Chatbots in E-Commerce: Advantages and Functioning
Katharina-Maria Röder2/28/2023
In this article, we reveal to you the advantages of chatbots for you and your customers and how they work.
Table of contents
- What benefits do chatbots have in e-commerce for businesses?
- What benefits do chatbots in e-commerce have for customers?
- How do chatbots work in e-commerce?
- Which providers of chatbots for e-commerce are there?
- Conclusion
Chatbots are a real gamechanger in e-commerce. With their help, you can automate a large part of your customer service and improve the shopping experience for your customers. This increases your sales and also reduces your costs. In this article, you will learn about the benefits of chatbots for you and your customers and how chatbots work.
Chatbots create a personalized shopping experience for your customers, while you simultaneously save costs and make more profit.
What benefits do chatbots have in e-commerce for businesses?
1. Reduce personnel costs
Chatbots, like the one from BOTfriends can take over a large part of customer service in E-Commerce. The customer service staff only have to process a small proportion of customer inquiries themselves. According to a study by MessengerPeople (now Sinch Engage) from 2019, chatbots can meaningfully answer 80 percent of all inquiries in customer service. With a chatbot, you not only reduce personnel costs, the support is usually faster and less prone to errors.
2. Better customer service
If the chatbot takes on frequently asked questions, this relieves your employees. They have more time to take care of customers who have more complex concerns. If you connect the chatbot to your CRM, the chatbot can support existing customers even more individually, as the data from previous visits and inquiries can be saved. Better customer service leads to more satisfied customers, which brings us to the next advantage.
3. Increase sales
Satisfied customers like to buy from you again. The chatbot processes customer inquiries in the shortest possible time. But it can do even more. The chatbot can find the right products for customers, recommend additional products and offer discounts at the right time. If items are added to the shopping cart but the purchase is not completed, the chatbot can remind customers of their products in the shopping cart and ask if they want to proceed to checkout. This accelerates the decision-making and thus the buying process.
Recommended Chatbot Software
You can find more recommended chatbot software on our comparison platform OMR Reviews. There we have listed over 70 chatbots for small and medium-sized companies, start-ups and large corporations that support you as virtual assistants in areas such as customer communication. So take a look and compare the software with the help of authentic and verified user reviews:
4. Personalization
Chatbots collect and store customer data. This enables a very individual support of these. For example, product pages can be adapted to their needs and preferences. The chatbot can inform customers about items that are back in stock and offer alternative products in the meantime. The collected data also help your employees to provide individual service if the chatbot reaches its limits. Personalized shopping experiences not only lead to higher turnover in the short term, but also create a stronger connection between your company and your customers.
5. Improve offering
Chatbots can quickly and easily obtain feedback from your customers at the perfect time. This could be a survey about satisfaction with the chatbot, but also feedback on products. The results of the surveys help you to improve your offer.
6. Fewer returns
The chatbot can contribute to reducing returns in various ways. On the one hand by the personalized accompaniment of the customers during the purchase. This can help them find the product that suits them more easily. On the other hand by looking after not completely satisfied customers. If the product does not quite meet expectations or there is uncertainty, the chatbot can dispel concerns that would have led to a return. Discount codes for the next order or the delivery of a replacement product can also be part of complaint management and prevent returns.
7. Scalability
One of the biggest advantages of chatbots in e-commerce is their scalability. Unlike customer service employees, chatbots, like the one from BOTfriends can handle an almost unlimited number of customer inquiries simultaneously. If the company grows, the chatbot can easily handle the increased volume of inquiries without affecting the quality of service. In addition, companies can easily adapt chatbots to different languages, cultures and customer preferences. This enables them to serve a larger customer base.
What benefits do chatbots in e-commerce have for customers?
1. 24/7 Support
Customers expect e-commerce companies to have a very high availability. Best around the clock. After all, your website is always accessible. With a chatbot, you can offer them this support without having to employ an expensive team of customer service staff 24/7.
2. Personalization
Through personalized service you offer your customers a special shopping experience. The chatbot can help them find exactly what they are looking for. If the product is not available, the chatbot can show alternatives. The chatbot can also answer questions about the product or delivery times. The interaction with the chatbot is interactive and every answer is exactly tailored to the customer's request.
3. Multilingual support
Unlike your employees, a chatbot can theoretically communicate with your customers in any language. Which languages are available for your chatbot depends on the provider. If you have customers from all over the world, the chatbot can communicate with them in their native language. Your customers can thus communicate their concerns more clearly and receive better support from the chatbot.
4. Help where it is needed
If you use multiple channels to be present with your company, you can integrate chatbots everywhere. This way, customers can easily reach you where they need support.
5. Low contact threshold
Not everyone wants to contact an employee directly with a simple question and would rather leave your shop if the matter is not clarified quickly. The threshold for communicating with a chatbot is significantly lower. This way, even more reserved customers get support at all times.
6. Save time
There are customers who like to browse in the shop. Others want to get to the goal quickly. For them, the chatbot is the perfect guide through the shop to find what they are looking for quickly. The order can be accepted directly in the chat or the way to checkout can be shortened. The easier and faster you make the ordering process for your customers, the better the user experience.
7. Easy use
Chatbots are very user-friendly. Unlike other customer service channels, customers do not have to wait or navigate through complicated phone menus with chatbots. Chatbots give immediate answers and guide customers through the entire purchasing process. They use natural language to understand and answer the questions of customers. This makes the interaction resemble a casual conversation.
How do chatbots work in e-commerce?
E-commerce chatbots like the one from BOTfriends are computer programs that use artificial intelligence (AI) and Natural Language Processing (NLP) methods to communicate in real time with customers via messenger platforms. The chatbots simulate human dialogues and thus enable the customers a personal shopping experience.
These 6 steps are completed from the first contact with the chatbot to the purchase:
- A customer starts a conversation with a chatbot by typing a message or sending a question via a messaging platform.
- The chatbot processes the request using NLP. It uses APIs to access the database and retrieve relevant information such as product details, prices and availability.
- The chatbot transmits the search results in a dialogue-oriented format through text, pictures or videos.
- If a customer needs further support or has additional questions, the chatbot can either provide further information or pass the conversation on to a customer service employee.
- The chatbot can also provide personalized recommendations based on past transactions and surfing behavior and offer discounts or promotions to create a purchase incentive.
- After the order is completed, the chatbot can send a confirmation message and inform about the delivery.
- Chatbots can be used to collect feedback from customers about the shopping experience.
A small technical insight
Several technical components are needed to understand customer inquiries, retrieve relevant information and give suitable answers:
Natural Language Processing (NLP)
NLP is a subfield of AI. It deals with the interaction between humans and computers in natural language. NLP algorithms are used to understand the intention and meaning behind customer inquiries. They are also used to gain relevant information from various data sources such as customer reviews, product descriptions and posts on social media.
Machine Learning (ML)
Machine Learning is a process of data analysis that automates the creation of analysis models. E-commerce chatbots use ML algorithms to learn from customer interactions. Their answers are getting better over time. This allows chatbots to give more accurate and personalized recommendations based on the individual preferences of customers.
Application Programming Interface (API)
For chatbots to deliver relevant information to customers, they need to be connected to various data sources. This is where APIs come into play. APIs are used to integrate chatbots into e-commerce databases, product catalogs and other third-party services.
Dialog Management
Dialog Management refers to the process of controlling the course of conversation between the chatbot and the customers. E-commerce chatbots use dialog management systems to control customer interactions and provide suitable answers based on the dialog context.
User Interface
The user interface is the part of the chatbot with which customers interact. E-commerce chatbots can be designed as a text-based message interface or as a graphical user interface (GUI), depending on which platform they are integrated into.
Chatbots in e-commerce are complex systems that require sophisticated technologies to work efficiently. They use a variety of algorithms and software to understand customer inquiries, retrieve relevant information and give personalized recommendations.
Which providers of chatbots for e-commerce are there?
It has never been so easy to create chatbots for e-commerce yourself. There are numerous software solutions that allow people without programming skills to set up chatbots. They offer ready-made templates and drag-and-drop interfaces. With these tools, you can easily design and adapt chatbots to your needs. With these tools, you can quickly implement chatbots and use all the advantages for you and your customers.
On OMR Reviews you can find almost 20 Chatbot softwares compared. Here is a list of some chatbot tools on OMR Reviews:
Superchat
Sinch Engage
Lime Connect (ehemals Userlike)
melibo
moinAI
Tidio
Cognigy.AI
Outgrow
charles
BOTfriendsDo you want to know now how to create a chatbot? No problem, OMR Reviews will help you! Here goes to the article "Creating a chatbot in 8 steps".
Conclusion
Chatbots have fundamentally changed the customer service of e-commerce companies. By using AI and NLP technologies, chatbots can understand customer inquiries, retrieve relevant information and provide personalized answers. As the technology continues to be developed, it is expected that chatbots will play an even bigger role in e-commerce. Chatbots already have many benefits - for your business and for your customers.
In short: Customer satisfaction increases and so do your sales. A win-win situation! It is important that you select the right chatbot provider. Make sure it offers all the functions your business needs. Would you like to learn more about chatbots? Then have a look here: "The chatbot: Your digital friend and helper".
Author
Katharina-Maria Röder
Diese Autorin ist seit 2019 freiberufliche Texterin und Text-Trainerin und unterstützt Unternehmen dabei, ihren Blog-Content zu optimieren und mehr Reichweite zu generieren. Zuvor war sie als Produktmanagerin im E-Commerce bei Bechtle Logistik & Service GmbH tätig und koordinierte Marketingaktivitäten sowie Produktsupport. Außerdem sammelte sie Erfahrung als Project & Support Coordinator im Bereich Digital Learning bei der Haufe Akademie, wo sie Kundenprojekte im E-Learning betreute.
