assistants are playing in the industry’s future — and present.
The savings come from the reduced time that businesses will spend on customer service activities — about 2.5 billion hours yearly among the three industries by 2023. AI allows retailers to spend less on humans working in call centers, for example.
The new research report, “Chatbots: Banking, eCommerce, Retail & Healthcare 2018-2023,” predicts that, by 2023, over 70 percent of chatbots will be retail-based, as merchants continue to view the technology as a way to both save money and drive revenue. For retailers, one factor in the growth of chatbots, also known as virtual customer assistants, will be the increased integration of the technology into stores’ mobile apps, the study found.
Chatbots Serve Many Purposes for Retailers
In addition to answering questions and helping customers find the products they want, retailers use chatbots to persuade shoppers to spend more, detect when customers might abandon their carts and save the sale, convince them to sign up for loyalty programs and more. For retailers, the study found, it will all add up to some $112 billion in annual transactions via chatbots by 2023.
Some clever uses of chatbot technology, cited in the study and elsewhere:
- Taco Bell’s TacoBot allows Slack users to order chalupas and nachos directly from the messaging platform.
- HelloAva helps people discover the right skin-care products by asking them a few questions via Facebook Messenger.
- Rocky, a creation of online jeweler Rare Carat, helps educate shoppers on how to buy diamonds and other jewels.
- Starbucks lets consumers order their drinks via its app-embedded chatbot using either text or voice commands, and even lets the purchaser know when their order will be ready.
- Staples' chatbot, which is part of a partnership with IBM’s Watson, can help customers place an order or answer questions about orders already placed.
Big Future Expected for Chatbots in Retail
“As more customers engage on digital channels, VCAs are being implemented for handling customer requests on websites, mobile apps, consumer messaging apps and social networks,” Gene Alvarez, managing vice president of the research firm Gartner, told Information Age. “This is underpinned by improvements in natural-language processing, machine learning and intent-matching capabilities.”
Gartner is one of several technology research firms, in addition to Jupiter, predicting a big future for chatbots, especially in retail. Gartner expects that about 25 percent of customer service operations will integrate chatbot technology within just two years. One reason: Humans are rapidly embracing the technology. About one in five U.S. consumers has already made purchases using VCA technology, and two-thirds have used chatbots for some purpose, according to a survey by Mastercard and Mercator.
One chatbot enthusiast is Chris McCann, CEO of 1-800-Flowers.com. The company invested in the technology early, launching an Amazon Alexa skill three years ago. “It’s the true new user interface, and we’re seeing that start to become more prevalent, certainly as the home gets smarter,” said McCann, speaking at the Retail Innovation Conference in May. “As we’re starting to see voice become more prevalent in automobiles, I think that will start to tip the scale.”