As investment in artificial intelligence continues to gain momentum, will chatbots become central to retail customer service or a misstep reflective of an over-reliance on technology?
Chatbots are programs that can simulate a human interaction by applying natural language processing to understand voice and text inputs and then address queries through human-like responses.
Advantages include personalised recommendations, reducing labour costs and the provision of 24/7 customer engagement.
With such opportunities available, retailers need to ask themselves – are chatbots key to superior customer service and are consumers comfortable with such interactions?
Retailers are keeping millennials in mind with chatbots, integrating them with services such as Facebook Messenger in the hope of establishing a more personal connection with this digital-first generation.
“These services let shoppers communicate with a retailer from the comfort of their messaging apps”
Shop Direct was among the first UK retailers to launch a chatbot on its Very.co.uk app in 2016. Describing it as a communication tool like WhatsApp, the bot was designed to bolster loyalty among younger, digitally savvy shoppers.
Similarly, H&M launched a chatbot on Canadian messaging application Kik’s Bot Shop marketplace in 2016, which makes product recommendations based on customers’ unique style preferences, age and gender.
This enables H&M to present instant results to shoppers looking for specific items without them having to manually search, creating a more immediate purchasing opportunity and potentially boosting conversion rates.
These services let shoppers communicate with a retailer from the comfort of their messaging apps, without interrupting other conversations or dealing with the inconvenience of a regular customer service enquiry.
Chatbots are being used to bring efficiencies to the supply chain too. For instance, fulfilment group Doddle recently launched a Facebook chatbot to improve the returns process for customers.
It asks customers for one or more pieces of data related to their return and creates a QR code for scanning once the customer visits a Doddle drop-off location. This reduces the time shoppers spend in-store handing over the parcels and lets staff concentrate on higher-value tasks.
The system also supplies the retailer with a live feed of inbound returns and requires no further integration with existing IT systems. Thus, the chatbot improves convenience for consumers and retailers alike.
Collaborative customer service
One retailer that has successfully integrated chatbots with human customer service is Lidl.
Its Margot chatbot launched on the Facebook Messenger app in early 2018 and helps customers select appropriate wines to be paired with food.
“Without wine experts in-store or across their contact centres, the chatbot has filled a gap in Lidl’s service”
Without wine experts in-store or across their contact centres, the chatbot has filled a gap in Lidl’s service, delivering an interactive knowledge bank for customers on one of the grocer’s best-performing product categories.
Lidl staff monitor incoming messages for mentions of any desire to speak to customer service and the user always has the option to involve humans when needed.
Some retailers have opted to implement chatbots on a seasonal basis, which can suit a developing technology in its infancy.
The Entertainer launched its Santa chatbot ahead of Christmas 2017 and said that the bot’s responses would be trained by humans, allowing it to improve over time.
Zalando has also invested in a chatbot designed specifically for gift shopping, partnering with Google in 2017 to launch The Gift Finder. Users asking Google Assistant for help finding gifts are asked a series of questions such as who they are buying for, before being presented with a list of items available on Zalando’s site.
“Even among tech-savvy millennial shoppers there is evidence that most still prefer human customer service”
The adoption of chatbots by Google and Facebook reflects their growing appeal. It fits with consumers’ increasingly hectic lifestyle and demand for vast swarms of immediate information as well as their need for a conversational interaction that can encourage loyalty.
However, retailers are expressing a note of caution. First, they are worried about chatbots’ lack of emotional intelligence. Chatbots will inevitably misunderstand a customer query here and there, so the risk of delivering a poor customer experience is high.
And some argue consumer demand is not there yet. Even among tech-savvy millennial shoppers there is evidence that most still prefer human customer service.
According to customer engagement firm Startek Research, 76% of US millennial consumers prefer customer service interactions with a human versus a machine, perhaps explaining the somewhat limited uptake of the technology thus far.
A human touch, for now at least, is still very much seen as an integral part of the customer service offer.