AI Chatbots for Transformative Retail Customer Service

Man holding phone with chatbot on screen

From managing heightened consumer expectations to striving to make every customer interaction as efficient as possible, customer service teams were put to the test in 2021. 

Delivering a quick, yet exceptional customer experience to shoppers has become standard in the retail industry, with 83% of customers citing good customer service as their most important criterion for deciding what and where to buy. 

With 64% of shoppers now preferring to browse online versus in-store, providing customers with the digital support they need is essential. However, with the majority of digital contact center teams facing agent shortages nationwide, this task has become much more laborious. AI chatbots fill in these gaps by providing instant customer support around the clock, regardless of demand levels. And with e-commerce sales expected to grow by 16.1% in 2022, digital self-service tools like virtual agents will provide the speed and flexibility that businesses need. 

What Is an AI Chatbot? 

Unlike rule-based chatbots that send pre-programmed responses based on a limited set of inputs, AI chatbots analyze customer sentiment and unique responses based on intent. Once the chatbot receives the inquiry from the user, it will analyze the message to understand the general objective, follow up to gather any additional details, and deliver the proper response based on the information it has collected. 

[Related: 3 Keys to Best Buy’s Omnichannel Performance]

AI chatbots also pull from previous interaction data to become more accurate over time by utilizing natural language processing (NLP) to evaluate whether those conversations resulted in positive or negative sentiment. This feedback is vital for retail brands to understand how customers truly feel about their business, and tweak their CX strategy to address areas of friction. 

How AI Chatbots Benefit the Retail Industry 

Chatbots tackle repeatedly asked questions by pulling information from knowledge bases or pre-written responses, taking the burden off customer care agents. With 87% of marketing experts predicting customer needs to be even more common over the next few years, AI-powered chatbots are key in boosting efficiency, all while saving your business time and money. 

Check out the top four benefits of integrating them into your digital customer services strategy:

1. Instant Customer Support Around the Clock

Given that 79% of consumers want to receive a speedy response from brands, it’s vital to provide the instant gratification that customers crave. AI chatbots satisfy high consumer expectations by providing instant, 24/7 support year-round. By delivering real-time responses, even during periods of high demand, your brand can beat out competitors and create customers for life.

2. Heightened Conversion Rates

Within the retail industry, chatbots can assist with far more than just support-related inquiries. Customers can ask questions about inventory levels, product reviews, recommendations, and more, playing a key role in users’ purchasing decisions. By identifying patterns in consumer inputs and decision-making, AI chatbots are able to guide customers toward the most relevant products, offering a personalized experience without the need for a human agent. 

3. Reduced Customer Care Expenses

Brands that invest in their customer experience are bound to see higher revenue and more conversions. But with businesses spending over $1 trillion dollars on customer service calls each year, investing in AI is key to reducing these costs while retaining customer satisfaction. In fact, AI is proven to help lower customer service spend up to 30%

These conversational solutions tackle routine questions that can be resolved without a live agent, like checking order status or updating account information. By offering answers on the spot and reducing handling time, brands will save on the bottom line. You can even use AI-powered chatbots in-house to improve the efficacy of your care team as well. 

4. Increased Agent Efficiency

While AI chatbots can’t replace your human agents, they work hand-in-hand with contact center teams by gathering information across all digital channels and providing a single view of all previous customer interactions. This saves your agents from having to play catch up, allowing them to skip the repetitive questions and solve inquiries faster. 

In fact, by the end of 2023, companies will save an estimated 2.5 billion hours on customer service by using chatbots.Virtual assistants also boost agent attrition by handling 80% of standard questions, saving the more unique, engaging inquiries for your human agents. As a result, employees are less likely to experience workplace burnout and job dissatisfaction. 

Important Considerations for Choosing the Best AI Chatbot for Your Brand

With chatbots being the fastest-growing brand communication channel, you don’t want your business to lag behind. Before jumping in, there are a few considerations to keep in mind when selecting your AI chatbot. First and foremost, chatbots are integral in collecting insightful feedback about your brand. When choosing your chatbot, find out what data it will provide and how it will present this information. 

Through using your chatbot to track insights like engagement, speed of resolution, CSAT, NPS, and more, you can identify customer pain points and amplify your overall digital experience. 

Additionally, you’ll want to make sure the chatbot you choose is relevant to your business’ needs. Decide if your brand is looking for simple agent assistance or a tool that can independently interact with customers. For the majority of retail brands, having a bot that can resolve more complicated queries versus providing base information like hours of operation will be crucial. As previously stated, by being able to handle more complex tasks like offering personalized product recommendations and reviews, brands can significantly bolster their contact center efficiency. 

Lastly, it’s vital that your AI chatbot can seamlessly integrate with other systems and workflows to ensure a smooth transition. For retail businesses, in particular, bots should be able to pull product information from inventory management systems or track previous order information from your CRM. By setting up these systems to easily communicate with one another, you can get customers the information they need without the hassle or the delay. 

Deliver a World-Class Customer Experience With the Help of AI 

If you're looking to reduce contact center costs, boost agent efficiency, and provide instant support around the clock, an AI chatbot is the missing key to your business. With lowering customer tolerance levels and rising agent shortages, chatbots are vital to contact center performance. Digitization is continuing to disrupt industries across the globe, and AI is bound to revolutionize customer experience and personalization.

— For more than 20 years, Philippe Mesritz, the VP of customer success, experience and operations at Khoros, has worked to ensure customers are successful in the way that they want to be served. Throughout his career, he has led support services, customer experience, and customer operations teams as well as technical and customer success organizations. At Khoros, he leads our company's customer experience strategy and success operations teams to ensure that our customers can become customers for life as well as our North American customer success team. Included in this is driving Khoros’ own customer-facing community and bot facing strategies, and he's excited to be facilitating the conversations around how we can best put automation and bots in place to drive customer satisfaction.

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